DAYVILLE, Conn., June 4 /PRNewswire-FirstCall/ -- United Natural Foods, Inc. (Nasdaq: UNFI) today reported net income of $5.6 million for the third quarter of fiscal 2002, or $0.29 per share on a diluted basis, excluding special items, in line with the guidance previously provided by the Company.
Net sales for the third quarter of fiscal 2002 ending April 30, 2002 totaled $300.4 million, a 16.2% increase compared to $258.5 million reported in the third quarter of fiscal 2001. This increase was primarily due to increased sales throughout all the Company's divisions and included growth percentages in the mid-twenties in both the super natural and mass market distribution channels. Sales growth for the quarter, excluding acquisitions, was 14.8%. Net sales for the nine months ended April 30, 2002 were $866.1 million, a 15.9% increase compared to $747.1 million in the prior year period. The nine-month sales growth, excluding acquisitions, was 14.9%.
Net income for the third quarter of fiscal 2002, excluding the effect of special items, was $5.6 million, or $0.29 per diluted share, compared to $4.1 million, or $0.22 per diluted share, for the quarter ended April 30, 2001. Including the effect of special items, net income for the third quarter of fiscal 2002 was $5.3 million, or $0.27 per diluted share, compared to $3.3 million, or $0.17 per diluted share. The special items for the quarter ended April 30, 2002 consisted of moving and other costs related primarily to the startup of the Company's southern California distribution facility and non-cash income related to the change in fair value of interest rate swaps and related option agreements. Special items for the quarter ended April 30, 2001 consisted of asset impairment, moving and other costs related to the expansion of the Company's New Oxford, PA distribution facility, a non-cash expense related to the change in fair value of interest rate swaps and related option agreements, and asset impairment charges, primarily goodwill, associated with closing an unprofitable retail store.
The startup costs related to the Company's southern California distribution facility consisted of incremental costs such as labor, utilities and rent and are reflected on the consolidated statements of income as part of "Operating expenses." The income from the changes in fair value on interest rate swap agreements resulted from favorable changes in yield curves during the quarter. 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 goodwill of approximately $0.2 million in the third quarter of fiscal 2002.
Comments from Management
Commenting on the third quarter results, Michael Funk, Chief Executive Officer, said, "We are pleased to report another quarter of strong operating results and continue to be on track with executing our business plan and growth objectives. Each of our operating units contributed to our growth with sales growth percentages in our supernatural and mass market distribution channels in the mid-twenties as a result of our focus on customer service, expanding our customer base and increasing our penetration with existing accounts."
"To meet the growing consumer demand for natural foods and related products we continue to expand and enhance our distribution network and, during the quarter, we completed the startup of our new distribution center in southern California. The Fontana facility will enable us to provide enhanced service levels to our southwestern customers, realize transportation savings and efficiencies and allow us to penetrate that market further." Mr. Funk added, "Looking forward, we believe our sales growth for the fourth quarter of fiscal 2002 will continue in the 12% - 14% range. We expect net income, excluding special items, for the fiscal 2002 fourth quarter to be approximately $0.28 - $0.30 per diluted share. Our guidance excludes special income or charges related to interest rate swaps."
Management will conduct a conference call and audio webcast at 11:00 a.m. ET on June 4, 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 and at the Investor Relations section of the Company's website 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.
SOURCE United Natural Foods, Inc.