Meldungen 01.12.2005

1.12.2005: Meldung: United Natural Foods Q1 Results of Fiscal 2006

United Natural Foods, Inc. today reported net sales for the first quarter of fiscal 2006, ended October 29, 2005, of $575.6 million, an increase of $98.1 million, or 21%, from the $477.5 million recorded in the first quarter of fiscal 2005. Strong growth in all sales channels of the wholesale segment contributed to the record sales.


The Company reported net income of $10.3 million, or $0.24 per diluted share, excluding special items but including the impact of share-based compensation, for the first quarter of fiscal 2006. Net income for the first quarter of fiscal 2006, excluding the impact of the adoption of Statement of Financial Accounting Standard No. 123R, Share-Based Payment ("FAS 123R"), and special items, was $11.3 million, or $0.27 per diluted share. Net income for the first quarter of fiscal 2006, including the effect of special items and the adoption of FAS 123R, was $7.7 million, or $0.18 per diluted share. This compares with net income of $9.9 million, or $0.24 per diluted share, for the first quarter of fiscal 2005 ended October 31, 2004. There were no special items for the first quarter of fiscal 2005.


In December 2004, the Financial Accounting Standards Board finalized FAS 123R which requires all companies to expense share-based payments, including stock options, at fair value as of the beginning of the first annual reporting period that begins after June 15, 2005. As such, we began expensing stock options on August 1, 2005. Although we have adopted the modified prospective method allowed under FAS 123R, the charge to earnings during fiscal 2006 includes the impact of stock options granted in prior years, because the expense is recognized over the vesting period of the options, which has typically been four years. For the first quarter of fiscal 2006, share-based compensation, excluding special items of $1.0 million, negatively impacted earnings by $1.5 million before taxes, or $0.02 in earnings per diluted share.


For the first quarter of fiscal 2006 ended October 29, 2005, special items consisted of incremental and redundant costs incurred during the transition from our former warehouses and outside storage facility in Auburn, California into our new larger facility in Rocklin, California, certain incremental costs associated with the opening of our new Greenwood, Indiana facility and non- recurring cash and non-cash expenses incurred in accordance with the employment transition agreement we entered into during the quarter with Steven H. Townsend, our former President and Chief Executive Officer.


The following table details the non-GAAP measures for the first quarter of fiscal 2006:


Quarter Ended October 29, 2005 Pretax Per diluted

(in thousands, except per share data) Income Net of Tax share


Income, excluding special items and

share-based compensation: $18,160 $11,259 $0.27


Share-based compensation expense

(included in operating expenses) (1,514) (939) (0.02)


Income, excluding special items: $16,646 $10,320 $0.24*


Special items - (Expense)

Employment transition agreement costs

(included in operating expenses) (3,512) (2,177) (0.05)

Rocklin, CA facility relocation costs

(included in operating expenses) (672) (416) (0.01)

Greenwood, IN facility openings costs

(included in operating expenses) (92) (57) (0.00)


Income, including special items: $12,371* $7,670 $0.18


* Total reflects rounding.


All non-GAAP numbers have been adjusted to exclude special items. A reconciliation of specific adjustments to GAAP results for the quarter ended October 29, 2005 is included in the financial table shown above. A description of the Company"s use of non-GAAP information is provided under "Non-GAAP Results" below.


Comments from Management


"We are extremely pleased to start off fiscal 2006 with another strong quarter of financial results," said Michael Funk, Chief Executive Officer. "Reflecting the efforts of a well-focused team and the successful execution of our sales and operating strategies which have been designed to meet the growing demand across all of our served channels of business for natural and organic products, we realized record sales, and strong earnings per share."


Mr. Funk added, "We remain focused on providing superior service to our entire customer base and are pleased to report sales growth of 21% and comparable distribution sales growth of 18% excluding the acquisitions made during fiscal 2005. Fuel costs remained high in the quarter, negatively impacting our operating margins by 10 bps. Our service levels remain high and our business metrics are strong. We also successfully opened our new Rocklin, CA facility and closed two owned facilities in Northern California as well as a third off site storage facility."


Confirms Fiscal 2006 Earnings Guidance


The Company is confirming its guidance for fiscal 2006, ending July 29, 2006, with projected revenues remaining in the $2.25 to $2.35 billion range, and projected earnings per share, excluding special items but including the impact of share-based compensation, expected to be in a range of $1.03 - $1.08 per diluted share. In July 2005 the Company had announced earnings per share guidance, excluding special items and share-based compensation, from $1.14 - $1.19 per diluted share.


Historically, the Company has classified expenses related to distribution facility expansions and distribution facility relocations as special items. However, at this time the Company does not know the extent or significance of these items or whether the Company will in fact incur any additional special items in fiscal 2006. The Company"s guidance is based on a number of assumptions, which are subject to change and many of which are outside the control of the Company. If any of these assumptions vary, the Company"s guidance may change. There can be no assurance that the Company will achieve these results. A description of the Company"s use of non-GAAP information is provided under "Non-GAAP Results" below.


Conference Call


Management will conduct a conference call and audio webcast at 11:00 a.m. EST on November 29, 2005 to review the Company"s quarterly and annual results, market trends and future outlook. The conference call dial-in number is (303) 262-2141. The audio webcast will be available, on a listen only basis, via the Internet atwww.earnings.comor at the Investor Relations section of the Company"s website,www.unfi.com. Please allow extra time prior to the webcast to visit the 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 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 atwww.unfi.com.


For more information on United Natural Foods, Inc., visit the Company"s website atwww.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 annual report on Form 10-K filed with the Commission on October 13, 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 income and earnings per share adjusted to exclude special charges and/or share-based compensation. 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, while the measures excluding share- based compensation provide comparability to the prior fiscal year. 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.




(In thousands, except per share data)


Three months ended

October 29, October 31,

2005 2004


Net sales $575,641 $477,542


Cost of sales 465,374 385,099


Gross profit 110,267 92,443


Operating expenses (includes $2,535 and $0

of share-based compensation expense in 2005

and 2004, respectively) 95,513 74,597


Restructuring charge -- 170


Amortization of intangibles 145 141


Total operating expenses 95,658 74,908


Operating income 14,609 17,535


Other expense (income):

Interest expense 2,367 1,433

Other, net (129) (101)


Total other expense 2,238 1,332


Income before income taxes 12,371 16,203


Income taxes 4,701 6,319


Net income $7,670 $9,884


Per share data (basic):


Net income $0.19 $0.25


Weighted average basic shares of common stock 41,334 40,123


Per share data (diluted):


Net income $0.18 $0.24


Weighted average diluted shares of common stock 42,150 41,580





(In thousands)


October 29, July 31,

2005 2005



Current assets:

Cash and cash equivalents $9,906 $12,615

Accounts receivable, net 153,488 136,472

Notes receivable, trade, net 832 877

Inventories 270,449 235,700

Prepaid expenses and other current assets 10,023 9,811

Deferred income taxes 7,419 7,419

Total current assets 452,117 402,894


Property & equipment, net 171,971 167,909


Other assets:

Goodwill 74,552 73,808

Notes receivable, trade, net 2,093 1,802

Intangible assets, net 276 307

Other 5,277 4,538


Total assets $706,286 $651,258



Current liabilities:

Accounts payable $144,191 $119,177

Notes payable 138,975 123,574

Accrued expenses and other current liabilities 35,805 34,915

Current portion of long-term debt 5,657 5,843

Total current liabilities 324,628 283,509


Long-term debt, excluding current portion 63,907 64,852

Deferred income taxes 7,032 6,904

Other long-term liabilities 1,747 474

Total liabilities 397,314 355,739


Commitments and contingencies


Stockholders" equity:

Preferred stock, $0.01 par value,

authorized 5,000 shares

at October 29, 2005 and July 31, 2005,

respectively; none issued and outstanding - -

Common stock, $0.01 par value, authorized

50,000 shares; issued and outstanding 41,436

and 41,287 at October 29, 2005 and

July 31, 2005, respectively 414 413

Additional paid-in capital 125,885 120,354

Unallocated shares of ESOP (1,564) (1,605)

Accumulated other comprehensive income 210 -

Retained earnings 184,027 176,357

Total stockholders" equity 308,972 295,519


Total liabilities and stockholders" equity $706,286 $651,258





(In thousands)


Three months ended

October 29, October 31,

2005 2004


Net income $7,670 $9,884

Adjustments to reconcile net income to net cash

(used in) provided by operating activities:

Depreciation and amortization 3,754 3,092

(Gain) loss on disposals of property & equipment (9) 9

Provision for doubtful accounts 369 466

Share-based compensation 2,535 -

Changes in assets and liabilities, net of acquisitions:

Accounts receivable (17,510) (27,227)

Inventories (34,749) (18,084)

Prepaid expenses and other assets (625) (1,876)

Notes receivable, trade (246) (384)

Accounts payable 24,973 34,666

Accrued expenses and other current liabilities 2,189 (841)

Income taxes payable - 5,021

Tax effect of stock options - 74

Net cash (used in) provided by operating activities (11,649) 4,800



Capital expenditures (7,683) (3,590)

Payments for acquisitions, net of cash acquired (517) -

Proceeds from disposals of property and equipment 21 25

Net cash used in investing activities (8,179) (3,565)



Net borrowings (repayments) under note payable 15,401 (7,866)

Proceeds from exercise of stock options 1,713 205

Tax effect of stock options 1,284 -

Repayments on long-term debt (1,131) (1,292)

Principal payments of capital lease obligations (148) (162)

Net cash provided by (used in) financing activities 17,119 (9,115)



Cash and cash equivalents at beginning of period 12,615 13,633

Cash and cash equivalents at end of period $9,906 $5,753


Supplemental disclosures of cash flow information:

Cash paid during the period for:

Interest $2,561 $1,377

Income taxes, net of refunds $4,470 $1,166



Source: United Natural Foods, Inc.



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