Exhibit 99.1
[LETTERHEAD OF UNITED NATURAL FOODS, INC.]
IMMEDIATE RELEASE
November 20, 2007
UNITED NATURAL FOODS ANNOUNCES DILUTED EPS OF $0.32
AND REVENUES OF $736.4 MILLION ON 13.9% GROWTH FOR THE
FIRST QUARTER OF FISCAL 2008
Updates Fiscal 2008 Guidance to Reflect Projected Impact of
Millbrook Acquisition
Dayville, Connecticut - November 20, 2007 -- United Natural Foods, Inc. (Nasdaq:
UNFI) (the "Company") today reported net sales for the first quarter of fiscal
2008, ended October 27, 2007, of $736.4 million, an increase of $90.0 million,
or 13.9%, from the $646.4 million in net sales recorded in the first quarter of
fiscal 2007. The supernatural channel of the wholesale segment contributed to
the increase in net sales, showing a comparable growth rate of approximately
22%.
The Company reported net income of $13.6 million, or $0.32 per diluted share,
for the first quarter of fiscal 2008. Net income for the first quarter of fiscal
2007 was $12.4 million, or $0.29 per diluted share.
Gross margin was 18.4% for the first quarter of fiscal 2008, which represents a
72 basis point decline from the gross margin of 19.1% for the first quarter of
fiscal 2007. The decline in gross margin was due primarily to new customer
contracts combined with a shift in the mix of customer growth.
Operating expenses as a percentage of net sales during the first quarter of
fiscal 2008 decreased by 43 basis points to 15.1% of net sales, or $111.3
million, and were negatively impacted by $2.3 million in operating expenses
related to start-up activities at the Company's Sarasota, Florida and Portland,
Oregon area distribution facilities. The Sarasota, Florida facility commenced
shipments in September 2007, and the Portland, Oregon area facility is expected
to commence operations in early December 2007. For the quarter ended October 28,
2006, operating expenses were $100.4 million, or 15.5% of net sales.
In the quarter ended October 27, 2007, the Company recorded share-based
compensation expense of $1.0 million in accordance with Statement of Financial
Accounting Standard No. 123R, Share-Based Payment, which was consistent with the
same period in fiscal 2007.
The Company's results for the first quarter of fiscal 2008 do not reflect the
Company's recent acquisition of Millbrook Distribution Services, Inc.
("Millbrook"), which closed on November 2, 2007.
"We are pleased to announce that first quarter sales came in near the top end of
our 11% to 14% growth forecast and that operating results were solid despite
$2.3 million of start-up costs related to expansion of our distribution center
network" said Michael Funk, President and Chief Executive Officer. "With the
Sarasota, Florida facility now open, and the Portland, Oregon area facility
expected to open in early December, we look forward to realizing the
transportation savings and operational efficiencies expected to be provided by
these facilities in the second half of the fiscal year."
Mr. Funk added, "At this time, we continue to implement strategies designed to
grow and diversify our business and recently closed on the acquisition of
Millbrook. This opportunity is consistent with our long-term plans to expand our
presence in the Specialty Foods segment and enhance the breadth of our products,
resources and distribution network. We're excited to welcome Millbrook, its
customers and associates to our organization."
Updates Fiscal 2008 Guidance to Reflect Projected Impact of Millbrook
Acquisition
The Company is raising its net sales guidance for fiscal 2008, ending August 2,
2008, to reflect the recent acquisition of Millbrook, which closed on November
2, 2007. Fiscal 2008 projected revenues are expected to increase to $3.27 to
$3.35 billion, representing an increase of 19% to 22% over net sales in fiscal
2007. Previously, the Company had announced net sales guidance from $3.05 to
$3.13 billion, reflecting net sales growth of 11% to 14%. At this time, the
Company expects fiscal 2008 U.S. GAAP earnings per diluted share guidance to
remain in the range of $1.40 to $1.45 per share, an increase of 19% to 24% over
fiscal 2007. The Company expects the Millbrook acquisition to be dilutive by
approximately $0.04 in the second quarter of fiscal 2008, and neutral to
slightly accretive for the remainder of fiscal 2008.
The Company's guidance is based on a number of assumptions, which are subject to
change and many of which are outside the Company's control. If any of these
assumptions vary, the Company's guidance may change. There can be no assurance
that the Company will achieve these results.
Conference Call
Management will conduct a conference call and audio webcast at 11:00 a.m. EST on
November 20, 2007 to review the Company's quarterly results, market trends and
future outlook. The conference call dial-in number is (303) 262-2004. An audio
webcast of the conference call will be available to the public, on a listen-only
basis, via the Internet at www.earnings.com or at the Investor Relations section
of the Company's website at www.unfi.com. Please allow extra time prior to the
call to visit the site and download the necessary software 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 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," and ranked by Business Ethics as one of its "100 Best
Corporate Citizens for 2006."
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 annual report on Form 10-K filed with the Commission on September
26, 2007, 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.
UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
Quarters ended
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October 27, October 28,
2007 2006
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Net sales $ 736,389 $ 646,433
Cost of sales 600,918 522,861
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Gross profit 135,471 123,572
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Operating expenses 111,266 100,432
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Total operating expenses 111,266 100,432
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Operating income 24,205 23,140
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Other expense (income):
Interest expense 2,891 2,911
Interest income (179) (114)
Other, net 69 (28)
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Total other expense 2,781 2,769
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Income before income taxes 21,424 20,371
Provision for income taxes 7,863 7,945
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Net income $ 13,561 $ 12,426
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Basic per share data:
Net income $ 0.32 $ 0.29
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Weighted average basic shares of common stock 42,610 42,147
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Diluted per share data:
Net income $ 0.32 $ 0.29
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Weighted average diluted shares of common stock 42,829 42,599
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UNITED NATURAL FOODS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except per share data)
October 27, July 28,
2007 2007
----------- -----------
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 19,446 $ 17,010
Accounts receivable, net 174,021 160,329
Notes receivable, trade, net 6,965 1,836
Inventories 364,876 312,377
Prepaid expenses and other current assets 11,050 8,199
Assets held for sale 5,935 5,935
Deferred income taxes 9,474 9,474
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Total current assets 591,767 515,160
Property and equipment, net 193,195 185,083
Other assets:
Goodwill 79,903 79,903
Notes receivable, trade, net 2,129 2,647
Intangible assets, net 9,121 8,552
Other 8,649 9,553
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Total assets $ 884,764 $ 800,898
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LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable $ 152,500 $ 134,576
Notes payable 173,118 120,000
Accrued expenses and other current liabilities 37,511 37,132
Current portion of long-term debt 6,702 6,934
----------- -----------
Total current liabilities 369,831 298,642
Long-term debt, excluding current portion 63,458 65,067
Deferred income taxes 9,273 9,555
Other long-term liabilities 1,094 839
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Total liabilities 443,656 374,103
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Stockholders' equity:
Preferred stock, $0.01 par value, authorized 5,000 shares at
October 27, 2007 and July 28, 2007; none issued and outstanding -- --
Common stock, $0.01 par value, authorized 100,000 shares;
43,059 issued and 42,831 outstanding shares at October 27, 2007;
43,051 issued and 42,822 outstanding shares at July 28, 2007 431 431
Additional paid-in capital 164,649 163,473
Unallocated shares of Employee Stock Ownership Plan (1,162) (1,203)
Treasury stock (6,092) (6,092)
Accumulated other comprehensive (loss) income (66) 399
Retained earnings 283,348 269,787
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Total stockholders' equity 441,108 426,795
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Total liabilities and stockholders' equity $ 884,764 $ 800,898
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UNITED NATURAL FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Three months ended
--------------------------
October 27, October 28,
2007 2006
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 13,561 $ 12,426
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 4,678 4,555
Loss on disposals of property and equipment 8 5
Deferred income taxes (101) --
Provision for doubtful accounts 472 660
Share-based compensation 1,004 954
Gain on forgiveness of loan (157) --
Changes in assets and liabilities, net of acquisitions:
Accounts receivable (14,164) (17,450)
Inventories (52,246) (42,955)
Prepaid expenses and other assets (2,693) (6,585)
Notes receivable, trade 389 264
Accounts payable 29,828 30,729
Accrued expenses and other current liabilities 462 150
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Net cash used in operating activities (18,959) (17,247)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (12,623) (4,760)
Purchases of acquired businesses, net of cash acquired (686) (28)
Payment for loans receivable (5,000) --
Proceeds from disposals of property and equipment -- 19
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Net cash used in investing activities (18,309) (4,769)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under note payable 32,500 (7,006)
Increase in bank overdraft 8,714 5,816
Repayments of long-term debt (1,684) (1,458)
Proceeds from exercise of stock options 134 2,152
Tax benefit from exercises of stock options 40 874
Proceeds from issuance of long-term debt -- 10,000
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Net cash provided by financing activities 39,704 10,378
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,436 (11,638)
Cash and cash equivalents at beginning of period 17,010 20,054
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Cash and cash equivalents at end of period $ 19,446 $ 8,416
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Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest paid, net of amounts capitalized $ 2,779 $ 2,996
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Federal and state income taxes paid, net of refunds $ 7,956 $ 2,639
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