Reports $0.27 Net Income Per Share Before Special Items
DAYVILLE, Conn., March 5 /PRNewswire-FirstCall/ -- United Natural Foods, Inc. (Nasdaq: UNFI) today announced that earnings for the second quarter of fiscal 2002, ending January 31, 2002, were in line with the guidance previously provided by the Company.
Net sales for the second quarter of fiscal 2002 totaled $285.5 million, a 16.8% increase over the $244.4 million reported in the second quarter of fiscal 2001, above the Company's guidance of 10 - 14% sales growth. This increase was primarily due to increased sales throughout all the Company's divisions and included double digit growth in the super natural, independent and mass market distribution channels. Sales in the second quarter included a full quarter of sales for Boulder Fruit Express, an organic produce and perishables distributor acquired by the Company in November 2001, and a full quarter of sales for a Florida retail store opened by the Company in October 2001. Sales growth excluding acquisition and new store sales would have been 15.3%. Net sales for the six months ended January 31, 2001 were $565.8 million, a 15.8% increase over the comparable prior year period.
Net income for the second quarter of fiscal 2002, excluding the effect of special items, was $5.2 million, or $0.27 per diluted share, compared to net income of $2.6 million, or $0.14 per diluted share for the second quarter of fiscal 2001. There were no special items recorded during the second quarter of fiscal 2001. The special items consisted of non-cash income of $1.4 million ($0.8 million, net of tax), or $0.04 per diluted share, related to the change in fair value of interest rate swaps and related option agreements, and restructuring, asset impairment and other costs of $(1.3) million ($(0.8) million, net of tax), or $(0.04) per diluted share, related to the relocation of our Atlanta facility. Net income including these items totaled $5.2 million, or $0.27 per diluted share.
The FAS 133 income of approximately $1.4 million ($0.8 million, net of tax), or $0.04 per diluted share, on interest rate swap agreements resulted from favorable changes in yield curves during the quarter. The Atlanta relocation costs of $(1.3) million ($(0.8) million, net of tax), or $(0.04) per diluted share, consisted of incremental and redundant costs incurred during the transition from the Company's former warehouse and outside storage facility into its new larger facility. A portion of these costs are reflected in "Restructuring and asset impairment" on the consolidated statements of income, with the remainder reflected as part of "Operating expenses." The Company adopted Statement of Financial Accounting Standards No. 142 (FAS No. 142), "Goodwill and Other Intangible Assets" on August 1, 2001. The result of adopting FAS No. 142 was a reduction in amortization of intangibles of approximately $0.2 million.
Comments from Management
Commenting on the second quarter results, Michael Funk, Chief Executive Officer, said, "We are extremely pleased by the strength of our 2002 second quarter operating results which we believe reflect the effectiveness of our business plan. During the quarter we achieved higher than expected sales as we achieved double-digit growth in both our eastern and western regions. Additionally, sales growth exceeded 25% in our supernatural distribution channel and approached 20% in our mass market distribution channel. Further, operating metrics continue to track at efficient levels with customer service rates continuing to perform at near optimum levels." Mr. Funk added, "Looking forward, we believe our sales growth for fiscal 2002 will continue in the 12% - 14% range. We are raising our net income expectations for fiscal 2002 to approximately $1.08 - $1.12 per diluted share and net income for the fiscal 2002 third quarter to be approximately $0.27 - $0.29 per diluted share. Our guidance for both fiscal 2002 and the third quarter excludes special income or charges for FAS 133 income or expense and relocation expenses related to the new distribution facilities in Atlanta and southern California."
Management will conduct a conference call and audio webcast at 11:00 a.m. ET on March 5, 2002 to review the Company's quarterly results, market trends and future outlook. The conference call dial-in number is 703-871-3795. The audio webcast will be available, on a listen only basis, via the Internet at http://www.viavid.com or at www.unfi.com . Please allow extra time prior to the webcast to visit the webcast site and download any software required 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 over 30,000 products to more than 7,000 customers nationwide. 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., 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-K filed with the Commission on October 23, 2001, 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 Foods, Inc. is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by applicable laws.