Earns $0.28 per Diluted Share
DAYVILLE, Conn., March 4 /PRNewswire-FirstCall/ -- United Natural Foods, Inc. (Nasdaq: UNFI) today reported net income of $5.4 million, or $0.28 per share on a diluted basis, excluding the effect of special items, for the second quarter of fiscal 2003, ended January 31, 2003. Net income for the second quarter of fiscal 2003, including the effect of special items, was $5.5 million, or $0.28 per share on a diluted basis.
Net sales, including acquisitions, for the second quarter of fiscal 2003 were $338.4 million, an increase of 18.6% from the $285.5 million recorded in the second quarter of fiscal 2002. This included growth in the mass market and independent distribution channels of approximately 30% and 28%, respectively. Sales in the supernatural distribution channel were unchanged compared to the same period last year due primarily to the previously announced transition of the Company's former second-largest customer to a new primary distributor. These results included a full quarter of net sales from the acquisition of Blooming Prairie and one month of net sales from Northeast Cooperatives acquired on December 31, 2002. Sales growth for the quarter, excluding the effect of acquisitions, was 2.3%. Sales growth excluding the effect of acquisitions and sales in each period to the Company's former second-largest customer was 17.4%.
Net income for the second quarter of fiscal 2003, excluding the effect of special items, increased 4.1% to $5.4 million, or $0.28 per diluted share, compared to $5.2 million, or $0.27 per diluted share, excluding special items, for the second quarter of fiscal 2002. The special items for the second quarter of fiscal 2003 consisted of non-cash income related to the change in fair value of interest rate swaps and related option agreements caused by favorable changes in yield curves. In addition, special items included labor costs related to the expansion of the Company's Chesterfield, New Hampshire distribution facility. Special items recorded during the second quarter of fiscal 2002 included non-cash income related to the change in fair value of interest rate swaps and related option agreements caused by favorable changes in yield curves. In addition, special items included restructuring, asset impairment and other costs related to the relocation of the Company's Atlanta, Georgia facility. Net income including special items increased 5.6% to $5.5 million, or $0.28 per diluted share, for the second quarter of 2003 compared to $5.2 million, or $0.27 per diluted share, in the same period last year.
Comments from Management
Steven Townsend, President and Chief Executive Officer of United Natural Foods, said, "Robust consumer demand for natural foods continues to drive the market and we believe that our continued success demonstrates that our operating strategies, designed to meet the long-term needs of customers while being their leading natural products resource, are working. Operationally, we continue to focus on the integration of our recent acquisitions, and have made significant progress on the expansion of our Chesterfield, New Hampshire distribution center to accommodate the Northeast Cooperatives business. Additionally, we are gaining efficiencies in our purchasing practices and operating expenses as we integrate Blooming Prairie into our Western region."
The Company believes that sales growth for the third quarter of fiscal 2003 will be in the 18% - 22% range. The Company expects sales growth in the mid-teens during the third quarter of fiscal 2003 for the business excluding the impact of its recent acquisitions and sales to the Company's former second-largest customer. The earnings per diluted share outlook for the quarter ending April 30, 2003 and the fiscal year ending July 31, 2003 is $0.30 - $0.32 and $1.18 - $1.20, respectively, consistent with previous guidance.
About United Natural Foods
United Natural Foods, Inc. carries and distributes over 30,500 products to more than 11,000 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 quarterly report on Form 10-Q filed with the Commission on December 13, 2002, 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.