Exhibit 99.1
[LETTERHEAD OF UNITED NATURAL FOODS, INC.]
IMMEDIATE RELEASE
May 31, 2005
UNITED NATURAL FOODS ANNOUNCES A 19% INCREASE IN NET SALES AND
A 24% INCREASE IN NET INCOME
Reports Record Sales of $534.3 Million in the Third Quarter of Fiscal 2005
Raises Fiscal 2005 Revenue Guidance
Dayville, Connecticut - May 31, 2005 -- United Natural Foods, Inc. (Nasdaq:
UNFI) today reported net income of $10.8 million for the third quarter of fiscal
2005, ended April 30, 2005, or $0.26 per share on a diluted basis, excluding
special items. Net income for the third quarter of fiscal 2005, including
special items, was $10.7 million, or $0.26 per share on a diluted basis. The
recent acquisition of Select Nutrition Distributors (SND) had a minimal negative
impact on diluted earnings per share in the current quarter. Higher fuel costs
continued to negatively impact diluted earnings per share during the quarter by
$0.014 when compared to actual costs in the third quarter of fiscal 2004.
Net sales for the third quarter of fiscal 2005 were $534.3 million, an increase
of $85.4 million, or 19.0%, from the $448.9 million recorded in the third
quarter of fiscal 2004. On a comparable growth analysis, wholesale revenue
growth was 14.6% for the current quarter compared to last year.
Net income for the third quarter of fiscal 2005, excluding the effect of special
items, increased 16.7% to $10.8 million, or $0.26 per diluted share, compared to
$9.2 million, or $0.22 per diluted share, excluding special items, for the
quarter ended April 30, 2004. The special items for the third quarter of fiscal
2005 included certain labor costs associated with the closing of the Mounds
View, Minnesota facility which was completed in the third quarter of fiscal
2005. Special items in the third quarter of fiscal 2005 also included certain
labor costs associated with opening the Greenwood, Indiana facility which is
planned to be completed by the end of July 2005. In the third quarter of fiscal
2004, special items consisted of certain equipment rental and labor costs
recorded in the third quarter of fiscal 2004 for start-up and transition costs
associated with implementing the Company's primary distribution relationship
with Wild Oats Market, Inc. Net income for the third quarter of fiscal 2005,
including the effect of special items, increased 24.2% to $10.7 million, or
$0.26 per diluted share, compared to $8.6 million, or $0.21 per diluted share,
for the quarter ended April 30, 2004.
The following table details the amounts and effects of the special items for the
quarter ended April 30, 2005:
- --------------------------------------------------------------------------------
Quarter Ended April 30, 2005 Pretax Per diluted
(in thousands, except per share data) Income Net of Tax share
------ ---------- -----
Income, excluding special items: $ 17,489 $ 10,756 $ 0.26
Special items - Income/(Expense)
Related to the closing of the Mounds View,
Minnesota facility (included in operating
expenses) (103) (63) (0.00)
Related to the opening of the Greenwood,
Indiana facility (included in operating
expenses) (11) (7) (0.00)
- --------------------------------------------------------------------------------
Income, including special items: $ 17,375 $ 10,686 $ 0.26
================================================================================
The following table details the amounts and effects of the special item for
quarter ended April 30, 2004:
- --------------------------------------------------------------------------------
Quarter Ended April 30, 2004 Pretax Per diluted
(in thousands, except per share data) Income Net of Tax share
------ ---------- -----
Income, excluding special items: $ 15,115 $ 9,220 $ 0.22
Special item - Income/(Expense)
Wild Oats Markets, Inc. primary
distributorship transition related costs
(included in operating expenses) (1,010) (616) (0.01)
- --------------------------------------------------------------------------------
Income, including special items: $ 14,105 $ 8,604 $ 0.21
================================================================================
All non-GAAP numbers have been adjusted to exclude special charges. A
reconciliation of specific adjustments to GAAP results for the quarters ended
April 30, 2005, and April 30, 2004, is included in the financial tables shown
above. A description of the Company's use of non-GAAP information is provided
under "Non-GAAP Results" below.
Comments from Management
Steven Townsend, Chief Executive Officer, said, "We are pleased with our
continued strong performance highlighted by our success in meeting the growing
consumer demand for natural and organic foods. During the quarter, we realized
solid increases in net sales, net income and earnings per share which indicates
that our sales, marketing and operating strategies are on target. We remain
focused on serving a broad customer base and are pleased that we achieved strong
year over year growth in all channels. In addition, we continue to leverage our
expenses as we saw a 35 basis point improvement in our operating expenses."
"Looking ahead, we remain committed to meeting the needs of all our customers
while consistently providing high service levels across our entire distribution
network."
Raises Fiscal 2005 Revenue Guidance
The Company is raising its guidance for fiscal 2005, ending July 31, 2005, with
projected revenues increasing to $2.00 to $2.05 billion. Previously, the Company
had announced revenue guidance from $1.9 to $2.0 billion for the fiscal year.
Conference Call
Management will conduct a conference call and audio webcast at 11:00 a.m. EDT on
May 31, 2005 to review the Company's quarterly results, market trends and future
outlook. The conference call dial-in number is (303) 262-2131. The audio webcast
will be available, on a listen only basis, via the Internet at
http://www.fulldisclosure.com or at the Investor Relations section of the
Company's website, http://www.unfi.com. Please allow extra time prior to the
webcast to visit the site and download any software required to listen to the
Internet broadcast. The online archive of the webcast will be available for 30
days.
About United Natural Foods
United Natural Foods, Inc. carries and distributes more than 40,000 products to
more than 20,000 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. For more
information on United Natural Foods, Inc., visit the Company's website at
http://www.unfi.com.
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
- --------------------------------------------------------------------------------
Rick Puckett Joseph Calabrese
Chief Financial Officer General Information
(860) 779-2800 (212) 445-8434
"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
14, 2005, 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 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.
Non-GAAP Results: To supplement its financial statements presented on a basis of
generally accepted accounting principles in the United States of America (GAAP),
the Company uses non-GAAP additional measures of operating results, net earnings
and earnings per share adjusted to exclude special charges. The Company believes
that the use of these additional measures is appropriate to enhance an overall
understanding of its past financial performance and also its prospects for the
future as these special charges are not expected to be part of the Company's
ongoing business. The adjustments to the Company's GAAP results are made with
the intent of providing both management and investors with a more complete
understanding of the underlying operational results and trends and its
marketplace performance. For example, these adjusted non-GAAP results are among
the primary indicators management uses as a basis for its planning and
forecasting of future periods. The presentation of this additional information
is not meant to be considered in isolation or as a substitute for net earnings
or diluted earnings per share prepared in accordance with GAAP. A comparison and
reconciliation from non-GAAP to GAAP results is included in the tables within
this release.
UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
Three months ended Nine months ended
April 30, April 30,
------------------------- -----------------------------
2005 2004 2005 2004
--------- --------- ----------- -----------
Net sales $ 534,335 $ 448,900 $ 1,516,587 $ 1,223,530
Cost of sales 432,387 361,323 1,226,872 980,995
--------- --------- ----------- -----------
Gross profit 101,948 87,577 289,715 242,535
--------- --------- ----------- -----------
Operating expenses 82,655 71,388 235,828 199,706
Restructuring charge -- -- 170 --
Amortization of intangibles 177 676 490 1,142
--------- --------- ----------- -----------
Total operating expenses 82,832 72,064 236,488 200,848
--------- --------- ----------- -----------
Operating income 19,116 15,513 53,227 41,687
--------- --------- ----------- -----------
Other expense (income):
Interest expense 1,877 1,536 4,887 5,990
Change in fair value of financial instruments -- -- -- (704)
Other, net (136) (128) (359) (358)
--------- --------- ----------- -----------
Total other expense 1,741 1,408 4,528 4,928
--------- --------- ----------- -----------
Income before income taxes 17,375 14,105 48,699 36,759
Income taxes 6,689 5,501 18,906 14,336
--------- --------- ----------- -----------
Net income $ 10,686 $ 8,604 $ 29,793 $ 22,423
========= ========= =========== ===========
Per share data (basic):
Net income $ 0.26 $ 0.22 $ 0.74 $ 0.57
========= ========= =========== ===========
Weighted average basic shares of common stock 40,900 39,648 40,470 39,296
========= ========= =========== ===========
Per share data (diluted):
Net income $ 0.26 $ 0.21 $ 0.72 $ 0.55
========= ========= =========== ===========
Weighted average diluted shares of common stock 41,774 41,344 41,494 40,813
========= ========= =========== ===========
UNITED NATURAL FOODS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
April 30, July 31,
2005 2004
--------- ---------
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 8,197 $ 13,633
Accounts receivable, net 143,088 106,178
Notes receivable, trade, net 592 772
Inventories 228,746 196,171
Prepaid expenses 10,853 7,007
Deferred income taxes 8,117 7,610
--------- ---------
Total current assets 399,593 331,371
Property & equipment, net 146,460 114,140
Other assets:
Goodwill 64,744 57,242
Notes receivable, trade, net 2,181 1,601
Intangible assets, net 338 154
Other 5,770 4,259
--------- ---------
Total assets $ 619,086 $ 508,767
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Notes payable - line of credit $ 150,505 $ 107,004
Accounts payable 111,691 80,875
Accrued expenses and other current liabilities 26,399 29,501
Current portion of long-term debt 5,834 4,766
--------- ---------
Total current liabilities 294,429 222,146
Long-term debt, excluding current portion 37,319 43,978
Deferred income taxes 6,469 7,730
Other long-term liabilities 551 137
--------- ---------
Total liabilities 338,768 273,991
--------- ---------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, authorized 5,000
shares at April 30, 2005 and July 31, 2004,
respectively; none issued and outstanding -- --
Common stock, $0.01 par value, authorized 50,000
shares; issued and outstanding 41,029 and 40,118 at
April 30, 2005 and July 31, 2004, respectively 410 401
Additional paid-in capital 116,680 101,118
Unallocated shares of ESOP (1,646) (1,768)
Accumulated other comprehensive income 296 240
Retained earnings 164,578 134,785
--------- ---------
Total stockholders' equity 280,318 234,776
--------- ---------
Total liabilities and stockholders' equity $ 619,086 $ 508,767
========= =========
UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Nine months ended
April 30,
---------------------
2005 2004
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 29,793 $ 22,423
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 9,944 8,807
Change in fair value of financial instruments -- (704)
Gains on disposals of property & equipment (26) (61)
Provision for doubtful accounts 1,378 2,521
Changes in assets and liabilities, net of acquired companies:
Accounts receivable (34,541) (22,504)
Inventory (28,322) (45,345)
Prepaid expenses and other assets (5,157) 1,050
Notes receivable, trade (400) (1,108)
Accounts payable 25,947 29,344
Accrued expenses and other current liabilities (4,131) (907)
Financial instruments -- (5,400)
Tax benefit of stock options 7,167 3,870
-------- --------
Net cash provided by (used in) operating activities 1,652 (8,014)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (41,197) (18,989)
Purchases of acquired businesses, net of cash acquired (6,219) (6)
Proceeds from disposals of property and equipment 248 202
-------- --------
Net cash used in investing activities (47,168) (18,793)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under note payable 37,781 18,344
Proceeds from exercise of stock options 8,403 7,477
Repayments on long-term debt (5,591) (3,302)
Principal payments of capital lease obligations (513) (759)
Proceeds from issuance of long-term debt -- 10,204
-------- --------
Net cash provided by financing activities 40,080 31,964
-------- --------
NET (DECREASE) INCREASE IN CASH (5,436) 5,157
Cash and cash equivalents at beginning of period 13,633 3,645
-------- --------
Cash and cash equivalents at end of period $ 8,197 $ 8,802
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 4,903 $ 5,788
======== ========
Income taxes, net of refunds $ 14,107 $ 9,686
======== ========