Exhibit 99.1
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IMMEDIATE RELEASE
June 2, 2009
UNITED NATURAL FOODS ANNOUNCES THIRD QUARTER 2009
DILUTED EPS OF $0.39, A 30% INCREASE
OVER DILUTED EPS FOR THIRD QUARTER 2008
Third Quarter Highlights
· | Net sales increased 0.3% to $889.5 million compared with the third quarter of fiscal 2008 |
· | Net sales increased 3.3%, excluding the impact of UNFI Specialty |
· | Net income totaled $16.8 million |
Dayville, Connecticut – June 2, 2009 -- United Natural Foods, Inc. (Nasdaq: UNFI) today reported net sales for the third quarter of fiscal 2009, ended May 2, 2009, of $889.5 million, an increase of approximately $2.6 million, or 0.3%, from net sales of $887.0 million recorded in the third quarter of fiscal 2008. Excluding the impact in both periods of the UNFI Specialty Distribution Services division (“Specialty”), which the Company acquired in the second quarter of fiscal 2008, net sales increased by approximately $26.5 million, or 3.3%, to $836.2 million.
“Our record earnings in the third quarter reflect our continued focus on cash flow, market share and the further expansion and integration of our specialty business. We continued to benefit from lower diesel fuel costs, while improved operational efficiencies and expense control by all of our associates resulted in earnings that represented a 30% increase over the third quarter of fiscal 2008,” said Steven Spinner, President and Chief Executive Officer.
Net income was $16.8 million, or $0.39 per diluted share, for the third quarter of fiscal 2009 compared with net income for the third quarter of fiscal 2008 of $13.0 million, or $0.30 per diluted share.
Gross margin was 19.0% for the third quarter of fiscal 2009, which represents a 27 basis point improvement from gross margin of 18.7% for the third quarter of fiscal 2008, primarily due to higher gross margin within the Specialty division.
Operating expenses as a percentage of net sales decreased by 35 basis points during the third quarter of fiscal 2009 to 15.6% of net sales, or $138.3 million, from 15.9% of net sales, or $141.0 million, for the third quarter of fiscal 2008. Operating expenses were positively impacted by continued expense control programs across all of the Company’s divisions, lower diesel fuel prices, and operational improvements in the Company’s distribution centers.
“In April, we successfully completed the relocation and expansion of our specialty distribution facility from East Brunswick, New Jersey to our new 675,000 square foot facility in York, Pennsylvania,” said Mr. Spinner. “With this move, we now have our first fully integrated facility, which allows us to offer our mid-Atlantic customers a full assortment of natural, organic and specialty foods from a single facility on a common system.”
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Updates to Fiscal 2009 Guidance
The Company is confirming net sales guidance for fiscal year 2009, ending August 1, 2009, to $3.45 billion to $3.50 billion, which represents a 2.5% to 4.0% increase in total net sales over fiscal 2008, or 4.5% to 6.0% after adjusting for the 53rd week in fiscal 2008.
In addition, the Company is raising its earnings per share guidance for fiscal 2009 to a range of $1.34 to $1.38 per diluted share. The Company had previously announced earnings per share guidance of $1.28 to $1.36 per diluted share. The Company’s revised guidance reflects the impact of improved operating efficiencies and cost controls.
The Company is also lowering its anticipated fiscal 2009 capital expenditures guidance to a range of approximately $30 to $35 million. The Company had previously announced anticipated fiscal 2009 capital expenditures guidance of approximately $40 to $45 million.
The Company’s guidance is based on a number of assumptions, many of which are outside the Company’s control. If any of these assumptions vary, the Company’s guidance may change. There can be no assurance that the Company will achieve these results.
Conference Call & Webcast
The Company’s third quarter 2009 conference call and audio webcast will be held at 11:00 a.m. EDT on June 2, 2009. The audio webcast of the conference call will be available to the public, on a listen-only basis, via the Internet at www.fulldisclosure.com or at the Investors section of the Company’s website at www.unfi.com. The online archive of the webcast will be available on the Company’s website for 30 days.
Non-GAAP Reconciliation
The following table details the non-GAAP measures for the third quarter of fiscal 2009 and 2008:
Quarter Ended: (in thousands) | May 2, 2009 | April 26, 2008 | ||||||
Net sales, excluding UNFI Specialty Distribution Services: | $ | 836,243 | $ | 809,728 | ||||
UNFI Specialty Distribution Services net sales: | 53,295 | 77,234 | ||||||
Net sales, including UNFI Specialty Distribution Services: | $ | 889,538 | $ | 886,962 |
About United Natural Foods
United Natural Foods, Inc. (www.unfi.com) carries and distributes more than 60,000 products to more than 17,000 customers nationwide. The Company serves a wide variety of retail formats including conventional supermarket chains, natural product superstores, independent retail operators and the food service channel. United Natural Foods, Inc. was ranked by Forbes in 2005 as one of the “Best Managed Companies in America,” ranked by Fortune in 2006 and 2007 as one of its “Most Admired Companies,” ranked by Business Ethics as one of its “100 Best Corporate Citizens for 2006” and winner of the Supermarket News 2008 Sustainability Excellence Award.
Financial Tables Follow
For more information on United Natural Foods, Inc., visit the Company’s website at www.unfi.com.
AT THE COMPANY: | FINANCIAL RELATIONS BOARD |
Mark Shamber | Joseph Calabrese |
Chief Financial Officer | General Information |
(860) 779-2800 | (212) 827-3772 |
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the Company's business that are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, including but not limited to general business conditions, the impact of competition and our dependence on principal customers, see “Risk Factors” in the Company's quarterly report on Form 10-Q filed with the Commission on March 11, 2009, and its other filings under the Securities Exchange Act of 1934, as amended. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by applicable laws. Any projections of future results of operations are based on a number of assumptions, many of which are outside the Company’s control and should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. The Company may from time to time update these publicly announced projections, but it is not obligated to do so.
UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
Three months ended | Nine months ended | |||||||||||||||
May 2, 2009 | April 26, 2008 | May 2, 2009 | April 26, 2008 | |||||||||||||
Net sales | $ | 889,538 | $ | 886,962 | $ | 2,601,409 | $ | 2,454,007 | ||||||||
Cost of sales | 720,787 | 721,119 | 2,103,004 | 1,998,021 | ||||||||||||
Gross profit | 168,751 | 165,843 | 498,405 | 455,986 | ||||||||||||
Operating expenses | 138,327 | 141,018 | 417,082 | 387,384 | ||||||||||||
Total operating expenses | 138,327 | 141,018 | 417,082 | 387,384 | ||||||||||||
Operating income | 30,424 | 24,825 | 81,323 | 68,602 | ||||||||||||
Other expense (income): | ||||||||||||||||
Interest expense | 1,723 | 4,186 | 8,333 | 12,137 | ||||||||||||
Interest income | 11 | (140 | ) | (331 | ) | (472 | ) | |||||||||
Other, net | 134 | 80 | 281 | 154 | ||||||||||||
Total other expense | 1,868 | 4,126 | 8,283 | 11,819 | ||||||||||||
Income before income taxes | 28,556 | 20,699 | 73,040 | 56,783 | ||||||||||||
Provision for income taxes | 11,777 | 7,700 | 29,393 | 21,123 | ||||||||||||
Net income | $ | 16,779 | $ | 12,999 | $ | 43,647 | $ | 35,660 | ||||||||
Basic per share data: | ||||||||||||||||
Net income | $ | 0.39 | $ | 0.30 | $ | 1.02 | $ | 0.84 | ||||||||
Weighted average basic shares of common stock | 42,871 | 42,727 | 42,827 | 42,678 | ||||||||||||
Diluted per share data: | ||||||||||||||||
Net income | $ | 0.39 | $ | 0.30 | $ | 1.02 | $ | 0.83 | ||||||||
Weighted average diluted shares of common stock | 42,943 | 42,847 | 42,939 | 42,858 |
UNITED NATURAL FOODS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except per share data)
May 2, 2009 | August 2, 2008 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 6,686 | $ | 25,333 | ||||
Accounts receivable, net | 197,580 | 179,063 | ||||||
Notes receivable, trade, net | 606 | 1,412 | ||||||
Inventories | 418,242 | 394,364 | ||||||
Prepaid expenses and other current assets | 14,626 | 13,307 | ||||||
Deferred income taxes | 14,221 | 14,221 | ||||||
Total current assets | 651,961 | 627,700 | ||||||
Property and equipment, net | 241,186 | 234,115 | ||||||
Other assets: | ||||||||
Goodwill | 166,471 | 170,609 | ||||||
Notes receivable, trade, net | 2,242 | 2,349 | ||||||
Intangible assets, net | 39,821 | 33,689 | ||||||
Other | 19,201 | 16,021 | ||||||
Total assets | $ | 1,120,882 | $ | 1,084,483 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Notes payable | $ | 248,573 | $ | 288,050 | ||||
Accounts payable | 176,510 | 160,418 | ||||||
Accrued expenses and other current liabilities | 73,485 | 63,308 | ||||||
Current portion of long-term debt | 4,911 | 5,027 | ||||||
Total current liabilities | 503,479 | 516,803 | ||||||
Long-term debt, excluding current portion | 54,875 | 58,485 | ||||||
Deferred income taxes | 10,446 | 9,058 | ||||||
Other long-term liabilities | 24,456 | 20,087 | ||||||
Total liabilities | 593,256 | 604,433 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.01 par value, authorized 5,000 shares at May 2, 2009 and August 2, 2008; none issued and outstanding | - | - | ||||||
Common stock, $0.01 par value, authorized 100,000 shares; 43,170 issued and 42,942 outstanding shares at May 2, 2009; 43,100 issued and 42,871 outstanding shares at August 2, 2008 | 432 | 431 | ||||||
Additional paid-in capital | 174,166 | 169,238 | ||||||
Unallocated shares of Employee Stock Ownership Plan | (917 | ) | (1,040 | ) | ||||
Treasury stock | (6,092 | ) | (6,092 | ) | ||||
Accumulated other comprehensive loss | (1,876 | ) | (753 | ) | ||||
Retained earnings | 361,913 | �� | 318,266 | |||||
Total stockholders’ equity | 527,626 | 480,050 | ||||||
Total liabilities and stockholders’ equity | $ | 1,120,882 | $ | 1,084,483 |
UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Nine months ended | ||||||||
May 2, 2009 | April 26, 2008 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 43,647 | $ | 35,660 | ||||
Adjustments to reconcile net income to net cash provided by | ||||||||
(used in) operating activities: | ||||||||
Depreciation and amortization | 20,329 | 15,694 | ||||||
Share-based compensation | 4,607 | 3,503 | ||||||
Provision for doubtful accounts | 3,526 | 1,665 | ||||||
Loss on disposals of property and equipment | 290 | 8 | ||||||
Gain on forgiveness of loan | - | (157 | ) | |||||
Changes in assets and liabilities, net of acquisitions: | ||||||||
Accounts receivable | (20,760 | ) | (15,215 | ) | ||||
Inventories | (21,314 | ) | (77,007 | ) | ||||
Prepaid expenses and other assets | (1,002 | ) | (1,080 | ) | ||||
Notes receivable, trade | 369 | 69 | ||||||
Accounts payable | (1,195 | ) | 2,074 | |||||
Accrued expenses and other current liabilities | 12,194 | (1,663 | ) | |||||
Income taxes payable | - | 923 | ||||||
Net cash provided by (used in) operating activities | 40,691 | (35,526 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (25,421 | ) | (32,024 | ) | ||||
Purchases of acquired businesses, net of cash acquired | (4,468 | ) | (107,726 | ) | ||||
Net cash used in investing activities | (29,889 | ) | (139,750 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Net (repayments) borrowings under note payable | (39,477 | ) | 175,000 | |||||
Increase in bank overdraft | 17,152 | 9,482 | ||||||
Repayments of long-term debt | (3,726 | ) | (7,754 | ) | ||||
Payments on life insurance policy loans | (3,072 | ) | - | |||||
Capitalized debt issuance costs | (647 | ) | - | |||||
Proceeds from exercise of stock options | 188 | 848 | ||||||
Tax benefit from exercises of stock options | 133 | 171 | ||||||
Net cash (used in) provided by financing activities | (29,449 | ) | 177,747 | |||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (18,647 | ) | 2,471 | |||||
Cash and cash equivalents at beginning of period | 25,333 | 17,010 | ||||||
Cash and cash equivalents at end of period | $ | 6,686 | $ | 19,481 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Interest, net of amounts capitalized | $ | 7,713 | $ | 11,431 | ||||
Federal and state income taxes, net of refunds | $ | 29,734 | $ | 18,877 |