Reports Record Sales of $449 Million in the Third Quarter of Fiscal 2004
DAYVILLE, Conn., June 1 /PRNewswire-FirstCall/ -- United Natural Foods, Inc. (NASDAQ:UNFI) today reported net income of $9.2 million for the third quarter of fiscal 2004, ended April 30, 2004, or $0.22 per share on a diluted basis, excluding special items. Net income for the third quarter of fiscal 2004, including special items, was $8.6 million, or $0.21 per share on a diluted basis.
Net sales for the third quarter of fiscal 2004 were $448.9 million, an increase of $85.3 million, or 23.5%, from the $363.6 million recorded in the third quarter of fiscal 2003. This increase included growth in the supernatural, conventional mass market and independent channels of 44%, 20% and 9%, respectively.
Net income for the third quarter of fiscal 2004, excluding the effect of special items, increased 48.7% to $9.2 million, or $0.22 per diluted share, compared to $6.2 million, or $0.16 per diluted share, excluding special items, for the quarter ended April 30, 2003. The special items for the third quarter of fiscal 2004 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. In the third quarter of 2003, a special non-cash expense item was recorded related to the change in fair value of certain interest rate swaps and the related option agreements, and certain costs relating to the expansion of the Chesterfield facility. Net income for the third quarter of fiscal 2004, including the effect of special items, increased 49.0% to $8.6 million, or $0.21 per diluted share, compared to $5.8 million, or $0.15 per diluted share, for the quarter ended April 30, 2003.
The non-cash item from the change in fair value on interest rate swap agreements was caused by unfavorable changes in interest rate yield curves during the quarter ended April 30, 2003. The costs related to the expansion of the Chesterfield facility were primarily labor related.
On March 17, 2004, the Company's Board of Directors approved a two-for-one split of the Company's common stock that was payable in the form of a stock dividend. Stockholders received one additional share of the Company's common stock for each share of common stock held on the record date of March 29, 2004. The split became effective on April 20, 2004. The applicable share and per-share data for all periods included herein have been restated to give effect to this stock split.
As previously reported, the Company entered into an amended and restated four-year $250 million revolving credit facility with a bank group that was led by Bank of America Business Capital (formerly Fleet Capital Corporation) as the administrative agent, effective April 30, 2004. The amended and restated credit facility provides for improved terms and conditions that provide the Company with more financial flexibility and reduced costs, as well as increased liquidity. The new credit facility replaces an existing $150 million revolving credit facility. The Company's outstanding commitments under the amended and restated credit facility as of April 30, 2004 were approximately $123 million.
Comments from Management
Commenting on the third quarter results, Steven Townsend, Chief Executive Officer, said, "We achieved another strong quarter of financial results reflecting the efforts of a well-focused team and the successful execution of our sales strategies designed to meet the growing demand for natural and organic products. Our results are highlighted by solid gains in net sales, net income and earnings per share, all indicators that our sales, marketing and operational plans are on target. We remain focused on serving a broad customer base and are pleased to realize sales growth of 23.5% and comparable sales growth of 15.1%, excluding sales to Wild Oats Markets. We remain committed to meeting the needs of all of our customers while consistently providing superior service levels across our entire distribution network."
Mr. Townsend added, "We are also very pleased with our continued progress to improve our operating margins. Excluding special items, our fiscal 2004 third quarter operating margin was 3.7%, up 40 basis points from the same period last year."
About United Natural Foods
United Natural Foods, Inc. carries and distributes over 35,000 products to more than 18,000 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/ .
"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 16, 2004, 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.