United Natural Foods, Inc. (Nasdaq: UNFI) today announced that earnings for the third quarter of fiscal 2001, ending April 30, 2001, were in line with the Company’s recent guidance.
Net sales for the third quarter of fiscal 2001 totaled $258.5 million, a 12.8% increase over the $229.2 million reported in the third quarter of fiscal 2000, slightly above the Company’s guidance of 7 – 11% sales growth. This increase was primarily attributable to increased sales throughout all divisions and distribution channels including super naturals, independents and mass market. Net sales for the nine months ended April 30, 2001 were $747.1 million, a 10.0% increase over the $679.0 million reported in the comparable prior year period.
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Net income for the third quarter of fiscal 2001, excluding the effect of special charges, was $4.1 million, or $0.22 per diluted share. Special charges included $0.4 million, net of tax, of costs related to the expansion of the Company’s New Oxford, PA distribution facility, $0.2 million, net of tax, of Statement of Financial Accounting Standards No. 133 (FAS 133), “Accounting for Derivative Instruments and Hedging Activities” expense, and $0.2 million, net of tax, of asset impairment charges, primarily goodwill, associated with closing an unprofitable retail store. FAS 133 requires recognition in the financial statements of the change in fair value during the quarter of certain interest rate protection contracts and other derivatives. The Company recorded FAS 133 expense on its interest rate swap agreement resulting from the significant decline in interest rates during the quarter. Net income for the third quarter of fiscal 2000 was $2.0 million, or $0.11 per diluted share, excluding the impact of the closure of the Company’s Chicago facility of approximately $0.2 million, net of tax. Net income including special charges was $3.3 million, or $0.17 per diluted share, for the third quarter of 2001, and $1.8 million, or $0.10 per diluted share, for the third quarter of fiscal 2000.
Net income for the nine months ended April 30, 2001, excluding special charges, was $10.1 million, or $0.54 per diluted share. The special charges included those noted above in the third quarter of fiscal 2001 and approximately $0.1 million, net of tax, of moving costs recorded in the second quarter of fiscal 2001 related to the expansion of the Company’s New Oxford, PA distribution facility. The Company incurred a net loss per share of ($0.19) for the nine months ended April 30, 2000, excluding the impact of the closure of the Company’s Chicago facility. Net income including special charges was $9.2 million, or $0.49 per diluted share, for the nine months ended April 30, 2001. The Company incurred a net loss of ($0.21) per share, including special charges, for the comparable period in fiscal year 2000.
Commenting on the Company’s financial results, Michael Funk, United Natural Foods Chief Executive Officer, said, “It was a strong quarter for the Company as demonstrated by our solid growth in net sales, net income and net income per share. We continue to execute upon our business plan and we remain confident that United Natural Foods can continue this momentum through the 2001 fourth quarter and into fiscal 2002. Based on current market conditions we remain comfortable with our previous estimate of $0.22 – $0.25 per share for the 2001 fourth quarter. Looking forward we are currently estimating that top line growth, through fiscal 2002, will be 8% to 12% and are currently projecting net income for fiscal 2002 to be approximately $1.02 – $1.06 per share.”
About United Natural Foods
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By GlobalDataUnited Natural Foods, Inc. carries over 30,000 products to more than 7,000 customers in 50 states. The Company serves a wide variety of retail formats including conventional supermarket chains, natural product superstores and independent retail operators.
For more information on United Natural Foods, Inc., via fax at no charge, please dial 1-800-PRO-INFO and enter the Company’s ticker symbol, UNFI. Or, visit the Company’s web-site at www.unfi.com .
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding United Natural’s business which 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-Q filed with the Commission on December 15, 2000, 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. United Natural is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by applicable laws.
UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
QUARTER ENDED NINE MONTHS ENDED
APRIL 30, APRIL 30,
2001 2000 2001 2000
(In thousands, except
per share data)
Net sales $258,536 $ 229,205 $747,100 $ 679,035
Cost of sales 208,853 183,900 601,576 551,107
Gross profit 49,683 45,305 145,524 127,928
Operating expenses 41,182 40,561 123,337 126,736
Restructuring and asset
impairment charges 802 – 802 2,420
Amortization of
intangibles 269 278 793 828
Total operating
expenses 42,253 40,839 124,932 129,984
Operating income
(loss) 7,430 4,466 20,592 (2,056)
Other expense (income):
Interest expense 1,692 1,666 5,292 4,573
Other, net 268 (140) 43 (345)
Total other expense 1,960 1,526 5,335 4,228
Income (loss) before
income taxes
(benefit) 5,470 2,940 15,257 (6,284)
Income taxes (benefit) 2,188 1,175 6,103 (2,503)
Net income (loss) $3,282 $1,765 $9,154 $(3,781)
Per share data (basic):
Net income (loss) $0.18 $0.10 $0.50 $(0.21)
Weighted average basic
shares of common
stock 18,580 18,261 18,436 18,260
Per share data (diluted):
Net income (loss) $0.17 $0.10 $0.49 $(0.21)
Weighted average diluted
shares of common
stock 18,839 18,562 18,752 18,260
UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands) APRIL 30, APRIL 30,
2001 2000
ASSETS
Current assets:
Cash $7,829 $3,334
Accounts receivable, net 87,604 76,635
Notes receivable, trade 416 707
Inventories 113,200 101,919
Prepaid expenses 5,279 4,487
Deferred income taxes 2,917 2,406
Refundable income taxes 1,092 7,045
Total current assets 218,337 196,533
Property & equipment, net 62,094 47,952
Other assets:
Notes receivable, trade, net 1,029 257
Goodwill, net 27,736 26,835
Covenants not to compete, net 206 212
Other, net 730 539
Total assets $310,132 $272,328
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable – line of credit $67,054 $66,504
Current installments of long-term debt 2,949 2,240
Current installment of obligations under capital
leases 465 300
Accounts payable 66,791 48,102
Accrued expenses 14,906 13,052
Total current liabilities 152,165 130,198
Long-term debt, excluding current installments 25,140 23,906
Deferred income taxes 618 1,398
Obligations under capital leases, excluding
current installments 2,209 1,804
Total liabilities 180,132 157,306
Stockholders’ equity:
Preferred stock, $.01 par value, authorized
5,000 shares; none issued and outstanding
Common stock, $.01 par value, authorized
50,000 shares; issued and outstanding 18,584
at April 30, 2001; issued and outstanding
18,264 at April 30, 2000 186 183
Additional paid-in capital 70,945 67,839
Unallocated shares of ESOP (2,298) (2,462)
Retained earnings 61,167 49,462
Total stockholders’ equity 130,000 115,022
Total liabilities and stockholders’ equity $310,132 $272,328
UNITED NATURAL FOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
APRIL 30,
(In thousands) 2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $9,154 $(3,781)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 5,830 5,735
Loss on impairment of intangible asset 255 –
Loss on disposals of property & equipment 582 1,970
Deferred income tax (expense) benefit (316) 45
Provision for doubtful accounts 2,198 1,992
Changes in assets and liabilities,
net of acquired companies:
Accounts receivable (20,227) (18,015)
Inventory (8,265) (11,194)
Prepaid expenses 828 1,173
Refundable income taxes 3,308 (3,106)
Other assets 237 147
Notes receivable, trade (224) 465
Accounts payable 27,348 14,659
Accrued expenses 2,721 (653)
Net cash provided by (used in) operating
activities 23,429 (10,563)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchases of subsidiaries, net
of cash acquired (2,393) (1,200)
Proceeds from disposals of property and equipment 43 40
Capital expenditures (14,166) (10,644)
Net cash used in investing activities (16,516) (11,804)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under note payable (954) 25,350
Repayments on long-term debt (2,032) (3,172)
Proceeds from long-term debt 39 1,266
Principal payments of capital lease obligations (849) (688)
Proceeds from exercise of stock options 2,769 100
Net cash (used in) provided by financing
activities (1,027) 22,856
NET INCREASE IN CASH 5,886 489
Cash at beginning of period 1,943 2,845
Cash at end of period $7,829 $3,334
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $5,171 $4,080
Income taxes $3,100 $740
In the nine months ended April 30, 2001 and 2000, the Company incurred
$679 and $537, respectively, of capital lease obligations.
