PROVIDENCE, R.I., June 5,
2019 /PRNewswire/ -- United Natural Foods, Inc. (NYSE: UNFI) (the
"Company" or "UNFI") today reported financial results for the third
quarter of fiscal 2019 ended April 27, 2019.
Third Quarter Fiscal 2019 Highlights
- Net Sales Increased to $5.96
Billion, Including $3.24
Billion from SUPERVALU
- Earnings Per Diluted Share (EPS) of $1.12; Adjusted EPS of $0.61
- Integration of SUPERVALU Progressing; UNFI Now Operating As
One Company with A National Leadership Team and Structure
|
13-Week Period
Ended
|
($ in thousands,
except per share data)
|
April 27,
2019
|
|
April 28,
2018
|
|
Change
|
Net
Sales
|
$
|
5,962,620
|
|
$
|
2,648,879
|
|
$
|
3,313,741
|
Net
Income
|
$
|
57,092
|
|
$
|
51,891
|
|
$
|
5,201
|
Adjusted
EBITDA(1)
|
$
|
168,175
|
|
$
|
111,907
|
|
$
|
56,268
|
Earnings Per
Diluted Share (EPS)
|
$
|
1.12
|
|
$
|
1.02
|
|
$
|
0.10
|
Adjusted
EPS(1)
|
$
|
0.61
|
|
$
|
1.04
|
|
$
|
(0.43)
|
|
|
(1)
|
Please refer to the
tables in this press release for a reconciliation of non-GAAP
financial measures to the most directly comparable financial
measure calculated in accordance with GAAP.
|
"Our transformational journey continues, and I'm proud of what
our team has accomplished this quarter," said Steven L. Spinner, Chairman and Chief Executive
Officer. "I am excited about our next chapter and the acceleration
of value creation we expect to realize from the scale, services,
and assortment that only UNFI can deliver."
Third Quarter Fiscal 2019 Summary
Net sales from continuing operations by customer
channel for the third quarter of fiscal 2019 compared to the third
quarter of fiscal 2018 were as follows ($ in millions):
|
|
|
|
|
|
13-Week Period
Ended
|
Customer Channel
(1)
|
|
Total %
Growth
|
|
Legacy UNFI
% Growth
|
|
April 27,
2019
|
|
April 28,
2018
|
Supernatural
|
|
11.1%
|
|
11.1%
|
|
$
|
1,102
|
|
$
|
992
|
Independents
|
|
20.2%
|
|
2.5%
|
|
829
|
|
689
|
Supermarkets
|
|
420.6%
|
|
(1.8)%
|
|
3,675
|
|
706
|
Other
|
|
36.5%
|
|
(15.3)%
|
|
357
|
|
262
|
Total
|
|
125.1%
|
|
2.8%
|
|
$
|
5,963
|
|
$
|
2,649
|
|
(1)
|
During the second
quarter of fiscal 2019, the presentation of net sales by customer
channel was adjusted to reflect changes in the classification of
customer types as a result of a detailed review of customer channel
definitions. There was no impact to the Condensed Consolidated
Statements of Income as a result of revising the classification of
customer types. As a result of this adjustment, net sales to our
supermarkets channel and to our other channel for the third quarter
of fiscal 2018 decreased approximately $12 million and $13 million,
respectively, compared to the previously reported amounts, while
net sales to the independents channel for the third quarter of
fiscal 2018 increased approximately $25 million compared to the
previously reported amounts.
|
Gross margin for the third quarter of fiscal 2019
was 13.22% of net sales compared to 15.41% of net sales for the
third quarter of fiscal 2018. The largest driver of the
decline in the gross margin rate was the addition of SUPERVALU at a
lower gross profit rate. In addition, last year's gross
margin rate included the positive impact of a change in estimate of
$20.9 million, which resulted from
the Company having revised its calculation for its accrual for
inventory purchases.
Operating expenses in the third quarter of fiscal
2019 were $737.7 million, or 12.37%
of net sales, compared to $325.8
million, or 12.30% of net sales for the third quarter of
fiscal 2018. The increase in operating expenses, as a percent
of net sales, was driven by higher depreciation and amortization
expense resulting from the SUPERVALU acquisition partially offset
by the benefit of cost synergies.
Goodwill and asset impairment benefit was
$38.3 million in the third quarter of
fiscal 2019, resulting from adjustments to the purchase price
allocation undertaken in the third quarter related to the net
assets acquired in the SUPERVALU acquisition. The fiscal 2019
year-to-date goodwill impairment charge of $332.6 million, reflects the preliminary goodwill
impairment charge of $370.9 million
and the favorable adjustment to the charge of $38.3 million described above. The goodwill
impairment charge and related purchase price allocations for the
SUPERVALU acquisition are subject to change during the measurement
period (up to one year from the acquisition date).
Restructuring, acquisition, and integration related
expenses in the third quarter of fiscal 2019 were
$19.4 million including
employee-related costs and charges due to severance, settlement of
outstanding equity awards and benefits costs and certain charges
related to the divestiture of retail banners.
Operating income was $69.7
million in the third quarter of fiscal 2019 reflecting a
benefit from the goodwill impairment charge adjustment of
$38.3 million and restructuring,
acquisition, and integration related expenses of $19.4 million. When excluding these items,
operating income was $50.9 million,
or 0.85% of net sales, in the third quarter of fiscal 2019.
Operating income in the third quarter of fiscal 2018 was
$82.2 million, or 3.10% of net sales,
and included restructuring charges of $0.2
million. When excluding these charges, operating
income for the third quarter of fiscal 2018 was $82.3 million, or 3.11% of net sales. The
decrease in adjusted operating income, as a percent of net sales,
was driven by lower gross margins, as a percent of net sales, and
higher operating expenses, including depreciation and amortization
expense resulting from the SUPERVALU acquisition, as a percent of
net sales.
Adjusted EBITDA for the third quarter of fiscal 2019 was
$168.2 million compared to
$111.9 million for the third quarter
of fiscal 2018. The increase was predominantly driven by the
addition of SUPERVALU.
Interest expense, net for the third quarter of
fiscal 2019 was $54.9 million and
included expense of $0.4 million for
unamortized debt issuance costs and original issue discount related
to term loan prepayments made in the quarter with asset sale
proceeds. When excluding these amounts, interest expense, net was
$54.5 million compared to
$4.3 million for the third quarter of
fiscal 2018. The increase in interest expense, net was driven
by the SUPERVALU acquisition financing.
Effective tax rate for continuing operations for the
third quarter of fiscal 2019 was (32.4)% compared to 33.3% for the
third quarter of fiscal 2018. The third quarter of fiscal
2019 effective tax rate reflects a tax benefit based on
consolidated pre-tax income from continuing operations, while the
third quarter of fiscal 2018 effective tax rate reflects tax
expense on consolidated pre-tax income from continuing operations.
The change in the effective tax rate for the quarter was primarily
driven by purchase accounting adjustments that impacted the
goodwill impairment charge recorded in the quarter.
Net income for the third quarter of fiscal 2019 was
$57.1 million, including $24.4 million of income related to discontinued
operations, compared to $51.9 million
for the third quarter of fiscal 2018. The increase in
net income was primarily the result of the benefit from the
goodwill impairment charge adjustment and the contribution from
SUPERVALU, partially offset by increased interest expense, and
restructuring, acquisition, and integration related expenses.
Earnings Per Diluted Share (EPS) was $1.12 for the third quarter of fiscal 2019
compared to $1.02 for the third
quarter of fiscal 2018. Adjusted EPS was $0.61 for the third quarter of fiscal 2019
compared to adjusted EPS of $1.04 in
the third quarter of fiscal 2018, reflecting higher interest
expense and lower operating income, offset in part by net income
from discontinued operations.
Debt reduction during the third quarter (compared to
the second quarter) was $21 million
and was the result of the application of cash from operations and
the proceeds from asset sales net of capital expenditures.
Fiscal 2019 Guidance
UNFI is updating fiscal 2019
Earnings Per Share guidance to a range of $(5.85) to $(5.65). This reflects the $38.3 million benefit from the goodwill
impairment charge adjustment; $10
million in expected higher restructuring, acquisition, and
integration related expenses; and adjusted EBITDA tracking closer
to the low end of the range provided on March 5, 2019.
Conference Call and Webcast
The Company's third
quarter fiscal 2019 conference call and audio webcast will be held
today, Wednesday, June 5, 2019 at 5:00 p.m. ET. A webcast of the conference
call (and supplemental materials) will be available to the public,
on a listen only basis, via the internet at the Investors section
of the Company's website www.unfi.com. An online archive of
the webcast (and supplemental materials) will be available for 120
days.
About United Natural Foods
(NOTE: On October 22, 2018,
UNFI completed the acquisition of SUPERVALU INC. For more
information on the acquisition, please visit
www.bettertogether.unfi.com.)
UNFI is North America's premier
food wholesaler delivering the widest variety of products to
customer locations throughout North
America including natural product superstores, independent
retailers, conventional supermarket chains, ecommerce retailers,
and food service customers. By providing this deeper
'full-store' selection and compelling brands for every aisle, UNFI
is uniquely positioned to deliver great food, more choices, and
fresh thinking to customers everywhere. Combined with SUPERVALU,
UNFI is the largest publicly-traded grocery distributor in America
with expected annual sales of over $21
billion. To learn more about how UNFI is Moving Food
Forward, visit www.unfi.com.
INVESTOR CONTACT:
Steve Bloomquist
Vice President, Investor Relations
952-828-4144
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 quarterly report on Form 10-Q for the period ended
October 27, 2018 filed with the
Securities and Exchange Commission (the "SEC") on December 6, 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 changes in
disposable income levels and consumer spending trends; the
Company's ability to realize anticipated benefits of its
acquisitions and dispositions, in particular, its acquisition of
SUPERVALU; the possibility that restructuring, asset impairment,
and other charges and costs we may incur in connection with the
sale or closure of SUPERVALU's retail operations will exceed
current estimates; the potential for additional goodwill impairment
charges as a result of purchase accounting adjustments or
otherwise; the Company's reliance on the continued growth in sales
of higher margin natural and organic foods and non-food products in
comparison to lower margin conventional grocery 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; increased
competition as a result of continuing consolidation of retailers in
the natural product industry and the growth of supernatural chains;
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 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; moderated supplier promotional
activity, including decreased forward buying opportunities;
union-organizing activities that could cause labor relations
difficulties and increased costs; and the ability to identify and
successfully complete acquisitions of other natural, organic and
specialty food and non-food products distributors. 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 U.S. generally accepted accounting
principles ("GAAP") basis, the Company has included in this press
release non-GAAP financial measures for adjusted EBITDA and
adjusted earnings per diluted common share. The measure adjusted
earnings per diluted common share excludes goodwill and asset
impairment charges, restructuring, acquisition, and integration
related expenses, loss on debt extinguishment and interest on
SUPERVALU's senior notes during their mandatory redemption period,
inventory fair value adjustment expense related to the acquisition
of SUPERVALU, tax benefit related to U.S. tax reform enacted in
December 2017, a legal reserve
adjustment, discontinued operations store closures and other
charges, net and the tax impact of adjustments. The non-GAAP
measure adjusted EBITDA excludes total other expense, net,
(benefit) provision for income taxes, depreciation and
amortization, share-based compensation, goodwill and asset
impairment charges, restructuring, acquisition and integration
related expenses, inventory fair value adjustment related to the
acquisition of SUPERVALU, discontinued operations store closures
and other charges, net and a legal reserve adjustment.
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, assessing the underlying
operating performance of the Company and understanding core
business trends, and is a meaningful indication of its actual and
estimated operating performance. The Company currently expects to
continue to exclude the items listed above from non-GAAP financial
measures and may also exclude other items that may arise.
Management utilizes and plans to utilize these non-GAAP financial
measures to compare the Company's operating performance during the
2019 fiscal year to the comparable periods in the 2018 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 27,
2019
|
|
April 28,
2018
|
|
April 27,
2019
|
|
April 28,
2018
|
Net sales
|
|
$
|
5,962,620
|
|
$
|
2,648,879
|
|
$
|
14,979,982
|
|
$
|
7,634,435
|
Cost of
sales
|
|
5,174,070
|
|
2,240,792
|
|
13,017,318
|
|
6,487,610
|
Gross
profit
|
|
788,550
|
|
408,087
|
|
1,962,664
|
|
1,146,825
|
Operating
expenses
|
|
737,681
|
|
325,779
|
|
1,852,768
|
|
957,964
|
Goodwill and asset
impairment (adjustment) charges
|
|
(38,250)
|
|
ā
|
|
332,621
|
|
11,242
|
Restructuring,
acquisition, and integration related expenses
|
|
19,438
|
|
151
|
|
134,567
|
|
151
|
Operating income
(loss)
|
|
69,681
|
|
82,157
|
|
(357,292)
|
|
177,468
|
Other expense
(income):
|
|
|
|
|
|
|
Net periodic benefit
income, excluding service cost
|
|
(10,941)
|
|
ā
|
|
(22,691)
|
|
ā
|
Interest expense,
net
|
|
54,917
|
|
4,347
|
|
121,149
|
|
12,060
|
Other, net
|
|
958
|
|
(24)
|
|
231
|
|
(1,305)
|
Total other expense,
net
|
|
44,934
|
|
4,323
|
|
98,689
|
|
10,755
|
Income (loss) from
continuing operations before income
taxes
|
|
24,747
|
|
77,834
|
|
(455,981)
|
|
166,713
|
(Benefit) provision
for income taxes
|
|
(8,027)
|
|
25,943
|
|
(104,091)
|
|
33,831
|
Net income (loss)
from continuing operations
|
|
32,774
|
|
51,891
|
|
(351,890)
|
|
132,882
|
Income from
discontinued operations, net of tax
|
|
24,370
|
|
ā
|
|
47,847
|
|
ā
|
Net income (loss)
including noncontrolling interests
|
|
57,144
|
|
51,891
|
|
(304,043)
|
|
132,882
|
Less net (income)
loss attributable to noncontrolling
interests
|
|
(52)
|
|
ā
|
|
116
|
|
ā
|
Net income (loss)
attributable to United Natural Foods, Inc.
|
|
$
|
57,092
|
|
$
|
51,891
|
|
$
|
(303,927)
|
|
$
|
132,882
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.64
|
|
$
|
1.03
|
|
$
|
(6.93)
|
|
$
|
2.63
|
Discontinued
operations
|
|
0.48
|
|
ā
|
|
$
|
0.95
|
|
$
|
ā
|
Basic income (loss)
per share
|
|
$
|
1.12
|
|
$
|
1.03
|
|
$
|
(5.99)
|
|
$
|
2.63
|
Diluted earnings per
share:
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.64
|
|
$
|
1.02
|
|
$
|
(6.93)
|
|
$
|
2.61
|
Discontinued
operations
|
|
0.48
|
|
ā
|
|
0.94
|
|
$
|
ā
|
Diluted income (loss)
per share
|
|
$
|
1.12
|
|
$
|
1.02
|
|
$
|
(5.99)
|
|
$
|
2.61
|
Weighted average
share outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
50,846
|
|
50,424
|
|
50,748
|
|
50,563
|
Diluted
|
|
50,964
|
|
50,751
|
|
50,748
|
|
50,816
|
UNITED NATURAL
FOODS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
(In thousands,
except for per share data)
|
|
|
|
|
April 27,
2019
|
|
July 28,
2018
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
37,861
|
|
$
|
23,315
|
Accounts receivable,
net
|
|
1,049,273
|
|
579,702
|
Inventories
|
|
2,214,950
|
|
1,135,775
|
Prepaid expenses and
other current assets
|
|
185,498
|
|
50,122
|
Current assets of
discontinued operations
|
|
147,521
|
|
ā
|
Total current
assets
|
|
3,635,103
|
|
1,788,914
|
Property and
equipment, net
|
|
1,648,156
|
|
571,146
|
Goodwill
|
|
471,843
|
|
362,495
|
Intangible assets,
net
|
|
1,071,898
|
|
193,209
|
Other
assets
|
|
107,078
|
|
48,708
|
Long-term assets of
discontinued operations
|
|
393,143
|
|
ā
|
Total
assets
|
|
$
|
7,327,221
|
|
$
|
2,964,472
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Accounts
payable
|
|
$
|
1,472,250
|
|
$
|
517,125
|
Accrued expenses and
other current liabilities
|
|
227,356
|
|
103,526
|
Accrued compensation
and benefits
|
|
152,757
|
|
66,132
|
Current portion of
long-term debt and capital lease obligations
|
|
133,676
|
|
12,441
|
Current liabilities
of discontinued operations
|
|
116,110
|
|
ā
|
Total current
liabilities
|
|
2,102,149
|
|
699,224
|
Long-term
debt
|
|
2,943,992
|
|
308,836
|
Long-term capital
lease obligations
|
|
122,936
|
|
31,487
|
Pension and other
postretirement benefit obligations
|
|
208,816
|
|
ā
|
Deferred income
taxes
|
|
43,232
|
|
44,384
|
Other long-term
liabilities
|
|
374,949
|
|
34,586
|
Long-term liabilities
of discontinued operations
|
|
935
|
|
ā
|
Total
liabilities
|
|
5,797,009
|
|
1,118,517
|
Stockholders'
equity:
|
|
|
|
|
Preferred stock, par
value $0.01 per share, authorized 5,000 shares; issued
none
|
|
ā
|
|
ā
|
Common stock, par
value $0.01 per share, authorized 100,000 shares; 51,719 shares
issued
and 51,104 shares outstanding at April 27, 2019,
51,025 shares issued and 50,411 shares
outstanding at July 28, 2018
|
|
517
|
|
510
|
Additional paid-in
capital
|
|
502,733
|
|
483,623
|
Treasury stock at
cost
|
|
(24,231)
|
|
(24,231)
|
Accumulated other
comprehensive loss
|
|
(43,385)
|
|
(14,179)
|
Retained
earnings
|
|
1,096,582
|
|
1,400,232
|
Total United Natural
Foods, Inc. stockholders' equity
|
|
1,532,216
|
|
1,845,955
|
Noncontrolling
interests
|
|
(2,004)
|
|
ā
|
Total stockholders'
equity
|
|
1,530,212
|
|
1,845,955
|
Total liabilities and
stockholders' equity
|
|
$
|
7,327,221
|
|
$
|
2,964,472
|
UNITED NATURAL
FOODS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
|
|
|
|
|
39-Week Period
Ended
|
(In
thousands)
|
|
April 27,
2019
|
|
April
28, 2018
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net (loss) income
including noncontrolling interests
|
|
$
|
(304,043)
|
|
$
|
132,882
|
Income from
discontinued operations, net of tax
|
|
47,847
|
|
ā
|
Net (loss) income
from continuing operations
|
|
(351,890)
|
|
132,882
|
Adjustments to
reconcile net (loss) income from continuing operations to net cash
provided by (used in)
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
169,780
|
|
65,982
|
Share-based
compensation
|
|
18,827
|
|
21,712
|
(Gain) loss on
disposition of assets
|
|
(1,147)
|
|
111
|
Gain associated with
disposal of investments
|
|
ā
|
|
(699)
|
Closed property and
other restructuring charges
|
|
21,368
|
|
ā
|
Goodwill and asset
impairment charges
|
|
332,621
|
|
11,242
|
Net pension and other
postretirement benefit income
|
|
(22,691)
|
|
ā
|
Deferred income
taxes
|
|
(65,552)
|
|
(21,866)
|
LIFO
charge
|
|
13,686
|
|
ā
|
Change in accounting
estimate
|
|
ā
|
|
(20,909)
|
Provision for
doubtful accounts
|
|
12,486
|
|
8,805
|
Loss on debt
extinguishment
|
|
2,562
|
|
ā
|
Non-cash interest
expense
|
|
6,375
|
|
594
|
Changes in operating
assets and liabilities, net of acquired businesses
|
|
(130,051)
|
|
(229,130)
|
Net cash provided by
(used in) operating activities of continuing operations
|
|
6,374
|
|
(31,276)
|
Net cash provided by
operating activities of discontinued operations
|
|
70,816
|
|
ā
|
Net cash provided by
(used in) operating activities
|
|
77,190
|
|
(31,276)
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Capital
expenditures
|
|
(136,953)
|
|
(29,646)
|
Purchase of acquired
businesses, net of cash acquired
|
|
(2,282,327)
|
|
(29)
|
Proceeds from
dispositions of assets
|
|
169,274
|
|
47
|
Proceeds from
disposal of investments
|
|
ā
|
|
756
|
Long-term
investment
|
|
(110)
|
|
(3,397)
|
Other
|
|
299
|
|
ā
|
Net cash used in
investing activities of continuing operations
|
|
(2,249,817)
|
|
(32,269)
|
Net cash provided by
investing activities of discontinued operations
|
|
50,065
|
|
ā
|
Net cash used in
investing activities
|
|
(2,199,752)
|
|
(32,269)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Proceeds from
borrowings of long-term debt
|
|
1,912,178
|
|
ā
|
Proceeds from
borrowings under revolving credit line
|
|
3,313,014
|
|
500,061
|
Proceeds from
issuance of other loans
|
|
22,719
|
|
ā
|
Repayments of
borrowings under revolving credit line
|
|
(2,306,104)
|
|
(394,671)
|
Repayments of
long-term debt and capital lease obligations
|
|
(736,949)
|
|
(9,043)
|
Repurchase of common
stock
|
|
ā
|
|
(22,237)
|
Proceeds from the
issuance of common stock and exercise of stock options
|
|
1,589
|
|
602
|
Payment of employee
restricted stock tax withholdings
|
|
(3,253)
|
|
(4,522)
|
Payments for
capitalized debt issuance costs
|
|
(62,587)
|
|
ā
|
Net cash provided by
financing activities of continuing operations
|
|
2,140,607
|
|
70,190
|
Net cash used in
financing activities of discontinued operations
|
|
(254)
|
|
ā
|
Net cash provided by
financing activities
|
|
2,140,353
|
|
70,190
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
|
(226)
|
|
(301)
|
NET INCREASE IN
CASH AND CASH EQUIVALENTS
|
|
17,565
|
|
6,344
|
Cash and cash
equivalents, at beginning of period
|
|
23,315
|
|
15,414
|
Cash and cash
equivalents, at end of period
|
|
40,880
|
|
21,758
|
Less: cash and cash
equivalents of discontinued operations
|
|
(3,019)
|
|
ā
|
Cash and cash
equivalents of continuing operations
|
|
$
|
37,861
|
|
$
|
21,758
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
Cash paid for
interest
|
|
$
|
115,378
|
|
$
|
12,368
|
Cash paid for federal
and state income taxes, net of refunds
|
|
$
|
71,643
|
|
$
|
45,021
|
UNITED NATURAL
FOODS, INC.
|
Reconciliation of
Net Income (Loss) per Diluted Common Share to Adjusted Net Income
per Diluted Common Share
(unaudited)
|
|
|
13-Week Period
Ended
|
|
39-Week Period
Ended
|
|
April 27,
2019
|
|
April 28,
2018
|
|
April 27,
2019
|
|
April 28,
2018
|
Net income (loss)
attributable to UNFI per diluted common share
|
$
|
1.12
|
|
$
|
1.02
|
|
$
|
(5.99)
|
|
$
|
2.61
|
Restructuring,
acquisition, and integration related
expenses(1)
|
0.38
|
|
ā
|
|
2.65
|
|
ā
|
Goodwill and asset
impairment (adjustment) charges(2)
|
(0.75)
|
|
ā
|
|
6.55
|
|
0.22
|
Loss on debt
extinguishment(3)
|
0.01
|
|
ā
|
|
0.05
|
|
ā
|
Interest expense on
senior notes(4)
|
ā
|
|
ā
|
|
0.06
|
|
ā
|
Inventory fair value
adjustment(5)
|
ā
|
|
ā
|
|
0.21
|
|
ā
|
Net tax expense
(benefit) related to U.S. Tax Reform(6)
|
ā
|
|
0.02
|
|
ā
|
|
(0.41)
|
Legal reserve
adjustment
|
0.04
|
|
ā
|
|
0.04
|
|
ā
|
Discontinued
operations store closures and other charges,
net(7)
|
0.01
|
|
ā
|
|
0.26
|
|
ā
|
Tax impact of
adjustments(8)
|
(0.20)
|
|
ā
|
|
(2.17)
|
|
(0.07)
|
Adjusted net income
per diluted common share(9)
|
$
|
0.61
|
|
$
|
1.04
|
|
$
|
1.66
|
|
$
|
2.35
|
(1)
|
Primarily reflects
expenses resulting from the acquisition of SUPERVALU, including
employee-related costs, store closure charges, and acquisition and
integration expenses.
|
(2)
|
Fiscal 2019 reflects
a goodwill impairment charge and the related adjustment
attributable to the SUPERVALU acquisition. Fiscal 2018 reflects
goodwill and asset impairment charges recorded related to the
previously disposed Earth Origin's Market retail
business.
|
(3)
|
Reflects non-cash
charges related to the acceleration of unamortized debt issuance
costs due to term loan prepayments and extinguishment charges from
the Company's term loan, which was in place prior to the
acquisition of SUPERVALU.
|
(4)
|
Interest expense
recorded on the SUPERVALU senior notes in the mandatory 30-day
redemption notice period.
|
(5)
|
Non-cash charge
related to the step-up in inventory values from purchase
accounting.
|
(6)
|
The amount reflected
in the 39-week period ended April 28, 2018 represents the earnings
per share impact of a $20.9 million benefit related to the
remeasurement of net deferred tax liabilities as a result of U.S.
tax reform enacted in December 2017, $21.9 million of which was
recorded during the 13-week period ended January 27, 2018, with the
remaining $1.0 million of expense being recorded during the 13-week
period ended April 28, 2018.
|
(7)
|
Amounts represent
store closure charges and an inventory fair value adjustment
related to discontinued operations, net of the effect of fees
received from credit card companies related to a
settlement.
|
(8)
|
Represents the tax
effect of the adjustments besides the net tax expense (benefit)
related to U.S. Tax Reform.
|
(9)
|
The computation of
diluted earnings per share is calculated using diluted weighted
average shares outstanding, which includes the net effect of
dilutive stock awards.
|
Reconciliation of
Net Income (Loss) from continuing operations and Income from
discontinued operations, net of tax
to Adjusted EBITDA (unaudited)
|
(in
thousands)
|
|
|
|
13-Week Period
Ended
|
|
39-Week Period
Ended
|
|
|
April 27,
2019
|
|
April 28,
2018
|
|
April 27,
2019
|
|
April 28,
2018
|
Net income (loss)
from continuing operations(1)
|
|
$
|
32,774
|
|
$
|
51,891
|
|
$
|
(351,890)
|
|
$
|
132,882
|
Adjustments to
continuing operations net income:
|
|
|
|
|
|
|
|
|
Total other expense,
net
|
|
44,934
|
|
4,323
|
|
98,689
|
|
10,755
|
(Benefit) provision
for income taxes
|
|
(8,027)
|
|
25,943
|
|
(104,091)
|
|
33,831
|
Depreciation and
amortization
|
|
71,787
|
|
21,733
|
|
169,780
|
|
65,982
|
Share-based
compensation
|
|
9,251
|
|
7,866
|
|
27,763
|
|
21,712
|
Restructuring,
acquisition, and integration related expenses
|
|
19,438
|
|
151
|
|
134,567
|
|
151
|
Goodwill and asset
impairment (adjustment) charges
|
|
(38,250)
|
|
ā
|
|
332,621
|
|
11,242
|
Inventory fair value
adjustment
|
|
ā
|
|
ā
|
|
10,463
|
|
ā
|
Legal reserve
adjustment
|
|
2,200
|
|
ā
|
|
2,200
|
|
ā
|
Adjusted EBITDA of
discontinued operations(2)
|
|
34,068
|
|
ā
|
|
76,840
|
|
ā
|
Adjusted
EBITDA
|
|
$
|
168,175
|
|
$
|
111,907
|
|
$
|
396,942
|
|
$
|
276,555
|
|
|
|
|
|
|
|
|
|
Income from
discontinued operations, net of tax(1)
|
|
$
|
24,370
|
|
$
|
ā
|
|
$
|
47,847
|
|
$
|
ā
|
Adjustments to
discontinued operations net income:
|
|
|
|
|
|
|
|
|
Less net (income)
loss attributable to noncontrolling
interests(1)
|
|
(52)
|
|
ā
|
|
116
|
|
ā
|
Total other expense,
net
|
|
(369)
|
|
ā
|
|
(957)
|
|
ā
|
Provision for income
taxes
|
|
7,772
|
|
ā
|
|
13,759
|
|
ā
|
Depreciation and
amortization
|
|
591
|
|
ā
|
|
829
|
|
ā
|
Share-based
compensation
|
|
774
|
|
ā
|
|
1,306
|
|
ā
|
Restructuring, store
closure and other charges, net(3)
|
|
982
|
|
ā
|
|
13,940
|
|
ā
|
Adjusted EBITDA of
discontinued operations(2)
|
|
$
|
34,068
|
|
$
|
ā
|
|
$
|
76,840
|
|
$
|
ā
|
|
|
(1)
|
In the third quarter
of fiscal 2019, UNFI expanded its GAAP reconciliations to provide
additional supplemental information regarding its adjustments
within discontinued operations to arrive at the consolidated
measure of Adjusted EBITDA. Previously, these line items were
presented together as Net (loss) income attributable to United
Natural Foods, Inc. These lines have been separated to provide for
a separate presentation of the adjustments included within Adjusted
EBITDA related to discontinued operations. This additional
information had no impact on the previously presented calculation
and definition of Adjusted EBITDA. For additional information
regarding our discontinued operations, refer to UNFI's Quarterly
Reports on Form 10-Q.
|
|
|
(2)
|
Adjusted EBITDA of
discontinued operations excludes rent expense of $11.6 million,
$0.0 million, and $24.3 million and $0.0 million, respectively, as
presented in this table, of operating lease rent expense related to
stores within discontinued operations, but for which GAAP requires
the expense to be included within continuing operations, as we
expect to remain primarily obligated under these leases. Due to
these GAAP requirements to show rent expense, along with other
administrative expenses of discontinued operations within
continuing operations, UNFI believes the inclusion of discontinued
operations results within Adjusted EBITDA of discontinued
operations provides UNFI and investors a meaningful measure of
performance.
|
|
|
(3)
|
Amounts represent
store closure charges and costs, and an inventory fair value
adjustment related to discontinued operations, net of the effect of
fees received from credit card companies related to a
settlement.
|
View original
content:http://www.prnewswire.com/news-releases/united-natural-foods-inc-reports-third-quarter-fiscal-2019-results-300862795.html
SOURCE United Natural Foods, Inc.