PROVIDENCE, R.I., June 6,
2018 /PRNewswire/ -- United Natural Foods, Inc. (Nasdaq: UNFI)
(the "Company" or "UNFI") today reported financial results for the
third quarter of fiscal 2018 ended April 28, 2018.
Third Quarter Fiscal 2018 Highlights
|
13-Week Period
Ended
|
|
|
($ in thousands,
except for per share data)
|
April 28,
2018
|
|
April 29,
2017
|
|
Change
|
Net
Sales
|
$
|
2,648,879
|
|
|
$
|
2,369,556
|
|
|
$
|
279,323
|
|
11.8
|
%
|
Operating
Income
|
$
|
82,157
|
|
|
$
|
64,946
|
|
|
$
|
17,211
|
|
26.5
|
%
|
Adjusted Operating
Income(1)
|
$
|
82,308
|
|
|
$
|
68,892
|
|
|
$
|
13,416
|
|
19.5
|
%
|
Net
Income
|
$
|
51,891
|
|
|
$
|
36,587
|
|
|
$
|
15,304
|
|
41.8
|
%
|
Adjusted
EBITDA(1)
|
$
|
104,041
|
|
|
$
|
90,364
|
|
|
$
|
13,677
|
|
15.1
|
%
|
Earnings Per
Diluted Share (EPS)
|
$
|
1.02
|
|
|
$
|
0.72
|
|
|
$
|
0.30
|
|
41.7
|
%
|
Adjusted
EPS(1)
|
$
|
1.04
|
|
|
$
|
0.77
|
|
|
$
|
0.27
|
|
35.1
|
%
|
(1)
|
Please refer to the
tables in this press release for a reconciliation of these non-GAAP
financial measures to the most directly comparable financial
measure calculated in accordance with GAAP.
|
"We delivered strong results for the quarter underscoring the
strength of our market position as we continue to grow amid
continuous change in the retail landscape. UNFI continues to be an
important connector between manufacturers, brick and mortar
retailers as well as eCommerce customers. We are pleased with the
continued momentum in our business and we continue to work to
balance and improve upon the challenges associated with this
higher-than-expected growth. Our outlook for the remainder of
fiscal 2018 has improved, as reflected in the revised guidance."
said Steven L. Spinner, Chairman and
Chief Executive Officer.
Third Quarter Fiscal 2018 Summary
Net sales for
the third quarter of fiscal 2018 increased 11.8%, or $279.3 million, to $2.65
billion from $2.37 billion in
the third quarter of fiscal 2017 due to continued increase in
demand for our products. Net sales by customer channel for the
third quarter of fiscal 2018 and growth over the comparable period
in fiscal 2017 were as follows (in millions):
|
|
|
|
13-Week Period
Ended
|
|
Customer
Channel
|
|
Y-o-Y
Growth
|
|
April 28,
2018
|
|
Supernatural
chains
|
|
24.3%
|
|
$
|
992
|
|
Independently owned
natural products retailers
|
|
6.1%
|
|
664
|
|
Conventional
supermarket
|
|
3.7%
|
|
718
|
|
Other
|
|
8.3%
|
|
275
|
|
Total
|
|
|
|
$
|
2,649
|
|
Gross margin for the third quarter of fiscal 2018 was
15.41%, reflecting a 5 basis point decrease over last fiscal year's
third quarter. This decrease was primarily driven by a shift in
customer mix where sales growth with lower margin customers
outpaced growth with other customers, coupled with an increase in
inbound freight costs. Gross margin for the third quarter
included the positive impact of a change in accounting estimate of
$20.9 million as the Company revised
its calculation for its accrual for inventory purchases. This
change of estimate was initiated based on higher-than-expected
business growth and enhancements in our shared services processes
and included an analysis of historical data. Substantially all of
this change is related to inventory purchases from the current
fiscal year and its impact is included in the consolidated results
described below for the quarter and fiscal year-to-date period.
Total operating expenses were $325.9 million, or 12.30% of net sales, for the
third quarter of fiscal 2018 compared to $301.4 million, or 12.72% of net sales, for the
third quarter of fiscal 2017. Total operating expenses in the third
quarter of fiscal 2018 included restructuring charges of
approximately $0.2 million, primarily
associated with the Company's previously announced fiscal 2017
restructuring plan. Total operating expenses in the third quarter
of fiscal 2017 included $3.9 million
of restructuring charges primarily related to severance and other
associate separation costs.
Adjusted operating expenses, which exclude restructuring
charges, were $325.8 million, or
12.30% of net sales, for the third quarter of fiscal 2018 compared
to adjusted operating expenses of $297.5
million, or 12.55% of net sales, for the third quarter of
fiscal 2017. The decrease in adjusted operating expenses as a
percentage of net sales was primarily driven by leveraging of fixed
costs, partially offset by increased labor costs associated with
higher than expected product demand.
Operating income increased $17.2
million, or 26.5%, to $82.2
million for the third quarter of fiscal 2018 compared to
$64.9 million for the third quarter
of fiscal 2017.
Adjusted operating income, which excludes restructuring
charges, was $82.3 million for the
third quarter of fiscal 2018, an increase of $13.4 million, or 19.5%, compared to adjusted
operating income of $68.9 million for
the third quarter of fiscal 2017.
Effective tax rate for the third quarter of fiscal 2018
decreased to 33.3% from 39.4% in the same period last fiscal year.
Excluding tax expense of $1.0 million
recorded in the third quarter of fiscal 2018 associated with the
remeasurement of U.S. net deferred tax liabilities resulting from
the Tax Cuts and Jobs Act of 2017 ("Tax Act"), the Company's
adjusted effective tax rate decreased to 32.0% for the third
quarter of fiscal 2018.
Net income for the third quarter of fiscal 2018 increased
$15.3 million, or 41.8%, to
$51.9 million, compared to
$36.6 million for the third quarter
of fiscal 2017.
Adjusted EBITDA for the third quarter of fiscal 2018
was $104.0 million, an increase of
15.1% compared to adjusted EBITDA of $90.4
million for the third quarter of fiscal 2017.
EPS increased $0.30 to
$1.02 for the third quarter of fiscal
2018 compared to $0.72 for the third
quarter of fiscal 2017.
Adjusted EPS increased $0.27, or 35.1%, to $1.04 for the third quarter of fiscal 2018
compared to adjusted EPS of $0.77 for
the third quarter of fiscal 2017.
Fiscal 2018 Year to Date Summary
Net sales for
the 39-week period ended April 28,
2018 ("fiscal year-to-date") totaled $7.63 billion, a 10.1% increase over the
comparable prior fiscal year period. Net sales by customer channel
for the fiscal year-to-date period and the growth over the
comparable prior year period were as follows (in millions):
|
|
|
|
39-Week Period
Ended
|
|
Customer
Channel
|
|
Y-o-Y
Growth
|
|
April 28,
2018
|
|
Supernatural
chains
|
|
19.4%
|
|
$
|
2,776
|
|
Independently owned
natural products retailers
|
|
6.1%
|
|
1,922
|
|
Conventional
supermarket
|
|
4.9%
|
|
2,150
|
|
Other
|
|
5.2%
|
|
787
|
|
Total
|
|
|
|
$
|
7,634
|
*
|
|
* Reflects
rounding
|
|
|
|
Gross margin for the fiscal year-to-date period decreased
27 basis points to 15.02% compared to 15.29% for the prior fiscal
year period. This decrease was primarily driven by a shift in
customer mix where sales growth with lower margin customers
outpaced growth with other customers coupled with an increase in
inbound freight costs.
Total operating expenses for the fiscal year-to-date
period increased $73.6 million, to
$969.4 million, or 12.70% of net
sales, compared to $895.8 million, or
12.92% of net of sales, for the prior fiscal year period. Total
operating expenses for the fiscal year-to-date period included
$11.4 million of restructuring and
impairment expenses, primarily related to the Company's Earth
Origins Market retail business. Total operating expenses for the
comparable prior fiscal year period included $3.9 million of restructuring charges, primarily
related to the Company's fiscal 2017 restructuring program.
Adjusted operating expenses, which exclude restructuring
and impairment charges noted above, were $958.0 million, or 12.55% of net sales, for the
fiscal year-to-date period compared to adjusted operating expenses
of $891.8 million, or 12.86% of net
sales, for the prior fiscal year period.
Operating income for the fiscal year-to-date period
increased $12.9 million, or 7.8%, to
$177.5 million, compared to
$164.6 million the prior fiscal year
period.
Adjusted operating income, excluding restructuring and
impairment expenses noted above, for the fiscal year-to-date period
increased 12.1% to $188.9 million
compared to adjusted operating income of $168.5 million for the prior fiscal year
period.
Effective tax rate for the fiscal year-to-date period
decreased to 20.3% from 39.5% in the same period last fiscal year.
Excluding the provisional one-time net tax benefit of $20.9 million recorded in fiscal 2018 associated
with the remeasurement of U.S. net deferred tax liabilities
resulting from the Tax Act, the Company's adjusted effective tax
rate decreased to 32.8% for the fiscal year-to-date period.
Net income for the fiscal year-to-date period increased
$41.6 million, or 45.6%, to
$132.9 million, compared to
$91.3 million for the same period
last fiscal year.
Adjusted EBITDA for the fiscal year-to-date period
was $254.8 million, an increase of
9.6% compared to adjusted EBITDA of $232.4
million in the same period last fiscal year.
EPS for the fiscal year-to-date period increased
$0.81 to $2.61 compared to
$1.80 in the same period last fiscal
year.
Adjusted EPS increased $0.50, or 27.0% to $2.35 for the fiscal year-to-date period compared
to adjusted EPS of $1.85 in the same
period last fiscal year.
Cash Flow Generation, Balance Sheet and Repurchase
Program
|
13-Week Period
Ended
|
|
|
|
39-Week Period
Ended
|
|
|
(in
thousands)
|
April 28,
2018
|
|
April 29,
2017
|
|
Change
|
|
April 28,
2018
|
|
April 29,
2017
|
|
Change
|
Cash Flow from
Operations
|
$
|
(20,047)
|
|
|
$
|
66,188
|
|
|
|
|
$
|
(55,166)
|
|
|
$
|
163,097
|
|
|
|
Less: Capital
Expenditures
|
14,111
|
|
|
17,330
|
|
|
|
|
29,646
|
|
|
40,004
|
|
|
|
Free Cash
Flow
|
$
|
(34,158)
|
|
|
$
|
48,858
|
|
|
$
|
(83,016)
|
|
|
$
|
(84,812)
|
|
|
$
|
123,093
|
|
|
$
|
(207,905)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's liquidity position remains strong with
availability of $528.5 million as of
April 28, 2018, under its revolving
credit facility.
Pursuant to the authorized share repurchase program of
$200 million announced October 6, 2017, for the fiscal year-to-date
period, the Company purchased 564,660 shares of its common stock at
an aggregate cost of $22.2
million.
Fiscal 2018 Guidance
Based on UNFI's performance to
date and the outlook for the remainder of fiscal 2018, the Company
is updating its guidance for fiscal year 2018.
|
|
Current
Guidance
|
|
Previous
Guidance
|
Fiscal Year (FY)
Ending July 28, 2018
|
|
FY
2018
|
|
Y-o-Y
Growth
|
|
FY
2018
|
|
Y-o-Y
Growth
|
Net Sales ($ in
billions)
|
|
$10.23 -
$10.28
|
|
10.3% -
10.8%
|
|
$10.01 -
$10.16
|
|
8.0% -
9.5%
|
EPS
|
|
$3.39 -
$3.44
|
|
32.2% -
34.2%
|
|
$3.27 -
$3.35
|
|
27.7% -
30.9%
|
Adjusted
EPS(1)
|
|
$3.18 -
$3.23
|
|
23.6% -
25.6%
|
|
$3.06 -
$3.14
|
|
19.5% -
22.7%
|
Effective Tax
Rate
|
|
23.8% -
24.1%
|
|
|
|
23.8% -
24.3%
|
|
|
Adjusted Effective
Tax Rate(1)
|
|
32.1% -
32.4%
|
|
|
|
33.0% -
33.3%
|
|
|
Capital Expenditures
as a % of Net
Sales
|
|
0.6% -
0.7%
|
|
|
|
0.6% -
0.7%
|
|
|
- Adjusted EPS excludes the restructuring and impairment charges
and the estimated impact of the one-time tax benefit related to the
remeasurement of U.S. net deferred tax liabilities resulting from
the Tax Act.
- Adjusted Effective Tax Rate excludes the impact of the
estimated benefit related to the remeasurement of net deferred tax
liabilities as a result of the Tax Act.
Conference Call & Webcast
The Company's third
quarter fiscal 2018 conference call and audio webcast will be held
today, Wednesday, June 6, 2018 at 5:00 p.m. EDT. The webcast of the conference call
will be available to the public, on a listen-only basis, via the
Internet at the Investors section of the Company's website at
www.unfi.com. The online archive of the webcast will be available
on the Company's website for 120 days.
About United Natural Foods
UNFI delivers healthier
food options to people throughout the
United States and Canada.
UNFI distributes over 110,000 products to more than 43,000 customer
locations including natural product superstores, independent
retailers, conventional supermarket chains, eCommerce retailers,
and food service customers. Recognized as one of the most
effectively managed U.S. companies, UNFI was named in the
"Management Top 250" list by the Wall Street Journal in 2017. To
learn more about how UNFI is Moving Food Forward, visit
www.unfi.com.
|
INVESTOR
CONTACT:
|
|
|
|
Faten
Freiha
|
|
|
|
Director, Investor
Relations and Corporate Strategy
|
|
|
|
401-528-8634
|
|
|
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
and are based on current expectations and management estimates;
actual results may differ materially. The risks and uncertainties
which could impact these statements are described in the Company's
filings under the Securities Exchange Act of 1934, as amended,
including its annual report on Form 10-K filed with the Securities
and Exchange Commission (the "SEC") on September 26, 2017 and its quarterly reports on
Form 10-Q filed with the SEC on December 7,
2017 and March 8, 2018, and
other filings the Company makes with the SEC, and include, but are
not limited to, the Company's dependence on principal customers;
the Company's sensitivity to general economic conditions, including
the current economic environment; changes in disposable income
levels and consumer spending trends; the Company's ability to
reduce its expenses in amounts sufficient to offset its increased
sales to its single supernatural chain customer and conventional
supermarkets and supermarket chains and the resulting lower gross
margins on those sales; the Company's reliance on the continued
growth in sales of natural and organic foods and non-food products
in comparison to conventional products; increased competition in
the Company's industry as a result of increased distribution of
natural, organic and specialty products by conventional grocery
distributors and direct distribution of those products by large
retailers and online distributors; the Company's ability to timely
and successfully deploy its warehouse management system throughout
its distribution centers and its transportation management system
across the Company and to achieve the efficiencies and cost savings
from these efforts; the addition or loss of significant customers
or material changes to the Company's relationships with these
customers; volatility in fuel costs; volatility in foreign exchange
rates; the Company's sensitivity to inflationary and deflationary
pressures; the relatively low margins and economic sensitivity of
the Company's business; the potential for disruptions in the
Company's supply chain by circumstances beyond its control; the
risk of interruption of supplies due to lack of long-term
contracts, severe weather, work stoppages or otherwise; consumer
demand for natural and organic products outpacing suppliers'
ability to produce those products and challenges the Company may
experience in obtaining sufficient amounts of products to meet the
Company's customers' demands; moderated supplier promotional
activity, including decreased forward buying opportunities;
union-organizing activities that could cause labor relations
difficulties and increased costs; the ability to identify and
successfully complete acquisitions of other natural, organic and
specialty food and non-food products distributors; management's
allocation of capital and the timing of capital expenditures; the
Company's ability to realize the anticipated benefits from its
decision to close certain of its Earth Origins Market ("Earth
Origins") stores and for the restructuring costs related to Earth
Origins to be within the Company's current estimates; the
possibility that the Company may recognize restructuring charges
with respect to its Earth Origins business in excess of those
estimated for the remainder of fiscal 2018; and changes in
interpretations, assumptions, and expectations regarding the Tax
Cuts and Jobs Act, including additional guidance that may be issued
by federal and state taxing authorities. 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 estimates of future results of
operations are based on a number of assumptions, many of which are
outside the Company's control and should not be construed in any
manner as a guarantee that such results will in fact occur. These
estimates are subject to change and could differ materially from
final reported results. The Company may from time to time update
these publicly announced estimates, but it is not obligated to do
so.
Non-GAAP Financial Measures: To supplement the financial
information presented on a generally accepted accounting principles
("GAAP") basis, the Company has included in this press release
non-GAAP financial measures for adjusted operating expenses,
adjusted operating income, adjusted EBITDA, adjusted earnings per
diluted common share, adjusted effective tax rate, and free cash
flow. The Company has also included in this press release non-GAAP
financial measures for estimated adjusted earnings per diluted
common share and adjusted effective income tax rate for the fiscal
year ending July 28, 2018. The
non-GAAP measures adjusted operating expenses, adjusted operating
income, adjusted earnings per diluted share and estimated adjusted
earnings per diluted share all exclude restructuring and asset
impairment expenses. Adjusted earnings per diluted common share and
estimated adjusted earnings per diluted common share also exclude a
net tax benefit related to tax reform. The non-GAAP measure
adjusted EBITDA excludes depreciation, amortization, other expense
and income, net, income taxes, and restructuring and asset
impairment expenses. The non-GAAP measures adjusted effective tax
rate and estimated adjusted effective tax rate exclude a net tax
benefit related to tax reform. The non-GAAP measure estimated
adjusted effective tax rate also excludes restructuring and asset
impairment expenses. Free cash flow is cash flows from operating
activities less capital expenditures. The reconciliation of these
non-GAAP financial measures to their comparable GAAP financial
measures are presented in the tables appearing below. The
presentation of non-GAAP financial measures is not intended to be
considered in isolation or as a substitute for any measure prepared
in accordance with GAAP. The Company believes that presenting
non-GAAP financial measures aids in making period-to-period
comparisons and is a meaningful indication of its actual and
estimated operating performance. The Company's management utilizes
and plans to utilize this non-GAAP financial information to compare
the Company's operating performance during the 2018 fiscal year to
the comparable periods in the 2017 fiscal year and to internally
prepared projections.
UNITED NATURAL
FOODS, INC. CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (unaudited) (In thousands, except for per share
data)
|
|
|
|
13-Week Period
Ended
|
|
39-Week Period
Ended
|
|
|
April 28,
2018
|
|
April 29,
2017
|
|
April 28,
2018
|
|
April 29,
2017
|
Net sales
|
|
$
|
2,648,879
|
|
|
$
|
2,369,556
|
|
|
$
|
7,634,435
|
|
|
$
|
6,933,438
|
|
Cost of
sales
|
|
2,240,792
|
|
|
2,003,195
|
|
|
6,487,610
|
|
|
5,873,116
|
|
Gross
profit
|
|
408,087
|
|
|
366,361
|
|
|
1,146,825
|
|
|
1,060,322
|
|
Operating
expenses
|
|
325,779
|
|
|
297,469
|
|
|
957,964
|
|
|
891,820
|
|
Restructuring and
asset impairment expenses
|
|
151
|
|
|
3,946
|
|
|
11,393
|
|
|
3,946
|
|
Total operating
expenses
|
|
325,930
|
|
|
301,415
|
|
|
969,357
|
|
|
895,766
|
|
Operating
income
|
|
82,157
|
|
|
64,946
|
|
|
177,468
|
|
|
164,556
|
|
Other expense
(income):
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
4,468
|
|
|
4,225
|
|
|
12,368
|
|
|
13,188
|
|
Interest
income
|
|
(121)
|
|
|
(82)
|
|
|
(308)
|
|
|
(278)
|
|
Other expense
(income), net
|
|
(24)
|
|
|
478
|
|
|
(1,305)
|
|
|
760
|
|
Total other expense,
net
|
|
4,323
|
|
|
4,621
|
|
|
10,755
|
|
|
13,670
|
|
Income before income
taxes
|
|
77,834
|
|
|
60,325
|
|
|
166,713
|
|
|
150,886
|
|
Provision for income
taxes
|
|
25,943
|
|
|
23,738
|
|
|
33,831
|
|
|
59,600
|
|
Net income
|
|
$
|
51,891
|
|
|
$
|
36,587
|
|
|
$
|
132,882
|
|
|
$
|
91,286
|
|
Basic per share
data:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1.03
|
|
|
$
|
0.72
|
|
|
$
|
2.63
|
|
|
$
|
1.81
|
|
Weighted average
basic shares of common stock
outstanding
|
|
50,424
|
|
|
50,601
|
|
|
50,563
|
|
|
50,554
|
|
Diluted per share
data:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1.02
|
|
|
$
|
0.72
|
|
|
$
|
2.61
|
|
|
$
|
1.80
|
|
Weighted average
diluted shares of common stock
outstanding
|
|
50,751
|
|
|
50,801
|
|
|
50,816
|
|
|
50,718
|
|
UNITED NATURAL
FOODS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) (In thousands, except for per share
data)
|
|
|
|
April 28,
2018
|
|
July 29,
2017
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
21,758
|
|
|
$
|
15,414
|
|
Accounts receivable,
net
|
|
635,190
|
|
|
525,636
|
|
Inventories
|
|
1,195,860
|
|
|
1,031,690
|
|
Deferred income
taxes
|
|
—
|
|
|
40,635
|
|
Prepaid expenses and
other current assets
|
|
41,953
|
|
|
49,295
|
|
Total current
assets
|
|
1,894,761
|
|
|
1,662,670
|
|
Property &
equipment, net
|
|
574,197
|
|
|
602,090
|
|
Goodwill
|
|
362,916
|
|
|
371,259
|
|
Intangible assets,
net
|
|
196,979
|
|
|
208,289
|
|
Other
assets
|
|
49,993
|
|
|
42,255
|
|
Total
assets
|
|
$
|
3,078,846
|
|
|
$
|
2,886,563
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
543,631
|
|
|
$
|
534,616
|
|
Accrued expenses and
other current liabilities
|
|
176,127
|
|
|
157,243
|
|
Current portion of
long-term debt
|
|
12,423
|
|
|
12,128
|
|
Total current
liabilities
|
|
732,181
|
|
|
703,987
|
|
Notes
payable
|
|
329,000
|
|
|
223,612
|
|
Deferred income
taxes
|
|
37,348
|
|
|
98,833
|
|
Other long-term
liabilities
|
|
27,274
|
|
|
28,347
|
|
Long-term debt,
excluding current portion
|
|
140,740
|
|
|
149,863
|
|
Total
liabilities
|
|
1,266,543
|
|
|
1,204,642
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred stock,
$0.01 par value, authorized 5,000 shares; none issued or
outstanding
|
|
—
|
|
|
—
|
|
Common stock, par
value $0.01 per share, authorized 100,000 shares; 51,006 shares
issued
and 50,441 shares outstanding at April 28, 2018, 50,622 shares
issued and outstanding at
July 29, 2017
|
|
510
|
|
|
506
|
|
Additional paid-in
capital
|
|
479,220
|
|
|
460,011
|
|
Treasury stock at
cost
|
|
(22,237)
|
|
|
—
|
|
Accumulated other
comprehensive loss
|
|
(12,634)
|
|
|
(13,963)
|
|
Retained
earnings
|
|
1,367,444
|
|
|
1,235,367
|
|
Total stockholders'
equity
|
|
1,812,303
|
|
|
1,681,921
|
|
Total liabilities and
stockholders' equity
|
|
$
|
3,078,846
|
|
|
$
|
2,886,563
|
|
UNITED NATURAL
FOODS, INC. CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (unaudited) (In thousands)
|
|
|
|
39-Week Period
Ended
|
|
|
April 28,
2018
|
|
April 29,
2017
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net income
|
|
$
|
132,882
|
|
|
$
|
91,286
|
|
Adjustments to
reconcile net income to net cash (used in) provided by
operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
65,982
|
|
|
63,930
|
|
Share-based
compensation
|
|
21,712
|
|
|
18,702
|
|
Loss on disposals of
property and equipment
|
|
111
|
|
|
825
|
|
Gain associated with
disposal of investments
|
|
(699)
|
|
|
—
|
|
Excess tax deficit
from share-based payment arrangements
|
|
—
|
|
|
1,403
|
|
Restructuring and
asset impairment
|
|
3,370
|
|
|
711
|
|
Goodwill
impairment
|
|
7,872
|
|
|
—
|
|
Deferred income
taxes
|
|
(21,866)
|
|
|
(160)
|
|
Change in accounting
estimate
|
|
(20,909)
|
|
|
—
|
|
Provision for
doubtful accounts
|
|
8,805
|
|
|
4,847
|
|
Non-cash interest
expense
|
|
594
|
|
|
79
|
|
Changes in assets and
liabilities, net of acquired businesses:
|
|
|
|
|
Accounts
receivable
|
|
(119,149)
|
|
|
(61,820)
|
|
Inventories
|
|
(165,049)
|
|
|
(19,758)
|
|
Prepaid expenses and
other assets
|
|
10,317
|
|
|
(9,135)
|
|
Accounts
payable
|
|
6,396
|
|
|
79,023
|
|
Accrued expenses and
other liabilities
|
|
14,465
|
|
|
(6,836)
|
|
Net cash (used in)
provided by operating activities
|
|
(55,166)
|
|
|
163,097
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Capital
expenditures
|
|
(29,646)
|
|
|
(40,004)
|
|
Purchase of
businesses, net of cash acquired
|
|
(29)
|
|
|
(9,198)
|
|
Proceeds from
disposals of property and equipment
|
|
47
|
|
|
34
|
|
Proceeds from
disposal of investments
|
|
756
|
|
|
—
|
|
Long-term
investment
|
|
(3,397)
|
|
|
(2,000)
|
|
Net cash used in
investing activities
|
|
(32,269)
|
|
|
(51,168)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Repayments of
long-term debt
|
|
(9,043)
|
|
|
(8,531)
|
|
Repurchase of common
stock
|
|
(22,237)
|
|
|
—
|
|
Proceeds from
borrowings under revolving credit line
|
|
500,061
|
|
|
154,412
|
|
Repayments of
borrowings under revolving credit line
|
|
(394,671)
|
|
|
(276,443)
|
|
Increase in bank
overdraft
|
|
23,890
|
|
|
19,075
|
|
Proceeds from
exercise of stock options
|
|
602
|
|
|
165
|
|
Payment of employee
restricted stock tax withholdings
|
|
(4,522)
|
|
|
(1,295)
|
|
Excess tax deficit
from share-based payment arrangements
|
|
—
|
|
|
(1,403)
|
|
Capitalized debt
issuance costs
|
|
—
|
|
|
(180)
|
|
Net cash provided by
(used in) financing activities
|
|
94,080
|
|
|
(114,200)
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
|
(301)
|
|
|
(203)
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
6,344
|
|
|
(2,474)
|
|
Cash and cash
equivalents at beginning of period
|
|
15,414
|
|
|
18,593
|
|
Cash and cash
equivalents at end of period
|
|
$
|
21,758
|
|
|
$
|
16,119
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
Cash paid for
interest
|
|
$
|
12,368
|
|
|
$
|
13,188
|
|
Cash paid for federal
and state income taxes, net of refunds
|
|
$
|
45,021
|
|
|
$
|
58,199
|
|
UNITED NATURAL
FOODS, INC.
|
Reconciliation of
Operating Expenses and Operating Expenses as a Percentage of Net
Sales to Adjusted Operating Expenses and Adjusted Operating
Expenses as a Percentage of Net Sales (unaudited)
|
(in thousands,
except percentages)
|
|
|
|
|
|
|
|
|
|
13-Week Period
Ended
|
|
|
|
39-Week Period
Ended
|
|
|
|
April 28,
2018
|
|
April 29,
2017
|
|
Change
|
|
April 28,
2018
|
|
April 29,
2017
|
|
Change
|
Net Sales
|
$
|
2,648,879
|
|
|
$
|
2,369,556
|
|
|
11.8
|
%
|
|
$
|
7,634,435
|
|
|
$
|
6,933,438
|
|
|
10.1
|
%
|
Total operating
expenses
|
$
|
325,930
|
|
|
$
|
301,415
|
|
|
8.1
|
%
|
|
$
|
969,357
|
|
|
$
|
895,766
|
|
|
8.2
|
%
|
Restructuring and
asset impairment
expenses
|
151
|
|
|
3,946
|
|
|
|
|
11,393
|
|
|
3,946
|
|
|
|
Adjusted total
operating expenses
|
$
|
325,779
|
|
|
$
|
297,469
|
|
|
9.5
|
%
|
|
$
|
957,964
|
|
|
$
|
891,820
|
|
|
7.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses as a
percentage of net sales
|
12.30
|
%
|
|
12.72
|
%
|
|
|
|
12.70
|
%
|
|
12.92
|
%
|
|
|
Adjusted total
operating expenses as a
percentage of net sales
|
12.30
|
%
|
|
12.55
|
%
|
|
|
|
12.55
|
%
|
|
12.86
|
%
|
|
|
Reconciliation of
Operating Income to Adjusted Operating Income
(unaudited)
|
(in thousands,
except percentages)
|
|
|
|
|
|
|
|
|
|
13-Week Period
Ended
|
|
|
|
39-Week Period
Ended
|
|
|
|
April 28,
2018
|
|
April 29,
2017
|
|
Change
|
|
April 28,
2018
|
|
April 29,
2017
|
|
Change
|
Operating
income
|
$
|
82,157
|
|
|
$
|
64,946
|
|
|
26.5
|
%
|
|
$
|
177,468
|
|
|
$
|
164,556
|
|
|
7.8
|
%
|
Restructuring and
asset impairment
expenses
|
151
|
|
|
3,946
|
|
|
|
|
11,393
|
|
|
3,946
|
|
|
|
Adjusted operating
income
|
$
|
82,308
|
|
|
$
|
68,892
|
|
|
19.5
|
%
|
|
$
|
188,861
|
|
|
$
|
168,502
|
|
|
12.1
|
%
|
Reconciliation of
Net Income to Adjusted EBITDA (unaudited)
|
(in thousands,
except percentages)
|
|
|
|
|
|
|
|
|
|
13-Week Period
Ended
|
|
|
|
39-Week Period
Ended
|
|
|
|
April 28,
2018
|
|
April 29,
2017
|
|
Change
|
|
April 28,
2018
|
|
April 29,
2017
|
|
Change
|
Net income
|
$
|
51,891
|
|
|
$
|
36,587
|
|
|
41.8
|
%
|
|
$
|
132,882
|
|
|
$
|
91,286
|
|
|
45.6
|
%
|
Depreciation and
amortization
|
21,733
|
|
|
21,472
|
|
|
|
|
65,982
|
|
|
63,930
|
|
|
|
Total other expense,
net
|
4,323
|
|
|
4,621
|
|
|
|
|
10,755
|
|
|
13,670
|
|
|
|
Provision for income
taxes
|
25,943
|
|
|
23,738
|
|
|
|
|
33,831
|
|
|
59,600
|
|
|
|
Restructuring and
asset impairment
expenses
|
151
|
|
|
3,946
|
|
|
|
|
11,393
|
|
|
3,946
|
|
|
|
Adjusted
EBITDA
|
$
|
104,041
|
|
|
$
|
90,364
|
|
|
15.1
|
%
|
|
$
|
254,843
|
|
|
$
|
232,432
|
|
|
9.6
|
%
|
UNITED NATURAL
FOODS, INC.
|
|
|
Reconciliation of
GAAP Earnings per Diluted Common Share to Adjusted Earnings per
Diluted Common Share
(unaudited)
|
|
|
13-Week Period
Ended
|
|
39-Week Period
Ended
|
|
April 28,
2018
|
|
April 29,
2017
|
|
April 28,
2018
|
|
April 29,
2017
|
GAAP earnings per
diluted common share
|
$
|
1.02
|
|
|
$
|
0.72
|
|
|
$
|
2.61
|
|
|
$
|
1.80
|
|
Restructuring and
asset impairment expenses (1)
|
—
|
|
|
0.08
|
|
|
0.22
|
|
|
0.08
|
|
Tax impact of
adjustments (2)
|
—
|
|
|
(0.03)
|
|
|
(0.07)
|
|
|
(0.03)
|
|
Net tax expense
(benefit) related to U.S. Tax Reform (3)
|
0.02
|
|
|
—
|
|
|
(0.41)
|
|
|
—
|
|
Adjusted earnings per
diluted common share
|
$
|
1.04
|
|
|
$
|
0.77
|
|
|
$
|
2.35
|
|
|
$
|
1.85
|
|
|
(1)
|
Represents
restructuring and impairment charges recorded related to the
Company's Earth Origins Market retail business during fiscal 2018
and severance and other employee separation costs recorded during
fiscal 2017.
|
(2)
|
Represents the tax
effect of the restructuring and impairment adjustments recorded
using the blended rate for the reporting period.
|
(3)
|
Represents the
earnings per share impact of $1.0 million of tax expense and a
$20.9 million benefit for the third quarter and year-to-date
periods end April 28, 2018, respectively, related to the
remeasurement of net deferred tax liabilities as a result of U.S.
tax reform enacted in December 2017.
|
Reconciliation of
GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate
(unaudited)
|
(in thousands,
except percentages)
|
|
|
April 28,
2018
|
|
13-Week Period
Ended
|
|
39-Week Period
Ended
|
Income before income
taxes
|
$
|
77,834
|
|
|
|
$
|
166,713
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
25,943
|
|
33.3
|
%
|
|
33,831
|
|
20.3
|
%
|
Net tax (expense)
benefit related to U.S. Tax Reform (1)
|
(1,008)
|
|
(1.3)
|
%
|
|
20,883
|
|
12.5
|
%
|
Adjusted provision
for income taxes
|
$
|
24,935
|
|
32.0
|
%
|
|
$
|
54,714
|
|
32.8
|
%
|
(1)
|
Represents the impact
of $1.0 million of tax expense and a $20.9 million benefit for the
third quarter and year-to-date periods ended April 28, 2018,
respectively, related to the remeasurement of net deferred tax
liabilities as a result of U.S. tax reform enacted in December
2017.
|
UNITED NATURAL
FOODS, INC. Reconciliation of 2018 Guidance for Estimated
GAAP Diluted Earnings per Common Share to Estimated
Non-GAAP Adjusted Diluted Earnings per Common Share
(unaudited)
|
|
|
Fiscal Year Ending
July 28, 2018
|
|
|
Low
Range
|
|
High
Range
|
|
GAAP diluted earnings
per common share
|
$
|
3.39
|
|
|
$
|
3.44
|
|
|
Restructuring and
asset impairment expenses (1)
|
0.25
|
|
|
0.25
|
|
|
Tax impact of
adjustments (2)
|
(0.08)
|
|
|
(0.08)
|
|
|
Net tax benefit
related to U.S. Tax Reform (3)
|
(0.38)
|
|
|
(0.38)
|
|
|
Non-GAAP adjusted
diluted earnings per common share
|
$
|
3.18
|
|
|
$
|
3.23
|
|
|
|
|
|
|
|
(1)
|
Represents total
estimated fiscal 2018 restructuring and impairment charges related
to the Company's Earth Origins Market retail business which
includes additional restructuring charges primarily related to
future exit costs of approximately $1.4 million expected to be
incurred during the fourth quarter of fiscal 2018.
|
(2)
|
Represents the tax
effect of the total estimated fiscal 2018 restructuring and
impairment charges related to the Company's Earth Origins Market
retail business using the estimated rate for the reporting
period.
|
(3)
|
Represents the impact
of the estimated benefit related to the remeasurement of net
deferred tax liabilities as a result of U.S. tax reform enacted in
December 2017.
|
Reconciliation of
2018 Guidance for Estimated GAAP Effective Tax Rate to Estimated
Non-GAAP Effective Tax
Rate (unaudited)
|
|
|
|
|
|
Fiscal Year Ending
July 28, 2018
|
|
|
Low
Range
|
|
High
Range
|
|
Estimated GAAP
Effective Tax Rate
|
23.8
|
%
|
|
24.1
|
%
|
|
Net tax benefit
related to U.S. Tax Reform (1)
|
8.3
|
%
|
|
8.3
|
%
|
|
Adjusted Estimated
GAAP Effective Tax Rate
|
32.1
|
%
|
|
32.4
|
%
|
|
|
|
|
|
|
(1)
|
Represents the impact
of the estimated benefit related to the remeasurement of net
deferred tax liabilities as a result of U.S. tax reform enacted in
December 2017.
|
View original
content:http://www.prnewswire.com/news-releases/united-natural-foods-inc-reports-third-quarter-fiscal-2018-results-300661170.html
SOURCE United Natural Foods, Inc.