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(LOS ANGELES) -- Unified Grocers ("Unified" or the "Company"), the largest wholesale grocery distributor in the western United States, reported strong sales for the fiscal quarter ended March 29, 2008 ("2008 period") over the fiscal quarter ended March 31, 2007 ("2007 period").
The Los Angeles-based cooperative achieved net sales of $991.9 million for the 2008 period as compared to $753.6 million for the 2007 period, a 31.6 percent increase. The Company attributed $201.5 million of its sales growth for the 2008 Period to customer business gained in the Pacific Northwest from the transaction with Associated Grocers, Inc. of Seattle, Washington (the "Seattle Operations"), which occurred at the beginning of the Company's 2008 fiscal year. Continued growth in the Company's existing customer base also contributed an additional 4.2 percent in sales over the prior year.
Sales grew $509.5 million or 33 percent to $2,044.4 million for the 26-weeks ended March 29, 2008 compared to $1,535.0 million for the same period last year. Sales growth was $422.8 million from the Seattle Operations with the remaining sales growth coming primarily from the Company's existing customer base.
Core recurring income contribution from wholesale operations improved versus the prior year, however, investments in the Company's distribution network, rising fuel costs and volatility in the equity markets caused a decline in the Company's operating income and net earnings for the 2008 Period.
Expenses and productivity issues related to an expansion project at the Company's Northern California Distribution Center, coupled with increased fuel costs, volatile equity markets and an absence of gains that boosted earnings during the quarter in 2007 all contributed to the reduction in the Company's operating income to $8.9 million and a decline in net earnings to $1.3 million for the quarter.
Unified remains ahead of its prior year earnings through two quarters and the Seattle Operations continue to be successfully integrated into the overall Company.
Year-to-date operating income and net earnings for the period ended March 29, 2008 were $31.4 million and $7.4 million compared to $29.8 million and $7.0 million in the same period last year. Sales growth and improved operating performance were the primary contributors to the increase in operating income. Operating performance was aided by favorable workers compensation adjustments in the Company's wholesale operations and profits in the Seattle Operations. The costs of the consolidation effort in Stockton along with the rise in fuel costs and volatility in the equity markets partially offset the growth in income.
"The consolidation of the Seattle Operations into Unified is proceeding extremely well," said Alfred A. Plamann, president and chief executive officer, Unified Grocers. "We are also seeing continued strength in sales to our existing base of independent retailers, many of whom are performing quite well in the consumer marketplace.
"While the investments we are making to improve our distribution network are having a short- term impact on our earnings, we are very confident that the steps we are taking will position us for growth and success over the long-term. I anticipate that the earnings for Unified in 2008 will be materially in line with our excellent performance in 2007."
Unified Grocers is a retailer-owned wholesale grocery distributor that supplies independent retailers throughout the western United States. Unified and its subsidiaries, which generated approximately $3.1 billion in sales during fiscal 2007, offer independent retailers all the resources they need to compete in the supermarket industry.
An online version of UnifiedÍs Form 10-K, filed with the Securities and Exchange Commission, is available on UnifiedÍs website at www.unifiedgrocers.com and at www.sec.gov/edgar.shtml.
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Safe Harbor Statement This press release contains forward-looking statements about the future performance of Unified Grocers based on Management's assumptions and beliefs in light of information currently available to it. There are a variety of factors that could cause actual and future results to differ materially from those anticipated by the statements made above. These factors are outlined in the Company's Form 10-K and other interim reports filed with the Securities and Exchange Commission. Furthermore, Unified undertakes no obligation to update, amend or clarify forward-looking statements whether as a result of new information, future events, or otherwise.
Unified Grocers, Inc.
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(dollars in thousands) |
Thirteen Weeks Ended |
Twenty-Six Weeks Ended |
|
|
March 29, 2008 |
March 31, 2007 |
March 29, 2008 |
March 31, 2007 |
|
Net sales |
$ 991,895 |
$ 753,624 |
$ 2,044,452 |
$ 1,534,999 |
|
Operating income |
8,927 |
13,477 |
31,396 |
29,756 |
|
Earnings before estimate patronage dividends and income taxes |
4,898 |
9,869 |
22,960 |
22,268 |
|
Estimated patronage dividends |
1,795 |
3,510 |
10,159 |
10,087 |
|
Net earnings |
$ 1,259 |
$ 3,570 |
$ 7,429 |
$ 7,032 |
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