United Natural Foods Reports $0.26 Diluted EPS, Excluding Special Items, and $0.25 Diluted EPS, Including Special Items, on Record Revenues of $601 Million for the Second Quarter of Fiscal 2006.

Publication: PR Newswire

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COPYRIGHT 2006 PR Newswire Association LLC

Increases Guidance for Fiscal 2006 Revenues and Earnings

DAYVILLE, Conn., Feb. 28 /PRNewswire-FirstCall/ -- United Natural Foods, Inc. (the "Company") today reported net income of $10.8 million, or $0.26 per diluted share, excluding special items, for the second quarter of fiscal 2006, ended January 28, 2006. Net income for the second quarter of fiscal 2006, including the effect of special items, was $10.6 million, or $0.25 per diluted share.

The Company reported revenues for the second quarter of fiscal 2006 of $601.1 million, an increase of $96.4 million, or 19%, from the $504.7 million recorded in the second quarter of fiscal 2005. Strong growth across all major sales channels of the wholesale segment contributed to the record sales.

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, the Company began expensing stock options on August 1, 2005. The Company has adopted the modified prospective method allowed under FAS 123R. The charge to earnings during fiscal 2006 includes the impact of the vesting of stock options granted in prior years, because the expense is recognized over the vesting period of the options, which is typically four years. For the second quarter of fiscal 2006, share-based compensation negatively impacted earnings before taxes by $0.9 million or 16 basis points.

For the second quarter of fiscal 2006, net income, excluding the effect of special items, increased 14.3% to $10.8 million, or $0.26 per diluted share, compared to $9.4 million, or $0.23 per diluted share, excluding special items, for the second quarter of fiscal 2005. Special items in the second quarter of fiscal 2006 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. Net income for the second quarter of fiscal 2006, including the effect of special items, increased 15.3% to $10.6 million, or $0.25 per diluted share, compared to $9.2 million, or $0.22 per diluted...

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