United Natural Foods Announces Third Quarter Results

DAYVILLE, Conn., May 31, 2005 /PRNewswire-FirstCall via COMTEX/ -- United Natural Foods, Inc. (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.

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.

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.

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 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.

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