Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Apr. 30, 2016 | Jun. 03, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | UNITED NATURAL FOODS INC | |
Entity Central Index Key | 1,020,859 | |
Current Fiscal Year End Date | --07-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 50,380,711 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Apr. 30, 2016 | Aug. 01, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 19,327 | $ 17,380 |
Accounts receivable, net of allowance of $11,416 and $7,489, respectively | 478,577 | 474,494 |
Inventories | 984,914 | 982,559 |
Prepaid expenses and other current assets | 48,441 | 46,976 |
Deferred income taxes | 32,333 | 32,333 |
Total current assets | 1,563,592 | 1,553,742 |
Property & equipment, net | 567,252 | 572,452 |
Other assets: | ||
Goodwill | 319,332 | 266,640 |
Intangible assets, net of accumulated amortization of $31,337 and $25,717, respectively | 160,711 | 125,830 |
Other assets | 35,045 | 31,526 |
Total assets | 2,645,932 | 2,550,190 |
Current liabilities: | ||
Accounts payable | 451,153 | 390,134 |
Accrued expenses and other current liabilities | 140,261 | 129,113 |
Current portion of long-term debt | 11,791 | 11,613 |
Total current liabilities | 603,205 | 530,860 |
Notes Payable | 266,899 | 362,993 |
Long-term debt, excluding current portion | 166,282 | 174,780 |
Deferred income taxes | 89,817 | 65,644 |
Other long-term liabilities | 29,310 | 30,380 |
Total liabilities | 1,155,513 | 1,164,657 |
Commitments and contingencies | 0 | 0 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, authorized 5,000 shares; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value, authorized 100,000 shares; 50,380 issued and outstanding shares at April 30, 2016; 50,096 issued and outstanding shares at August 1, 2015 | 504 | 501 |
Additional paid-in capital | 433,573 | 420,584 |
Accumulated other comprehensive loss | (18,634) | (19,443) |
Retained earnings | 1,074,976 | 983,891 |
Total stockholders’ equity | 1,490,419 | 1,385,533 |
Total liabilities and stockholders’ equity | $ 2,645,932 | $ 2,550,190 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Apr. 30, 2016 | Aug. 01, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance (in dollars) | $ 11,416 | $ 7,489 |
Intangible assets, accumulated amortization (in dollars) | $ 313,377 | $ 25,717 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 5,000 | 5,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 100,000 | 100,000 |
Common stock, issued shares | 50,380 | 50,096 |
Common stock, outstanding shares | 50,380 | 50,096 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2016 | May. 02, 2015 | Apr. 30, 2016 | May. 02, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 2,132,104 | $ 2,114,643 | $ 6,256,465 | $ 6,123,665 |
Cost of sales | 1,809,671 | 1,788,729 | 5,322,577 | 5,179,556 |
Gross profit | 322,433 | 325,914 | 933,888 | 944,109 |
Operating expenses | 256,417 | 256,942 | 767,471 | 766,438 |
Restructuring and asset impairment expenses | 0 | 0 | 4,794 | 803 |
Total operating expenses | 256,417 | 256,942 | 772,265 | 767,241 |
Operating income | 66,016 | 68,972 | 161,623 | 176,868 |
Other expense (income): | ||||
Interest expense | 4,384 | 3,920 | 11,734 | 10,729 |
Interest income | (487) | (123) | (1,037) | (285) |
Other, net | (557) | (4,396) | 373 | (3,785) |
Total other expense (income), net | 3,340 | (599) | 11,070 | 6,659 |
Income before income taxes | 62,676 | 69,571 | 150,553 | 170,209 |
Provision for income taxes | 24,405 | 27,821 | 59,468 | 67,573 |
Net income | $ 38,271 | $ 41,750 | $ 91,085 | $ 102,636 |
Basic per share data: | ||||
Net income (usd per share) | $ 0.76 | $ 0.83 | $ 1.81 | $ 2.05 |
Weighted average basic shares of common stock outstanding | 50,350 | 50,079 | 50,290 | 49,998 |
Diluted per share data: | ||||
Net income (usd per share) | $ 0.76 | $ 0.83 | $ 1.81 | $ 2.04 |
Weighted average diluted shares of common stock outstanding | 50,379 | 50,348 | 50,360 | 50,246 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2016 | May. 02, 2015 | Apr. 30, 2016 | May. 02, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 38,271 | $ 41,750 | $ 91,085 | $ 102,636 |
Other comprehensive income (loss), net of tax: | ||||
Fair value of swap agreements, net of tax | (150) | (254) | (2,089) | (254) |
Foreign currency translation adjustments | 7,342 | 3,409 | 2,898 | (8,483) |
Total other comprehensive income (loss), net of tax | 7,192 | 3,155 | 809 | (8,737) |
Total comprehensive income | $ 45,463 | $ 44,905 | $ 91,894 | $ 93,899 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 9 months ended Apr. 30, 2016 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Loss | Retained Earnings |
Beginning Balance (shares) at Aug. 01, 2015 | 50,096 | 50,096 | |||
Beginning Balance at Aug. 01, 2015 | $ 1,385,533 | $ 501 | $ 420,584 | $ (19,443) | $ 983,891 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock option exercises and restricted stock vestings, net of tax | 284 | ||||
Stock option exercises and restricted stock vestings, net of tax | 308 | $ 3 | 305 | ||
Share-based compensation | 12,665 | 12,665 | |||
Other | 67 | 67 | |||
Tax deficit associated with stock plans | (48) | (48) | |||
Fair value of swap agreements, net of tax | (2,089) | (2,089) | |||
Foreign currency translation adjustments | 2,898 | 2,898 | |||
Net income | $ 91,085 | 91,085 | |||
Ending Balance (shares) at Apr. 30, 2016 | 50,380 | 50,380 | |||
Ending Balance at Apr. 30, 2016 | $ 1,490,419 | $ 504 | $ 433,573 | $ (18,634) | $ 1,074,976 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Apr. 30, 2016 | May. 02, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 91,085 | $ 102,636 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 50,967 | 47,206 |
Share-based compensation | 12,665 | 11,972 |
Loss (gain) on disposals of property and equipment | 399 | (784) |
Gain on acquisition of land | 0 | (2,824) |
Excess tax deficit (benefit) from share-based payment arrangements | 48 | (2,865) |
Restructuring and asset impairment | 480 | 803 |
Deferred income taxes | 8,657 | 3,292 |
Provision for doubtful accounts | 5,875 | 3,508 |
Non-cash interest expense | 119 | 368 |
Changes in assets and liabilities, net of acquired businesses: | ||
Accounts receivable | 1,569 | (67,166) |
Inventories | 1,218 | (116,693) |
Prepaid expenses and other assets | (2,041) | (3,863) |
Accounts payable | 31,912 | 30,053 |
Accrued expenses and other liabilities | 2,665 | (11,836) |
Net cash provided by (used in) operating activities | 205,618 | (6,193) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (29,073) | (98,544) |
Purchases of acquired businesses, net of cash acquired | (89,190) | (8,017) |
Proceeds from disposals of property and equipment | 96 | 936 |
Long-term investment | 0 | (3,000) |
Net cash used in investing activities | (118,167) | (108,625) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from borrowings of long-term debt | 0 | 150,000 |
Repayments of long-term debt | (8,320) | (8,252) |
Proceeds from borrowings under revolving credit line | 375,213 | 567,807 |
Repayments of borrowings under revolving credit line | (471,667) | (621,933) |
Increase in bank overdraft | 21,815 | 33,122 |
Proceeds from exercise of stock options | 2,011 | 3,297 |
Payment of employee restricted stock tax withholdings | (1,703) | (2,383) |
Excess tax (deficit) benefit from share-based payment arrangements | (48) | 2,865 |
Capitalized debt issuance costs | (2,051) | (1,963) |
Net cash (used in) provided by financing activities | (84,750) | 122,560 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (754) | 82 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 1,947 | 7,824 |
Cash and cash equivalents at beginning of period | 17,380 | 16,116 |
Cash and cash equivalents at end of period | 19,327 | 23,940 |
Supplemental disclosures of cash flow information: | ||
Non-cash financing activity | 0 | 13,564 |
Non-cash investing activity | 0 | 13,564 |
Cash paid for interest | 12,115 | 10,688 |
Cash paid for federal and state income taxes, net of refunds | $ 50,461 | $ 58,989 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Apr. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES (a) Nature of Business United Natural Foods, Inc. and its subsidiaries (the “Company”) is a leading distributor and retailer of natural, organic and specialty products. The Company sells its products primarily throughout the United States and Canada. (b) Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States have been condensed or omitted. In the Company’s opinion, these condensed consolidated financial statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for interim periods, however, may not be indicative of the results that may be expected for a full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 1, 2015 . Net sales consist primarily of sales of natural, organic and specialty products to retailers, adjusted for customer volume discounts, returns and allowances. Net sales also include amounts charged by the Company to customers for shipping and handling and fuel surcharges. The principal components of cost of sales include the amounts paid to manufacturers and growers for product sold, plus the cost of transportation necessary to bring the product to the Company’s distribution facilities. Cost of sales also includes amounts incurred by the Company’s manufacturing subsidiary, United Natural Trading LLC, which does business as Woodstock Farms Manufacturing, for inbound transportation costs and depreciation of manufacturing equipment offset by consideration received from suppliers in connection with the purchase or promotion of the suppliers’ products. Operating expenses include salaries and wages, employee benefits (including payments under the Company’s Employee Stock Ownership Plan prior to the termination of the plan in the quarter ended January 31, 2016), warehousing and delivery, selling, occupancy, insurance, administrative, share-based compensation and amortization expense. Operating expenses also include depreciation expense related to the wholesale and retail divisions. Other expense (income) includes interest on outstanding indebtedness, interest income and miscellaneous income and expenses. As noted above, the Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with inbound freight are generally recorded in cost of sales, whereas shipping and handling costs for selecting, quality assurance, and outbound transportation are recorded in operating expenses. Outbound shipping and handling costs, including allocated employee benefit expenses, totaled $111.9 million and $113.0 million for the three months ended April 30, 2016 and May 2, 2015 , respectively. Outbound shipping and handling costs, including allocated employee benefit expenses, totaled $339.3 million and $337.7 million for the nine months ended April 30, 2016 and May 2, 2015 , respectively. |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Apr. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which is intended to improve the accounting for share-based payment transactions as part of the FASB's simplification initiative. This ASU will change aspects of accounting for share-based payment award transactions including accounting for income taxes, the classification of excess tax benefits and the classification of employee taxes paid when shares are withheld for tax-withholding purposes on the statement of cash flows, forfeitures, and minimum statutory tax withholding requirements. The ASU is effective for public companies with interim and fiscal years beginning after December 15, 2017, which for the Company will be the first quarter of the fiscal year ending August 3, 2019. Early adoption is permitted provided that the entire ASU is adopted. We are in the process of evaluating the impact that this new guidance will have on the Company's consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) , which will require companies as the lessee to recognize lease assets and liabilities for leases formerly classified as operating leases. The ASU is effective for public companies with interim and annual periods in fiscal years beginning after December 15, 2018, which for the Company will be the first quarter of the fiscal year ending August 1, 2020. We are in the process of evaluating the impact that this new guidance will have on the Company's consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-1, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities , which will change the income statement impact of equity investments, and the recognition of changes in fair value of financial liabilities with the fair value option is elected. The ASU is effective for public companies with interim and annual periods in fiscal years beginning after December 15, 2017, which for the Company will be the first quarter of the fiscal year ending August 3, 2019. We do not expect the adoption of this guidance to have a significant impact on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , which requires entities with a classified balance sheet to present all deferred tax assets and liabilities as noncurrent. The new pronouncement is effective for public companies with annual periods, and interim periods within those periods, beginning after December 15, 2016, which for the Company will be the first quarter of the fiscal year ending July 28, 2018. Early adoption at the beginning of an interim or annual period is permitted. The adoption of this standard is not expected to impact the Company's consolidated financial statements other than the change in presentation of deferred tax assets and liabilities within its consolidated balance sheets. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers, (Topic 606): Deferral of the Effective Date deferring the adoption of previously issued guidance published in May 2014, ASU No. 2014-09, Revenue from Contracts with Customers, (Topic 606) . The core principle of the new guidance is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new pronouncement is effective for public companies with annual periods, and interim periods within those periods, beginning after December 15, 2017, which for the Company will be the first quarter of the fiscal year ending August 3, 2019. We are in the process of evaluating the impact that this new guidance will have on the Company's consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) ("ASU 2015-03"), which simplifies the presentation of debt issuance costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with the presentation of debt discounts. ASU 2015-03 is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, which for the Company will be the first quarter of the fiscal year ending July 29, 2017, with early adoption permitted and retrospective application required. If the Company had adopted this standard in the third quarter of fiscal 2016 , the result would have been the reclassification of $5.5 million and $4.2 million as of April 30, 2016 and August 1, 2015, respectively, from deferred financing costs to long-term debt in our condensed consolidated balance sheets. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The new guidance requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures as appropriate. The new pronouncement is effective for public companies with annual periods ending after December 15, 2016, and interim periods thereafter. We do not expect the adoption of this guidance to have a significant impact on the Company’s consolidated financial statements. |
ACQUISITIONS (Notes)
ACQUISITIONS (Notes) | 9 Months Ended |
Apr. 30, 2016 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | ACQUISITIONS Wholesale Segment - Wholesale Distribution Acquisitions Nor-Cal Produce, Inc. On March 31, 2016 the Company acquired all of the outstanding stock of Nor-Cal Produce, Inc. ("Nor-Cal") and an affiliated entity as well as certain real estate. Founded in 1972, Nor-Cal is a family owned and operated distributor of conventional and organic produce and other fresh products in Northern California, with primary operations located in West Sacramento, California. Total cash consideration related to this acquisition was approximately $68.6 million , subject to certain customary post-closing adjustments. The identifiable intangible assets recorded based on provisional valuations include customer lists of $30.0 million and a tradename and other intangible assets of $ 1.5 million , which are being amortized on a straight-line basis over estimated useful lives of approximately thirteen years and five years , respectively. The preliminary fair value of the identifiable intangible assets acquired was determined by using an income approach. Significant assumptions utilized in the income approach were based on company-specific information and projections, which are not observable in the market and are considered Level 3 measurements as defined by authoritative guidance. Net sales from the date of acquisition through the three months ended April 30, 2016 were $13.0 million . The following table summarizes the consideration paid for the acquisition and the amounts of assets acquired and liabilities assumed as of the acquisition date: (in thousands) Preliminary Purchase Price Allocation Accounts receivable $ 8,483 Inventories 1,902 Property and equipment 10,743 Other assets 1,097 Customer relationships 30,000 Tradename and other intangible assets 1,500 Goodwill 39,458 Total assets $ 93,183 Liabilities 24,603 Total purchase price $ 68,580 Global Organic/Specialty Source, Inc. On March 7, 2016, the Company acquired certain assets of Global Organic/Specialty Source Inc. and related affiliates (collectively "Global Organic") through its wholly owned subsidiary Albert's Organics, Inc. ("Albert's"). Global Organic is a premier distributor of organic fruits, vegetables, juices, milk, eggs, nuts, and coffee located in Sarasota, Florida serving customer locations across the Southeastern United States. Total cash consideration related to this acquisition was approximately $20.6 million , subject to certain customary post-closing adjustments. The fair value of identifiable intangible assets acquired was determined by using an income approach. The identifiable intangible asset recorded based on a provisional valuation consisted of customer lists of $8.4 million , which are being amortized on a straight-line basis over an estimated useful life of approximately ten years . Global Organic's operations will be combined with the existing Albert's business in the Southeast. Cash paid for Nor-Cal and Global Organic was financed through borrowings under the Company’s amended and restated revolving credit facility. Acquisition costs related to the purchase have been expensed as incurred and are included within "Operating Expenses" in the Condensed Consolidated Statements of Income. The businesses were absorbed by the operations of the Company’s wholesale distribution business; therefore, the Company does not record the expenses separately from the rest of the wholesale distribution business. |
RESTRUCTURING ACTIVITIES AND AS
RESTRUCTURING ACTIVITIES AND ASSET IMPAIRMENTS | 9 Months Ended |
Apr. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure | RESTRUCTURING ACTIVITIES AND ASSET IMPAIRMENTS 2016 Cost-Saving Measures During the fourth quarter of fiscal 2015, the Company announced that its contract as a distributor to Albertsons Companies, Inc., which includes the Albertsons, Safeway and Eastern Supermarket chains, would terminate on September 20, 2015 rather than upon the original contract end date of July 31, 2016. During fiscal 2016, the Company implemented Company-wide cost-saving measures in response to this lost business. The various cost-saving measures implemented in fiscal 2016 resulted in total restructuring costs of $4.4 million during the nine months ended April 30, 2016 , all of which was recorded during the first six months of fiscal 2016. There were no additional costs recorded during the three months ended April 30, 2016 . These initiatives resulted in a reduction of employees, the majority of which were terminated during the first quarter of fiscal 2016, across the Company. The total work-force reduction charge of $3.4 million recorded during the nine months ended April 30, 2016 , was primarily related to severance and fringe benefits. In addition to workforce reduction charges, the Company recorded $0.9 million during the nine months ended April 30, 2016 for costs due to an early lease termination and facility closure and operational transfer costs associated with these initiatives. The following is a summary of the restructuring costs the Company recorded in the first nine months of fiscal 2016, as well as the remaining liability as of April 30, 2016 (in thousands): Restructuring Costs Cash Payments Restructuring Cost Liability as of April 30, 2016 Severance $ 3,443 $ (2,241 ) $ 1,202 Early lease termination and facility closing costs 368 (368 ) — Operational transfer costs 570 (570 ) — Total $ 4,381 $ (3,179 ) $ 1,202 The Company anticipates that the remaining liability related to the workforce reduction will be substantially paid by the end of fiscal 2016. Canadian Facility Closure During fiscal 2015, the Company ceased operations at its Canadian facility located in Scotstown, Quebec which was acquired in 2010. In connection with this closure, the Company recognized restructuring and impairment charges of $0.8 million during the nine months ended May 2, 2015. Additionally, during the second quarter of fiscal 2016, the Company recognized an additional impairment charge of $0.4 million related to the long lived assets at the facility. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Apr. 30, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following is a reconciliation of the basic and diluted number of shares used in computing earnings per share (in thousands): Three months ended Nine months ended April 30, May 2, April 30, May 2, Basic weighted average shares outstanding 50,350 50,079 50,290 49,998 Net effect of dilutive stock awards based upon the treasury stock method 29 269 70 248 Diluted weighted average shares outstanding 50,379 50,348 50,360 50,246 There were 146,844 and 241 anti-dilutive share-based awards outstanding for the three months ended April 30, 2016 and May 2, 2015 , respectively. For the nine months ended April 30, 2016 and May 2, 2015 , there were 100,048 and 5,250 anti-dilutive share-based awards outstanding, respectively. These anti-dilutive share-based awards were excluded from the calculation of diluted earnings per share. |
FAIR VALUE MEASUREMENTS OF FINA
FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Apr. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS | FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS Interest Rate Swap Agreement On January 23, 2015 , the Company entered into a forward starting interest rate swap agreement with an effective date of August 3, 2015. The agreement provides for the Company to pay interest for a seven-year period at a fixed rate of 1.795% on an initial amortizing principal amount of $140.0 million while receiving interest for the same period at the one-month London Interbank Offered Rate ("LIBOR") on the same notional amount. The interest rate swap has been entered into as a hedge against LIBOR movements on the current variable rate related to the Company’s real-estate backed Term Loan Agreement entered into on August 14, 2014, explained in more detail in Note 9 "Long-Term Debt," to protect against rising interest rates. We expect that the interest rate swap will effectively fix the Company’s interest rate payments on the $140.0 million of debt for the term of the swap. The swap agreement qualifies as an “effective” hedge under FASB Accounting Standards Codification ("ASC") 815, Derivatives and Hedging (“ASC 815”). Interest rate swap agreements are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The Company’s interest rate swap agreement is designated as a cash flow hedge at April 30, 2016 and is reflected at fair value in the Condensed Consolidated Balance Sheet. The Company uses the “Hypothetical Derivative Method” described in ASC 815 for quarterly prospective and retrospective assessments of hedge effectiveness, as well as for measurements of hedge ineffectiveness. Under this method, the Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. The effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings) and subsequently reclassified to earnings in interest income when the hedged transactions affect earnings. Ineffectiveness resulting from the hedge is recorded as a gain or loss in the condensed consolidated statement of income as part of other income. The Company did not have any hedge ineffectiveness recognized in earnings during the three and nine months ended April 30, 2016 . The Company also monitors the risk of counterparty default with respect to its interest rate swap agreement on an ongoing basis. Fuel Supply Agreements The Company is party to several fixed price fuel supply agreements. As of the second quarter of fiscal 2016, the Company had entered into an agreement which requires it to purchase a portion of its diesel fuel each month at fixed prices through December 2016 . These fixed price fuel agreements qualify for, and the Company has elected to utilize, the “normal purchase” exception under ASC 815 as physical deliveries will occur rather than net settlements, and therefore the fuel purchases under these contracts are expensed as incurred and included within operating expenses. During the nine months ended May 2, 2015 , the Company was a party to several similar agreements which required it to purchase a portion of its diesel fuel each month at fixed prices through December 2015 and which also qualified and were accounted for using the “normal purchase” exception under ASC 815, and therefore the fuel purchases under those contracts were also expensed as incurred and included within operating expenses. Financial Instruments The following table provides the fair value hierarchy for financial assets and liabilities measured on a recurring basis as of April 30, 2016 and August 1, 2015: Fair Value at April 30, 2016 Fair Value at August 1, 2015 (In thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Liabilities: Interest Rate Swap — $ (4,206 ) — — $ (726 ) — The fair value of the Company’s other financial instruments including cash, cash equivalents, accounts receivable, notes receivable, accounts payable and certain accrued expenses approximate carrying amounts due to the short-term nature of these instruments. The Company believes its credit risk is similar to the overall market and variable rates have not moved significantly since it initiated the underlying borrowings therefore the fair value of notes payable approximate carrying amounts. The following estimated fair value amounts for long-term debt have been determined by the Company using available market information and appropriate valuation methodologies including the discounted cash flow method, taking into account the instruments’ interest rate, terms, maturity date and collateral, if any, in comparison to market rates for similar financial instruments and are, therefore, deemed Level 2 inputs. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. April 30, 2016 August 1, 2015 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Liabilities: Long-term debt, including current portion $ 178,073 $ 184,565 $ 186,393 $ 192,679 |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 9 Months Ended |
Apr. 30, 2016 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS The Company has several operating divisions aggregated under the wholesale segment, which is the Company’s only reportable segment. These operating divisions have similar products and services, customer channels, distribution methods and historical margins. The wholesale segment is engaged in the national distribution of natural, organic and specialty foods, produce and related products in the United States and Canada. The Company has additional operating divisions that do not meet the quantitative thresholds for reportable segments and are therefore aggregated under the caption of “Other.” “Other” includes a retail division, which engages in the sale of natural foods and related products to the general public through retail storefronts on the east coast of the United States, a manufacturing division, which engages in importing, roasting, packaging, and distributing of nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items and confections, and the Company’s branded product lines. “Other” also includes certain corporate operating expenses that are not allocated to operating divisions and are necessary to operate the Company’s headquarters located in Providence, Rhode Island, which include depreciation, salaries, retainers, and other related expenses of officers, directors, corporate finance (including professional services), information technology, governance, legal, human resources and internal audit. As the Company continues to expand its business and serve its customers through a new national platform, these corporate expense amounts have increased, which is the primary driver behind the increasing operating losses within the “Other” category below. Non-operating expenses that are not allocated to the operating divisions are under the caption of “Unallocated Expenses.” The Company does not record its revenues for financial reporting purposes by product group, and it is therefore impracticable for the Company to report them accordingly. The following table reflects business segment information for the periods indicated (in thousands): Wholesale Other Eliminations Unallocated Consolidated Three months ended April 30, 2016: Net sales $ 2,111,695 $ 70,217 $ (49,808 ) $ — $ 2,132,104 Operating income (loss) 62,682 3,811 (477 ) — 66,016 Interest expense — — — 4,384 4,384 Interest income — — — (487 ) (487 ) Other, net — — — (557 ) (557 ) Income before income taxes 62,676 Depreciation and amortization 20,976 (2,856 ) — — 18,120 Capital expenditures 8,340 261 — — 8,601 Goodwill 301,600 17,732 — — 319,332 Total assets 2,475,054 192,282 (21,404 ) — 2,645,932 Three months ended May 2, 2015: Net sales $ 2,093,384 $ 57,415 $ (36,156 ) $ — $ 2,114,643 Operating income (loss) 75,181 (6,096 ) (113 ) — 68,972 Interest expense — — — 3,920 3,920 Interest income — — — (123 ) (123 ) Other, net — — — (4,396 ) (4,396 ) Income before income taxes 69,571 Depreciation and amortization 15,751 1,798 — — 17,549 Capital expenditures 41,569 812 — — 42,381 Goodwill 250,798 17,731 — — 268,529 Total assets 2,387,329 185,855 (14,863 ) — 2,558,321 Wholesale Other Eliminations Unallocated Consolidated Nine months ended April 30, 2016: Net sales $ 6,200,668 $ 181,709 $ (125,912 ) $ — $ 6,256,465 Restructuring and asset impairment expenses 2,811 1,983 — — 4,794 Operating income (loss) 172,549 (9,563 ) (1,363 ) — 161,623 Interest expense — — — 11,734 11,734 Interest income — — — (1,037 ) (1,037 ) Other, net — — — 373 373 Income before income taxes 150,553 Depreciation and amortization 52,531 (1,564 ) — — 50,967 Capital expenditures 27,637 1,436 — — 29,073 Goodwill 301,600 17,732 — — 319,332 Total assets 2,475,054 192,282 (21,404 ) — 2,645,932 Nine months ended May 2, 2015: Net sales $ 6,061,161 $ 165,142 $ (102,638 ) $ — $ 6,123,665 Restructuring and asset impairment expenses 803 — — — 803 Operating income (loss) 199,241 (22,893 ) 520 — 176,868 Interest expense — — — 10,729 10,729 Interest income — — — (285 ) (285 ) Other, net — — — (3,785 ) (3,785 ) Income before income taxes 170,209 Depreciation and amortization 43,149 4,057 — — 47,206 Capital expenditures 96,239 2,305 — — 98,544 Goodwill 250,798 17,731 — — 268,529 Total assets 2,387,329 185,855 (14,863 ) — 2,558,321 |
NOTES PAYABLE (Notes)
NOTES PAYABLE (Notes) | 9 Months Ended |
Apr. 30, 2016 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE On April, 29, 2016, the Company entered into an amendment to its amended and restated revolving credit facility (the "Amendment") which increased the maximum borrowings under the amended and restated revolving credit facility and extended the maturity date to April 29, 2021. Up to $850.0 million is available to the Company's U.S. subsidiaries and up to $50.0 million is available to the Company's Canadian subsidiary. After giving effect to the Amendment, the amended and restated revolving credit facility provides an option to increase the borrowing base by up to an additional $600.0 million (but in not less than $10.0 million increments) subject to certain customary conditions and the lenders committing to provide the increase in funding. The borrowings of the U.S. portion of the amended and restated credit facility, after giving effect to the Amendment, accrue interest, at the LIBOR rate plus an applicable margin of 1.25% for the first twelve months. After this period, the interest is accrued at the Company's option, at either (i) a base rate (generally defined as the highest of (x) the Bank of America Business Capital prime rate, (y) the average overnight federal funds effective rate plus one-half percent ( 0.50% ) per annum and (z) one-month LIBOR plus one percent (1%) per annum) plus an initial margin of 0.25% , or (ii) the LIBOR rate plus an applicable margin of 1.25% . The borrowings on the Canadian portion of the credit facility for Canadian swing-line loans, Canadian overadvance loans or Canadian protective advances accrue interest, at the Company's option, at either (i) a prime rate (generally defined as the highest of (x) 0.50% over 30-day Reuters Canadian Deposit Offering Rate ("CDOR") for bankers' acceptances, (y) the prime rate of Bank of America, N.A.'s Canada branch, and (z) a bankers' acceptance equivalent rate for a one month interest period plus 1.00%) plus an initial margin of 1.25% , or (ii) a bankers' acceptance equivalent rate of the rate of interest per annum equal to the annual rates applicable to Canadian Dollar bankers' acceptances on the "CDOR Page" of Reuter Monitor Money Rates Service, plus five basis points, and an initial margin of 1.25% . Unutilized commitments are subject to an annual fee in the amount of 0.30% if the total outstanding borrowings are less than 25% of the aggregate commitments, or a per annum fee of 0.25% if such total outstanding borrowings are 25% or more of the aggregate commitments. The Company is also required to pay a letter of credit fronting fee to each letter of credit issuer equal to 0.125% per annum of the stated amount of each such letter of credit (or such other amount as may be mutually agreed by the borrowers under the facility and the applicable letter of credit issuer), as well as a fee to all lenders equal to the applicable margin for LIBOR or bankers’ acceptance equivalent rate loans, as applicable, times the average daily stated amount of all outstanding letters of credit. The amended and restated revolving credit facility, as amended by the Amendment, subjects the Company to a springing minimum fixed charge coverage ratio (as defined in the underlying credit agreement) of 1.0 to 1.0 calculated at the end of each of our fiscal quarters on a rolling four quarter basis when aggregate availability (as defined in the underlying credit agreement) is less than the greater of (i) $65.0 million and (ii) 10% of the aggregate borrowing base. The Company was not subject to the fixed charge coverage ratio covenant under the amended and restated credit agreement during the three months ended April 30, 2016 . As of April 30, 2016 , the Company had borrowings of $266.9 million under the revolving credit facility which is included in "Notes payable" on the Condensed Consolidated Balance Sheet. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Apr. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-term Debt | LONG-TERM DEBT On August 14, 2014, the Company and certain of its subsidiaries entered into a real estate backed term loan agreement (the "Term Loan Agreement"). The total initial borrowings under the Term Loan Agreement were $150.0 million . The Company is required to make $2.5 million principal payments quarterly, which began on November 1, 2014. Under the Term Loan Agreement, the Company at its option may request the establishment of one or more new term loan commitments in increments of at least $10.0 million, but not to exceed $50.0 million in total, subject to the approval of the lenders electing to participate in such incremental loans and the satisfaction of the conditions required by the Term Loan Agreement. The Company will be required to make quarterly principal payments on these incremental borrowings in accordance with the terms of the Term Loan Agreement. Proceeds from this Term Loan Agreement were used to pay down borrowings on the Company's amended and restated revolving credit facility. On April 29, 2016, the Company entered into a First Amendment Agreement (the “Term Loan Amendment”) to the Term Loan Agreement which amends the Term Loan Agreement. The Term Loan Amendment was entered into to reflect the changes to the amended and restated revolving credit facility reflected in the Amendment. The Term Loan Agreement will terminate on the earlier of (a) August 14, 2022 and (b) the date that is ninety days prior to the termination date of the Company’s amended and restated revolving credit agreement, as amended. Under the Term Loan Agreement, the borrowers at their option may request the establishment of one or more new term loan commitments in increments of at least $10.0 million , but not to exceed $50.0 million in total, subject to the approval of the lenders electing to participate in such incremental loans and the satisfaction of the conditions required by the Term Loan Agreement. The borrowers will be required to make quarterly principal payments on these incremental borrowings in accordance with the terms of the Term Loan Agreement. Borrowings under the Term Loan Agreement bear interest at rates that, at the Company's option, can be either: (1) a base rate generally defined as the sum of (i) the highest of (x) the administrative agent's prime rate , (y) the average overnight federal funds effective rate plus 0.50% and (z) one-month LIBOR plus one percent ( 1% ) per annum and (ii) a margin of 1.50% ; or, (2) a LIBOR rate generally defined as the sum of (i) LIBOR (as published by Reuters or other commercially available sources) for one, two, three or six months or, if approved by all affected lenders, nine months (all as selected by the Company), and (ii) a margin of 2.50% . Interest accrued on borrowings under the Term Loan Agreement is payable in arrears. Interest accrued on any LIBOR loan is payable on the last day of the interest period applicable to the loan and, with respect to any LIBOR loan of more than three (3) months, on the last day of every three (3) months of such interest period. Interest accrued on base rate loans is payable on the first day of every month. The Company is also required to pay certain customary fees to the administrative agent. The borrowers' obligations under the Term Loan Agreement are secured by certain parcels of the borrowers' real property. As of April 30, 2016 , the Company had borrowings of $132.5 million under the Term Loan Agreement which is included in "Long-term debt" on the Condensed Consolidated Balance Sheet. During the second quarter of fiscal 2015, the Company entered into an amendment to an existing lease agreement for the office space utilized as the Company's corporate headquarters in Providence, Rhode Island. The amendment provides for additional office space to be utilized by the Company and extends the lease term for an additional 10 years. The lease qualifies for capital lease treatment pursuant to FASB ASC 840, Leases, and the estimated fair value of the building was initially recorded on the Condensed Consolidated Balance Sheet at lease inception, with the capital lease obligation included in "Long-term debt." A portion of each lease payment reduces the amount of the lease obligation, and a portion is recorded as interest expense at an effective rate of approximately 12.38% . The capital lease obligation as of April 30, 2016 was $13.8 million . The Company recorded $0.4 million and $1.3 million of interest expense related to this lease during the three and nine months ended April 30, 2016 . The Company recorded $0.4 million and $0.5 million of interest expense related to this lease during the three and nine months ended May 2, 2015 . During the fiscal year ended July 28, 2012, the Company entered into a lease agreement for a new distribution facility in Aurora, Colorado. At the conclusion of the fiscal year ended August 3, 2013, actual construction costs exceeded the construction allowance as defined by the lease agreement, and therefore, the Company determined it met the criteria for continuing involvement pursuant to FASB ASC 840, Leases , and applied the financing method to account for this transaction during the fourth quarter of fiscal 2013. Under the financing method, the book value of the distribution facility and related accumulated depreciation remains on the Condensed Consolidated Balance Sheet. The construction allowance is recorded as a financing obligation in "Long-term debt." A portion of each lease payment reduces the amount of the financing obligation, and a portion is recorded as interest expense at an effective rate of approximately 7.32% . The financing obligation as of April 30, 2016 was $31.8 million . The Company recorded $0.6 million of interest expense related to this lease during each of the three months ended April 30, 2016 and May 2, 2015 and $1.8 million and $1.9 million during the nine months ended April 30, 2016 and May 2, 2015 , respectively. |
SUBSEQUENT EVENTS (Notes)
SUBSEQUENT EVENTS (Notes) | 9 Months Ended |
Apr. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Acquisition of Haddon House Food Products, Inc. and certain related affiliates. On May 13, 2016, the Company completed the acquisitions all of the outstanding equity interests of Haddon House Food Products, Inc. and certain affiliated entities for an aggregate purchase price of approximately $217.5 million (the “Purchase Price”) in cash, subject to a post-closing net working capital adjustment. The Company financed the Purchase Price through a combination of available cash and borrowings under the Company’s amended and restated revolving credit facility, as amended. Interest Rate Swap Agreements On June 7, 2016, the Company entered into two interest rate swap agreements to hedge against LIBOR movements on the current variable rate related to the Company’s amended and restated revolving credit facility. The first agreement has an effective date of June 9, 2016 and expires in June of 2019. This interest rate swap agreement has a notional principal amount of $50.0 million and provides for the Company to pay interest for a three year period at a fixed annual rate of 0.8725% while receiving interest for the same period at one-month LIBOR on the same notional principal amount. This swap, in conjunction with the amended and restated revolving credit facility, effectively fixes the interest rate on the $50.0 million notional amount to a rate of 2.1225% for the remainder of the first twelve months following the date of the Amendment. The second agreement has an effective date of June 9, 2016 and expires concurrent with the scheduled maturity of our amended and restated revolving credit facility in April of 2021. This interest rate swap agreement has a notional principal amount of $25.0 million and provides for the Company to pay interest for a five year period at a fixed rate of 1.065% while receiving interest for the same period at one-month LIBOR on the same notional principal amount. This swap, in conjunction with the amended and restated revolving credit facility, effectively fixes the interest rate on the $25.0 million notional amount to a rate of 2.315% for the remainder of the first twelve months following the date of the Amendment. |
SIGNIFICANT ACCOUNTING POLICI18
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Apr. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | (b) Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States have been condensed or omitted. In the Company’s opinion, these condensed consolidated financial statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for interim periods, however, may not be indicative of the results that may be expected for a full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 1, 2015 . Net sales consist primarily of sales of natural, organic and specialty products to retailers, adjusted for customer volume discounts, returns and allowances. Net sales also include amounts charged by the Company to customers for shipping and handling and fuel surcharges. The principal components of cost of sales include the amounts paid to manufacturers and growers for product sold, plus the cost of transportation necessary to bring the product to the Company’s distribution facilities. Cost of sales also includes amounts incurred by the Company’s manufacturing subsidiary, United Natural Trading LLC, which does business as Woodstock Farms Manufacturing, for inbound transportation costs and depreciation of manufacturing equipment offset by consideration received from suppliers in connection with the purchase or promotion of the suppliers’ products. Operating expenses include salaries and wages, employee benefits (including payments under the Company’s Employee Stock Ownership Plan prior to the termination of the plan in the quarter ended January 31, 2016), warehousing and delivery, selling, occupancy, insurance, administrative, share-based compensation and amortization expense. Operating expenses also include depreciation expense related to the wholesale and retail divisions. Other expense (income) includes interest on outstanding indebtedness, interest income and miscellaneous income and expenses. As noted above, the Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with inbound freight are generally recorded in cost of sales, whereas shipping and handling costs for selecting, quality assurance, and outbound transportation are recorded in operating expenses. Outbound shipping and handling costs, including allocated employee benefit expenses, totaled $111.9 million and $113.0 million for the three months ended April 30, 2016 and May 2, 2015 , respectively. Outbound shipping and handling costs, including allocated employee benefit expenses, totaled $339.3 million and $337.7 million for the nine months ended April 30, 2016 and May 2, 2015 , respectively. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) - USD ($) $ in Millions | 9 Months Ended | |
Apr. 30, 2016 | Mar. 07, 2016 | |
Nor-Cal Produce | ||
Business Acquisition [Line Items] | ||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | (in thousands) Preliminary Purchase Price Allocation Accounts receivable $ 8,483 Inventories 1,902 Property and equipment 10,743 Other assets 1,097 Customer relationships 30,000 Tradename and other intangible assets 1,500 Goodwill 39,458 Total assets $ 93,183 Liabilities 24,603 Total purchase price $ 68,580 | |
Global Organic | ||
Business Acquisition [Line Items] | ||
Finite-Lived Customer Lists, Gross | $ 8.4 |
RESTRUCTURING ACTIVITIES AND 20
RESTRUCTURING ACTIVITIES AND ASSET IMPAIRMENTS RESTRUCTURING ACTIVITIES AND ASSET IMPAIRMENTS (Tables) | 9 Months Ended |
Apr. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs [Table Text Block] | Restructuring Costs Cash Payments Restructuring Cost Liability as of April 30, 2016 Severance $ 3,443 $ (2,241 ) $ 1,202 Early lease termination and facility closing costs 368 (368 ) — Operational transfer costs 570 (570 ) — Total $ 4,381 $ (3,179 ) $ 1,202 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Apr. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the weighted average number of shares outstanding used in the computation of the basic and diluted earnings per share | The following is a reconciliation of the basic and diluted number of shares used in computing earnings per share (in thousands): Three months ended Nine months ended April 30, May 2, April 30, May 2, Basic weighted average shares outstanding 50,350 50,079 50,290 49,998 Net effect of dilutive stock awards based upon the treasury stock method 29 269 70 248 Diluted weighted average shares outstanding 50,379 50,348 50,360 50,246 |
FAIR VALUE MEASUREMENTS OF FI22
FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Apr. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | Fair Value at April 30, 2016 Fair Value at August 1, 2015 (In thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Liabilities: Interest Rate Swap — $ (4,206 ) — — $ (726 ) — |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | April 30, 2016 August 1, 2015 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Liabilities: Long-term debt, including current portion $ 178,073 $ 184,565 $ 186,393 $ 192,679 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 9 Months Ended |
Apr. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of business segment information | The following table reflects business segment information for the periods indicated (in thousands): Wholesale Other Eliminations Unallocated Consolidated Three months ended April 30, 2016: Net sales $ 2,111,695 $ 70,217 $ (49,808 ) $ — $ 2,132,104 Operating income (loss) 62,682 3,811 (477 ) — 66,016 Interest expense — — — 4,384 4,384 Interest income — — — (487 ) (487 ) Other, net — — — (557 ) (557 ) Income before income taxes 62,676 Depreciation and amortization 20,976 (2,856 ) — — 18,120 Capital expenditures 8,340 261 — — 8,601 Goodwill 301,600 17,732 — — 319,332 Total assets 2,475,054 192,282 (21,404 ) — 2,645,932 Three months ended May 2, 2015: Net sales $ 2,093,384 $ 57,415 $ (36,156 ) $ — $ 2,114,643 Operating income (loss) 75,181 (6,096 ) (113 ) — 68,972 Interest expense — — — 3,920 3,920 Interest income — — — (123 ) (123 ) Other, net — — — (4,396 ) (4,396 ) Income before income taxes 69,571 Depreciation and amortization 15,751 1,798 — — 17,549 Capital expenditures 41,569 812 — — 42,381 Goodwill 250,798 17,731 — — 268,529 Total assets 2,387,329 185,855 (14,863 ) — 2,558,321 Wholesale Other Eliminations Unallocated Consolidated Nine months ended April 30, 2016: Net sales $ 6,200,668 $ 181,709 $ (125,912 ) $ — $ 6,256,465 Restructuring and asset impairment expenses 2,811 1,983 — — 4,794 Operating income (loss) 172,549 (9,563 ) (1,363 ) — 161,623 Interest expense — — — 11,734 11,734 Interest income — — — (1,037 ) (1,037 ) Other, net — — — 373 373 Income before income taxes 150,553 Depreciation and amortization 52,531 (1,564 ) — — 50,967 Capital expenditures 27,637 1,436 — — 29,073 Goodwill 301,600 17,732 — — 319,332 Total assets 2,475,054 192,282 (21,404 ) — 2,645,932 Nine months ended May 2, 2015: Net sales $ 6,061,161 $ 165,142 $ (102,638 ) $ — $ 6,123,665 Restructuring and asset impairment expenses 803 — — — 803 Operating income (loss) 199,241 (22,893 ) 520 — 176,868 Interest expense — — — 10,729 10,729 Interest income — — — (285 ) (285 ) Other, net — — — (3,785 ) (3,785 ) Income before income taxes 170,209 Depreciation and amortization 43,149 4,057 — — 47,206 Capital expenditures 96,239 2,305 — — 98,544 Goodwill 250,798 17,731 — — 268,529 Total assets 2,387,329 185,855 (14,863 ) — 2,558,321 |
SIGNIFICANT ACCOUNTING POLICI24
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2016 | May. 02, 2015 | Apr. 30, 2016 | May. 02, 2015 | |
Significant Accounting Policies | ||||
Total outbound shipping and handling costs | $ 111.9 | $ 113 | $ 339.3 | $ 337.7 |
RECENTLY ISSUED ACCOUNTING PR25
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Millions | Apr. 30, 2016 | Aug. 01, 2015 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred Finance Costs, Noncurrent, Net | $ 5.5 | $ 4.2 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Apr. 30, 2016 | Mar. 31, 2016 | Mar. 07, 2016 | Aug. 01, 2015 | May. 02, 2015 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | $ 319,332 | $ 266,640 | $ 268,529 | ||
Nor-Cal Produce | |||||
Business Acquisition [Line Items] | |||||
Payments to Acquire Businesses, Gross | 68,600 | ||||
Business Acquisition, Pro Forma Revenue | $ 13,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Accounts receivable | $ 8,483 | ||||
Inventories | 1,902 | ||||
Property and equipment | 10,743 | ||||
Other assets | 1,097 | ||||
Customer relationships | 30,000 | ||||
Tradename and other intangible assets | 1,500 | ||||
Goodwill | 39,458 | ||||
Total assets | 93,183 | ||||
Liabilities | 24,603 | ||||
Total purchase price | $ 68,580 | ||||
Nor-Cal Produce | Customer Lists | |||||
Business Acquisition [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 13 years | ||||
Nor-Cal Produce | Tradename | |||||
Business Acquisition [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||||
Global Organic | |||||
Business Acquisition [Line Items] | |||||
Payments to Acquire Businesses, Gross | $ 20,600 | ||||
Finite-Lived Customer Lists, Gross | $ 8,400 | ||||
Global Organic | Customer Lists | |||||
Business Acquisition [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 10 years |
RESTRUCTURING ACTIVITIES AND 27
RESTRUCTURING ACTIVITIES AND ASSET IMPAIRMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2016 | Jan. 30, 2016 | May. 02, 2015 | Apr. 30, 2016 | May. 02, 2015 | |
Restructuring Costs [Abstract] | |||||
Severance Costs | $ 3,443 | ||||
Restructuring and asset impairment expenses | $ 0 | $ 0 | 4,794 | $ 803 | |
Cash Payments | |||||
Severance Costs | 3,443 | ||||
Payments for Restructuring | (3,179) | ||||
Restructuring Cost Liability as of April 30, 2016 | |||||
Restructuring Reserve | 1,202 | 1,202 | |||
Lease termination, facility closing costs and operational transfer costs | 938 | ||||
Asset Impairment Charges | $ 400 | ||||
2016 cost-saving measures | |||||
Restructuring Costs [Abstract] | |||||
Restructuring and asset impairment expenses | 4,381 | ||||
Employee Severance [Member] | |||||
Restructuring Cost Liability as of April 30, 2016 | |||||
Restructuring Reserve | 1,202 | 1,202 | |||
Other Restructuring [Member] | |||||
Restructuring Costs [Abstract] | |||||
Other Restructuring Costs | 570 | ||||
Cash Payments | |||||
Other Restructuring Costs | 570 | ||||
Restructuring Cost Liability as of April 30, 2016 | |||||
Restructuring Reserve | 0 | 0 | |||
Cash paid for restructuring [Member] | |||||
Restructuring Costs [Abstract] | |||||
Severance Costs | (2,241) | ||||
Other Restructuring Costs | (570) | ||||
Cash Payments | |||||
Severance Costs | (2,241) | ||||
Loss on Contract Termination | (368) | ||||
Other Restructuring Costs | (570) | ||||
Contract Termination [Member] | |||||
Cash Payments | |||||
Loss on Contract Termination | 368 | ||||
Restructuring Cost Liability as of April 30, 2016 | |||||
Restructuring Reserve | $ 0 | $ 0 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2016 | May. 02, 2015 | Apr. 30, 2016 | May. 02, 2015 | |
Reconciliation of the basic and diluted number of shares used in computing earnings per share: | ||||
Basic weighted average shares outstanding | 50,350,000 | 50,079,000 | 50,290,000 | 49,998,000 |
Net effect of dilutive stock awards based upon the treasury stock method | 29,000 | 269,000 | 70,000 | 248,000 |
Diluted weighted average shares outstanding | 50,379,000 | 50,348,000 | 50,360,000 | 50,246,000 |
Anti-dilutive share-based payment awards outstanding (in shares) | 146,844 | 241 | 100,048 | 5,250 |
FAIR VALUE MEASUREMENTS OF FI29
FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Apr. 30, 2016 | Aug. 01, 2015 |
Fair Value Disclosures [Abstract] | ||
Interest Rate Derivative Liabilities, at Fair Value | $ (4,206) | $ (726) |
Long term debt, including current portion, carrying value | 178,073 | 186,393 |
Long term debt, including current portion, fair value | $ 184,565 | $ 192,679 |
Derivative, Forward Interest Rate | 1.795% | |
Derivative, Notional Amount | $ 140,000 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2016 | May. 02, 2015 | Apr. 30, 2016 | May. 02, 2015 | Aug. 01, 2015 | |
Business segment information | |||||
Net sales | $ 2,132,104 | $ 2,114,643 | $ 6,256,465 | $ 6,123,665 | |
Restructuring and asset impairment expenses | 0 | 0 | 4,794 | 803 | |
Operating income (loss) | 66,016 | 68,972 | 161,623 | 176,868 | |
Interest expense | 4,384 | 3,920 | 11,734 | 10,729 | |
Interest income | (487) | (123) | (1,037) | (285) | |
Other, net | (557) | (4,396) | 373 | (3,785) | |
Income before income taxes | 62,676 | 69,571 | 150,553 | 170,209 | |
Depreciation and amortization | 18,120 | 17,549 | 50,967 | 47,206 | |
Capital expenditures | 8,601 | 42,381 | 29,073 | 98,544 | |
Goodwill | 319,332 | 268,529 | 319,332 | 268,529 | $ 266,640 |
Total assets | 2,645,932 | 2,558,321 | 2,645,932 | 2,558,321 | $ 2,550,190 |
Wholesale | |||||
Business segment information | |||||
Net sales | 2,111,695 | 2,093,384 | 6,200,668 | 6,061,161 | |
Restructuring and asset impairment expenses | 2,811 | 803 | |||
Operating income (loss) | 62,682 | 75,181 | 172,549 | 199,241 | |
Interest expense | 0 | 0 | 0 | 0 | |
Interest income | 0 | 0 | 0 | 0 | |
Other, net | 0 | 0 | 0 | 0 | |
Depreciation and amortization | 20,976 | 15,751 | 52,531 | 43,149 | |
Capital expenditures | 8,340 | 41,569 | 27,637 | 96,239 | |
Goodwill | 301,600 | 250,798 | 301,600 | 250,798 | |
Total assets | 2,475,054 | 2,387,329 | 2,475,054 | 2,387,329 | |
Other | |||||
Business segment information | |||||
Net sales | 70,217 | 57,415 | 181,709 | 165,142 | |
Restructuring and asset impairment expenses | 1,983 | 0 | |||
Operating income (loss) | 3,811 | (6,096) | (9,563) | (22,893) | |
Interest expense | 0 | 0 | 0 | 0 | |
Interest income | 0 | 0 | 0 | 0 | |
Other, net | 0 | 0 | 0 | 0 | |
Depreciation and amortization | (2,856) | 1,798 | (1,564) | 4,057 | |
Capital expenditures | 261 | 812 | 1,436 | 2,305 | |
Goodwill | 17,732 | 17,731 | 17,732 | 17,731 | |
Total assets | 192,282 | 185,855 | 192,282 | 185,855 | |
Eliminations | |||||
Business segment information | |||||
Net sales | (49,808) | (36,156) | (125,912) | (102,638) | |
Restructuring and asset impairment expenses | 0 | 0 | |||
Operating income (loss) | (477) | (113) | (1,363) | 520 | |
Interest expense | 0 | 0 | 0 | 0 | |
Interest income | 0 | 0 | 0 | 0 | |
Other, net | 0 | 0 | 0 | 0 | |
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Capital expenditures | 0 | 0 | 0 | 0 | |
Goodwill | 0 | 0 | 0 | 0 | |
Total assets | (21,404) | (14,863) | (21,404) | (14,863) | |
Unallocated | |||||
Business segment information | |||||
Net sales | 0 | 0 | 0 | 0 | |
Restructuring and asset impairment expenses | 0 | 0 | |||
Operating income (loss) | 0 | 0 | 0 | 0 | |
Interest expense | 4,384 | 3,920 | 11,734 | 10,729 | |
Interest income | 487 | 123 | 1,037 | 285 | |
Other, net | (557) | 4,396 | (373) | 3,785 | |
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Capital expenditures | 0 | 0 | 0 | 0 | |
Goodwill | 0 | 0 | 0 | 0 | |
Total assets | $ 0 | $ 0 | $ 0 | $ 0 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) | Apr. 30, 2016USD ($) | Apr. 29, 2016USD ($) | Aug. 01, 2015USD ($) |
Line of Credit Facility [Line Items] | |||
Notes Payable | $ 266,899,000 | $ 362,993,000 | |
Debt Instrument, Fee Amount | $ 0.00125 | ||
CANADA | |||
Line of Credit Facility [Line Items] | |||
Maximum Borrowing Base | 50,000,000 | ||
UNITED STATES | |||
Line of Credit Facility [Line Items] | |||
Maximum Borrowing Base | 850,000,000 | ||
Minimum | |||
Line of Credit Facility [Line Items] | |||
Maximum Borrowing Base | 10,000,000 | ||
Maximum | |||
Line of Credit Facility [Line Items] | |||
Maximum Borrowing Base | 600,000,000 | ||
Amended and restated revolving credit facility | |||
Line of Credit Facility [Line Items] | |||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.30% | ||
Debt Instrument, Covenant Fixed Charge Coverage Ratio Minimum, Numerator | 1 | ||
Debt Instrument, Covenant Fixed Charge Coverage Ratio Minimum, Denominator | 1 | ||
Line of Credit Facility, Maximum Percentage of Aggregate Availability of the Aggregate Borrowing Base | 10.00% | ||
Amended and restated revolving credit facility | UNITED STATES | Federal Funds Effective Rate | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Description of Variable Rate Basis | federal funds effective rate | ||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||
Amended and restated revolving credit facility | UNITED STATES | LIBOR | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Description of Variable Rate Basis | LIBOR | ||
initial applicable margin | 1.25% | ||
Amended and restated revolving credit facility | UNITED STATES | One-month LIBOR | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR | ||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% | ||
Debt Instrument, Basis Spread on Variable Rate | 0.25% | ||
Amended and restated revolving credit facility | UNITED STATES | Reuters Canadian Deposit Offering Rate | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Description of Variable Rate Basis | Reuters Canadian Deposit Offering Rate ("CDOR") | ||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||
Amended and restated revolving credit facility | UNITED STATES | Debt Instrument Variable Rate Bankers Acceptance Equivalent for One Month Interest Period [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Description of Variable Rate Basis | bankers' acceptance equivalent rate for a one month interest period | ||
initial applicable margin | 1.25% | ||
Amended and restated revolving credit facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Line of Credit Facility Percentage of Average Daily Balance of Amount Used | 25.00% | ||
Line of Credit Facility, Maximum Aggregate Availability of the Aggregate Borrowing Base | $ 65,000,000 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2016 | May. 02, 2015 | Apr. 30, 2016 | May. 02, 2015 | Aug. 01, 2015 | |
Long-term debt instrument | |||||
Proceeds from borrowings of long-term debt | $ 0 | $ 150,000 | |||
Repayments of Long-term Debt | 8,320 | 8,252 | |||
Long term debt, including current portion, carrying value | $ 178,073 | 178,073 | $ 186,393 | ||
Interest expense | 4,384 | $ 3,920 | 11,734 | 10,729 | |
Term loan | |||||
Long-term debt instrument | |||||
Repayments of Long-term Debt | 2,500 | ||||
Long term debt, including current portion, carrying value | 132,500 | 132,500 | |||
Capital lease obligation | |||||
Long-term debt instrument | |||||
Interest Expense, Lessee, Assets under Capital Lease | $ 400 | $ 400 | $ 1,300 | 500 | |
Lease Term | 10 years | ||||
Effective interest rate on debt | 12.38% | 12.38% | |||
Capital Lease Obligation | $ 13,800 | $ 13,800 | |||
Sale Leaseback Financing Obligation | |||||
Long-term debt instrument | |||||
Long term debt, including current portion, carrying value | $ 31,800 | $ 31,800 | |||
Effective interest rate on debt | 7.32% | 7.32% | |||
Interest expense | $ 600 | $ 1,800 | $ 1,900 | ||
Minimum | Term loan | |||||
Long-term debt instrument | |||||
Long term debt, including current portion, carrying value | 10,000 | 10,000 | |||
Maximum | Term loan | |||||
Long-term debt instrument | |||||
Long term debt, including current portion, carrying value | $ 50,000 | $ 50,000 | |||
Base Rate [Member] | Term loan | |||||
Long-term debt instrument | |||||
Debt Instrument, Description of Variable Rate Basis | administrative agent's prime rate | ||||
initial applicable margin | 1.50% | ||||
Federal Funds Effective Swap Rate [Member] | Term loan | |||||
Long-term debt instrument | |||||
Debt Instrument, Description of Variable Rate Basis | overnight federal funds effective rate | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||||
One-month LIBOR | Term loan | |||||
Long-term debt instrument | |||||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | ||||
LIBOR | Term loan | |||||
Long-term debt instrument | |||||
Debt Instrument, Description of Variable Rate Basis | one, two, three or six months or, if approved by all affected lenders, nine months | ||||
initial applicable margin | 2.50% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jul. 30, 2016 | Jun. 07, 2016 | Apr. 30, 2016 | |
Subsequent Event [Line Items] | |||
Derivative, Notional Amount | $ 140 | ||
Interest Rate Swap - 3 year | |||
Subsequent Event [Line Items] | |||
Derivative, Fixed Interest Rate | 0.8725% | ||
Derivative, Term of Contract | 3 years | ||
Interest Rate Swap - 5 year | |||
Subsequent Event [Line Items] | |||
Derivative, Fixed Interest Rate | 1.065% | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Payments to Acquire Businesses, Gross | $ 217.5 | ||
Derivative, Notional Amount | $ 25 | ||
Derivative, Term of Contract | 5 years | ||
Subsequent Event [Member] | Interest Rate Swap - 3 year | |||
Subsequent Event [Line Items] | |||
Derivative, Notional Amount | $ 50 | ||
Total fixed interest rate on notional amount | 2.1225% | ||
Subsequent Event [Member] | Interest Rate Swap - 5 year | |||
Subsequent Event [Line Items] | |||
Total fixed interest rate on notional amount | 2.315% |