DAYVILLE, Conn., Aug 31, 2005 /PRNewswire-FirstCall via COMTEX/ -- United Natural Foods, Inc. (UNFI) today reported net income of $11.6 million for the fourth quarter of fiscal 2005, ended July 31, 2005, or $0.28 per share on a diluted basis, excluding special items. Net income for the fourth quarter of fiscal 2005, including special items, was $11.8 million, or $0.28 per share on a diluted basis.
Net sales for the fourth quarter of fiscal 2005 were $543.0 million, an increase of $96.6 million, or 21.6%, from the $446.4 million recorded in the fourth quarter of fiscal 2004. On a comparable growth analysis, wholesale revenue growth was 19.3% for the current quarter compared to last year.
Net income for the fourth quarter of fiscal 2005, excluding the effect of special items, increased 21.6% to $11.6 million, or $0.28 per diluted share, compared to $9.6 million, or $0.23 per diluted share, excluding special items, for the quarter ended July 31, 2004. Net income for the fourth quarter of fiscal 2005, including the effect of special items, increased 23.2% to $11.8 million, or $0.28 per diluted share, compared to $9.6 million, or $0.23 per diluted share, for the quarter ended July 31, 2004. The special items for the fourth quarter of fiscal 2005 included certain costs associated with the opening of the Company's new Greenwood, Indiana facility and the closing of its Hawaii facility. In addition, the fourth quarter included other income related to the early termination of the interest rate swap agreement that was originally entered into in May 2003. There were no special items related to the fourth quarter of fiscal 2004.
During the fourth quarter of fiscal 2005, Select Nutrition Distributors, which was acquired in December 2004, and higher fuel costs both had a negative impact on diluted earnings per share. In addition, the Company has experienced higher than expected external costs associated with its compliance efforts under Section 404 of Sarbanes-Oxley.
Record Year End Results
Net income, excluding special items, for the year ended July 31, 2005 increased $9.2 million, or 28.3%, to $41.7 million, or $1.00 per diluted share, from $32.5 million, or $0.79 per diluted share, for the year ended July 31, 2004. Net income, including special items, was $41.6 million, or $1.00 per diluted share, compared to $32.0 million, or $0.78 per diluted share, for the year ended July 31, 2004.
Net sales for the year ended July 31, 2005 were $2.06 billion, an increase of 23.3%, or $389.6 million, over the $1.67 billion recorded in the year ended July 31, 2004. On a comparable growth analysis, wholesale division's revenue growth was 15.3% compared to last year.
Special items for fiscal 2005 included certain costs associated with closing the Mounds View, Minnesota and Hawaii facilities, and certain costs associated with opening the new Greenwood, Indiana facility. In addition, other income related to the early termination of the interest rate swap agreement, which was originally entered into in May 2003, was recorded in the fourth quarter. Special items for the fiscal year ended July 31, 2004 included non-cash income related to the change in fair value of interest rate swaps and related options agreements caused by favorable changes in yield curves as well as start-up and transition costs of the Wild Oats Markets, Inc. primary distributorship.
Comments from Management
"I am very pleased with our Company's financial and operating performance in fiscal 2005," commented Steven Townsend, Chairman and Chief Executive Officer. "These results reflect the success of our sales and marketing strategies which enabled us to achieve solid growth across our three primary distribution channels. We remain focused on serving a growing 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 57 basis point improvement in our operating expenses, in spite of the higher fuel costs and Sarbanes-Oxley compliance costs that have been experienced. Overall, we realized solid increases in net sales, net income and earnings per share, which further indicates that our operating strategies are on target. We were also able to strengthen our financial position and solidify our balance sheet. At the same time, we continued to strengthen our industry presence by entering new channels of business and fostering several new business relationships."
Mr. Townsend added, "As we look ahead, we are excited about our Company's prospects for fiscal 2006 and beyond. Our efforts remain focused on helping our customers be more successful in their marketplace while maintaining our position as America's premier certified organic distributor. To ensure that United Natural Foods is well positioned to capitalize on favorable growth opportunities in the natural and organic foods industry, we will continue to invest in our people, facilities, equipment and new technologies."
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 June 9, 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 generally accepted accounting principles ("GAAP") basis, 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 generally accepted accounting principles in the United States of America. A comparison and reconciliation from non-GAAP to GAAP results is included in the tables within this release.