United Natural Foods, Inc. Reports Fourth Quarter and Full Year Fiscal 2024 Results
Fourth Quarter Fiscal 2024 Performance (comparisons to fourth quarter fiscal 2023)
-
Net sales increased 10.0% to
$8.2 billion ; grew 2.1% on a comparable 13-week basis -
Net loss of
$37 million ; Loss per diluted share (EPS) of$(0.63) -
Adjusted EBITDA(1) increased 53.8% to
$143 million , including an approximate$10 million benefit from the additional week -
Adjusted EPS(1) of
$0.01
Recent Financial and Operational Summary
- Improving volume trends, new business with existing customers as well as benefits from near-term efficiency initiatives led to full year performance at upper end of outlook ranges for key financial metrics
-
Net debt and net leverage(1) decreased sequentially to
$2.06 billion and 4.0x, respectively, at year end from$2.13 billion and 4.6x, respectively, at the end of the third quarter -
Advancing network optimization by consolidating Billings and Bismarck distribution centers into other facilities
- Expected to improve customer and supplier experience in the region through better technology access, a broader product assortment and more efficient and effective service
- Introducing three-year business plan and financial objectives driving customer and supplier value, margin expansion, free cash flow generation and deleveraging
“We delivered fourth quarter results that drove fiscal 2024 performance to the upper end of our previously provided outlook. This capped a year in which we generated four consecutive quarters of sequentially increasing profitability, significantly strengthened our foundation, and built momentum as we enter fiscal 2025. During fiscal 2024, we drove strong same customer growth, extended our agreement with our largest customer, realized approximately
“We are also actioning key elements of our updated strategy that has resulted from our ongoing board- and management-led financial review, which we expect will drive accelerating performance and create sustainable value for our customers and suppliers. Simultaneously, we are working to improve free cash flow generation and to reduce net leverage by optimizing our distribution center network, reducing the capital intensity of our business, and driving efficiencies across the organization. We expect these two elements of our strategy will work together to help us generate meaningful shareholder value,” said
|
Fourth Quarter Fiscal 2024 Summary (2) |
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|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
|||||||||||||||||||
|
($ in millions, except for per share data) |
|
|
|
|
Percent
|
|
|
|
|
|
Percent
|
|||||||||||
|
Net sales |
$ |
8,155 |
|
|
$ |
7,417 |
|
|
10.0 |
% |
|
$ |
30,980 |
|
|
$ |
30,272 |
|
|
2.3 |
% |
|
|
Chains |
$ |
3,425 |
|
|
$ |
3,141 |
|
|
9.0 |
% |
|
$ |
12,967 |
|
|
$ |
12,816 |
|
|
1.2 |
% |
|
|
Independent retailers |
$ |
1,983 |
|
|
$ |
1,897 |
|
|
4.5 |
% |
|
$ |
7,605 |
|
|
$ |
7,699 |
|
|
(1.2 |
)% |
|
|
Supernatural |
$ |
1,844 |
|
|
$ |
1,555 |
|
|
18.6 |
% |
|
$ |
6,941 |
|
|
$ |
6,374 |
|
|
8.9 |
% |
|
|
Retail |
$ |
628 |
|
|
$ |
609 |
|
|
3.1 |
% |
|
$ |
2,436 |
|
|
$ |
2,480 |
|
|
(1.8 |
)% |
|
|
Other |
$ |
650 |
|
|
$ |
593 |
|
|
9.6 |
% |
|
$ |
2,555 |
|
|
$ |
2,477 |
|
|
3.1 |
% |
|
|
Eliminations |
$ |
(375 |
) |
|
$ |
(378 |
) |
|
(0.8 |
)% |
|
$ |
(1,524 |
) |
|
$ |
(1,574 |
) |
|
(3.2 |
)% |
|
|
Net (loss) income |
$ |
(37 |
) |
|
$ |
(68 |
) |
|
N/M |
|
|
$ |
(112 |
) |
|
$ |
24 |
|
|
N/M |
|
|
|
Adjusted EBITDA(1) |
$ |
143 |
|
|
$ |
93 |
|
|
53.8 |
% |
|
$ |
518 |
|
|
$ |
640 |
|
|
(19.1 |
)% |
|
|
(Loss) earnings per diluted share (EPS) |
$ |
(0.63 |
) |
|
$ |
(1.15 |
) |
|
N/M |
|
|
$ |
(1.89 |
) |
|
$ |
0.40 |
|
|
N/M |
|
|
|
Adjusted earnings (loss) per diluted share (Adjusted EPS)(1) |
$ |
0.01 |
|
|
$ |
(0.25 |
) |
|
N/M |
|
|
$ |
0.14 |
|
|
$ |
2.23 |
|
|
(93.7 |
)% |
|
|
Net cash provided by operating activities |
$ |
191 |
|
|
$ |
222 |
|
|
(14.0 |
)% |
|
$ |
253 |
|
|
$ |
624 |
|
|
(59.5 |
)% |
|
|
Payments for capital expenditures |
$ |
(120 |
) |
|
$ |
(105 |
) |
|
14.3 |
% |
|
$ |
(345 |
) |
|
$ |
(323 |
) |
|
6.8 |
% |
|
|
Free cash flow(1) |
$ |
71 |
|
|
$ |
117 |
|
|
(39.3 |
)% |
|
$ |
(92 |
) |
|
$ |
301 |
|
|
N/M |
|
|
|
N/M - not meaningful |
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|
(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. |
|
|
(2) |
Please refer to the table in this press release detailing comparable growth rates for relevant financial metrics adjusted for the impact of the 53rd week in fiscal 2024. |
Fourth Quarter Fiscal 2024 Summary
Net sales in the fourth quarter of fiscal 2024 were
Gross profit in the fourth quarter of fiscal 2024 was
Operating expenses in the fourth quarter of fiscal 2024 were
Interest expense, net for the fourth quarter of fiscal 2024 was
Effective tax rate for the fourth quarter of fiscal 2024 was a benefit of 15.9% on a pre-tax loss compared to a benefit of 35.0% of pre-tax loss for the fourth quarter of fiscal 2023. The effective tax rate for the fourth quarter of fiscal 2024 includes charges related to share-based compensation and the deductibility of charitable contributions. The effective tax rate for the fourth quarter of fiscal 2023 included benefits from a favorable state audit settlement and the reduction in pre-tax income during the fourth quarter of fiscal 2023.
Net loss for the fourth quarter of fiscal 2024 was
Net loss per diluted share (EPS) was
Adjusted EBITDAfor the fourth quarter of fiscal 2024 was
Capital Allocation and Financing Overview
-
Free Cash Flow – During the fourth quarter of 2024, free cash flow was
$71 million , compared to$117 million in last year’s fourth quarter. This quarter’s results reflect net cash provided by operating activities of$191 million less payments for capital expenditures of$120 million . -
Net Leverage – Total outstanding debt, net of cash, ended the quarter at
$2.06 billion , reflecting an increase of$115 million during fiscal 2024. The net debt to adjusted EBITDA leverage ratio was 4.0x as ofAugust 3, 2024 . -
Liquidity – As of
August 3, 2024 , total liquidity was approximately$1.28 billion , consisting of approximately$40 million in cash, plus the unused capacity of approximately$1.24 billion under the Company’s asset-based lending facility.
Fiscal 2025 Outlook (1)
The Company is providing the following outlook for fiscal 2025, a 52-week year.
|
Fiscal Year Ending |
|
|
|
Net sales ($ in billions) |
|
|
|
Net loss ($ in millions) |
|
|
|
EPS (2) |
|
|
|
Adjusted EPS (2)(3)(4) |
|
|
|
Adjusted EBITDA (4) ($ in millions) |
|
|
|
Capital and cloud implementation expenditures (5)(6)($ in millions) |
|
~ |
|
Free cash flow (6) |
|
~ |
|
(1) |
The outlook provided above is for fiscal 2025 only. This outlook is forward-looking, is based on management’s current estimates and expectations and is subject to a number of risks, including many that are outside of management’s control. See cautionary Safe Harbor Statement below. |
|
|
(2) |
(Loss) earnings per share amounts as presented include rounding. |
|
|
(3) |
The Company uses an adjusted effective tax rate in calculating Adjusted EPS. The adjusted effective tax rate is calculated based on adjusted net (loss) income before tax. It also excludes the potential impact of changes to uncertain tax positions, valuation allowances, tax impacts related to the vesting of share-based compensation awards and discrete GAAP tax items which could impact the comparability of the operational effective tax rate. The Company believes using this adjusted effective tax rate provides better consistency across the interim reporting periods since each of these discrete items can cause volatility in the GAAP tax rate that is not indicative of the underlying ongoing operations of the Company. By providing this non-GAAP measure, management intends to provide investors with a meaningful, consistent comparison of the Company’s effective tax rate on ongoing operations. The outlook for Adjusted EPS reflects a tax rate of 26%. |
|
|
(4) |
The Company is unable to provide a full reconciliation to the most comparable GAAP measure without unreasonable effort due to the difficulty in predicting the amounts for certain adjustment items. |
|
|
(5) |
Reflects the sum of payments for capital expenditures and cloud technology implementation expenditures. The Company believes that providing this non-GAAP measure provides investors with better visibility to the Company’s total investment spend. |
|
|
(6) |
The components of capital and cloud implementation expenditures for fiscal 2025 will be primarily dependent on the nature of certain contracts to be executed. As such, the Company is unable to reconcile the outlook for free cash flow as well as capital and cloud implementation expenditures in fiscal 2025 to the most directly comparable financial measures calculated in accordance with GAAP. |
Conference Call and Webcast
The Company’s fourth quarter and full year fiscal 2024 conference call and audio webcast will be held today,
About
UNFI is North America’s premier grocery wholesaler delivering the widest variety of fresh, branded, and owned brand products to more than 30,000 locations throughout
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 for the year ended
Non-GAAP Financial Measures: To supplement the financial information presented on a
The reconciliation of these non-GAAP financial measures to their comparable GAAP financial measures and the calculation of net debt to Adjusted EBITDA leverage 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 the non-GAAP financial measures Adjusted EBITDA and Adjusted EPS aids in making period-to-period comparisons, assessing the performance of the Company’s business and understanding the underlying operating performance and core business trends by excluding certain adjustments not expected to recur in the normal course of business or that are not meaningful indicators of actual and estimated operating performance. The inclusion of free cash flow assists investors in understanding the cash generating ability of the Company separate from cash generated by the sale of assets. Net debt to Adjusted EBITDA leverage ratio is a commonly used metric that assists investors in understanding and evaluating the Company’s capital structure and changes to its capital structure over time. The Company believes that providing non-GAAP capital and cloud implementation expenditures provides investors with better visibility into the Company's total investment expenditures. The components of capital and cloud implementation expenditures for fiscal 2025 will be primarily dependent on the nature of certain contracts to be executed. The Company currently expects to continue to exclude the items listed above from non-GAAP financial measures. Management utilizes and plans to utilize these non-GAAP financial measures to compare the Company’s operating performance during the 2025 fiscal year to the comparable periods in the 2024 fiscal year and to internally prepared projections. These non-GAAP financial measures may differ from similarly titled measures of other companies.
|
|
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|
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
||||||||||||||||
|
(in millions, except for per share data) |
||||||||||||||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
|||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net sales |
$ |
8,155 |
|
|
$ |
7,417 |
|
|
$ |
30,980 |
|
|
$ |
30,272 |
|
|
|
Cost of sales |
|
7,039 |
|
|
|
6,451 |
|
|
|
26,779 |
|
|
|
26,141 |
|
|
|
Gross profit |
|
1,116 |
|
|
|
966 |
|
|
|
4,201 |
|
|
|
4,131 |
|
|
|
Operating expenses |
|
1,075 |
|
|
|
1,004 |
|
|
|
4,100 |
|
|
|
3,973 |
|
|
|
Restructuring, acquisition and integration related expenses |
|
19 |
|
|
|
7 |
|
|
|
36 |
|
|
|
8 |
|
|
|
Loss on sale of assets and other asset charges |
|
20 |
|
|
|
30 |
|
|
|
57 |
|
|
|
30 |
|
|
|
Operating income (loss) |
|
2 |
|
|
|
(75 |
) |
|
|
8 |
|
|
|
120 |
|
|
|
Net periodic benefit income, excluding service cost |
|
(4 |
) |
|
|
(7 |
) |
|
|
(15 |
) |
|
|
(29 |
) |
|
|
Interest expense, net |
|
50 |
|
|
|
35 |
|
|
|
162 |
|
|
|
144 |
|
|
|
Other income, net |
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(Loss) income before income taxes |
|
(44 |
) |
|
|
(103 |
) |
|
|
(137 |
) |
|
|
7 |
|
|
|
Benefit for income taxes |
|
(7 |
) |
|
|
(36 |
) |
|
|
(27 |
) |
|
|
(23 |
) |
|
|
Net (loss) income including noncontrolling interests |
|
(37 |
) |
|
|
(67 |
) |
|
|
(110 |
) |
|
|
30 |
|
|
|
Less net income attributable to noncontrolling interests |
|
— |
|
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
Net (loss) income attributable to |
$ |
(37 |
) |
|
$ |
(68 |
) |
|
$ |
(112 |
) |
|
$ |
24 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Basic (loss) earnings per share |
$ |
(0.63 |
) |
|
$ |
(1.15 |
) |
|
$ |
(1.89 |
) |
|
$ |
0.41 |
|
|
|
Diluted (loss) earnings per share |
$ |
(0.63 |
) |
|
$ |
(1.15 |
) |
|
$ |
(1.89 |
) |
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|||||||||
|
Basic |
|
59.5 |
|
|
|
58.6 |
|
|
|
59.3 |
|
|
|
59.2 |
|
|
|
Diluted |
|
59.5 |
|
|
|
58.6 |
|
|
|
59.3 |
|
|
|
60.7 |
|
|
|
|
||||||||
|
CONSOLIDATED BALANCE SHEETS (unaudited) |
||||||||
|
(in millions, except for par values) |
||||||||
|
|
|
|
|
|||||
|
ASSETS |
|
|
|
|||||
|
Cash and cash equivalents |
$ |
40 |
|
|
$ |
37 |
|
|
|
Accounts receivable, net |
|
953 |
|
|
|
889 |
|
|
|
Inventories, net |
|
2,179 |
|
|
|
2,292 |
|
|
|
Prepaid expenses and other current assets |
|
230 |
|
|
|
245 |
|
|
|
Total current assets |
|
3,402 |
|
|
|
3,463 |
|
|
|
Property and equipment, net |
|
1,820 |
|
|
|
1,767 |
|
|
|
Operating lease assets |
|
1,370 |
|
|
|
1,228 |
|
|
|
|
|
19 |
|
|
|
20 |
|
|
|
Intangible assets, net |
|
649 |
|
|
|
722 |
|
|
|
Deferred income taxes |
|
87 |
|
|
|
32 |
|
|
|
Other long-term assets |
|
181 |
|
|
|
162 |
|
|
|
Total assets |
$ |
7,528 |
|
|
$ |
7,394 |
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|||||
|
Accounts payable |
$ |
1,688 |
|
|
$ |
1,781 |
|
|
|
Accrued expenses and other current liabilities |
|
288 |
|
|
|
283 |
|
|
|
Accrued compensation and benefits |
|
197 |
|
|
|
143 |
|
|
|
Current portion of operating lease liabilities |
|
181 |
|
|
|
180 |
|
|
|
Current portion of long-term debt and finance lease liabilities |
|
11 |
|
|
|
18 |
|
|
|
Total current liabilities |
|
2,365 |
|
|
|
2,405 |
|
|
|
Long-term debt |
|
2,081 |
|
|
|
1,956 |
|
|
|
Long-term operating lease liabilities |
|
1,263 |
|
|
|
1,099 |
|
|
|
Long-term finance lease liabilities |
|
12 |
|
|
|
12 |
|
|
|
Pension and other postretirement benefit obligations |
|
15 |
|
|
|
16 |
|
|
|
Other long-term liabilities |
|
151 |
|
|
|
162 |
|
|
|
Total liabilities |
|
5,887 |
|
|
|
5,650 |
|
|
|
Stockholders’ equity: |
|
|
|
|||||
|
Preferred stock, |
|
— |
|
|
|
— |
|
|
|
Common stock, |
|
1 |
|
|
|
1 |
|
|
|
Additional paid-in capital |
|
635 |
|
|
|
606 |
|
|
|
|
|
(86 |
) |
|
|
(86 |
) |
|
|
Accumulated other comprehensive loss |
|
(47 |
) |
|
|
(28 |
) |
|
|
Retained earnings |
|
1,138 |
|
|
|
1,250 |
|
|
|
|
|
1,641 |
|
|
|
1,743 |
|
|
|
Noncontrolling interests |
|
— |
|
|
|
1 |
|
|
|
Total stockholders’ equity |
|
1,641 |
|
|
|
1,744 |
|
|
|
Total liabilities and stockholders’ equity |
$ |
7,528 |
|
|
$ |
7,394 |
|
|
|
|
||||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) |
||||||||
|
|
Fiscal Year Ended |
|||||||
|
(in millions) |
|
|
|
|||||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|||||
|
Net (loss) income including noncontrolling interests |
$ |
(110 |
) |
|
$ |
30 |
|
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|||||
|
Depreciation and amortization |
|
319 |
|
|
|
304 |
|
|
|
Share-based compensation |
|
39 |
|
|
|
38 |
|
|
|
Gain on sale of assets |
|
(7 |
) |
|
|
(9 |
) |
|
|
Long-lived asset impairment charges |
|
43 |
|
|
|
25 |
|
|
|
Net pension and other postretirement benefit income |
|
(15 |
) |
|
|
(29 |
) |
|
|
Deferred income tax benefit |
|
(49 |
) |
|
|
(36 |
) |
|
|
LIFO charge |
|
7 |
|
|
|
119 |
|
|
|
Provision (recoveries) for losses on receivables |
|
3 |
|
|
|
(1 |
) |
|
|
Non-cash interest expense and other adjustments |
|
18 |
|
|
|
13 |
|
|
|
Changes in operating assets and liabilities, net of acquired businesses |
|
|
|
|||||
|
Accounts and notes receivable |
|
(68 |
) |
|
|
327 |
|
|
|
Inventories |
|
104 |
|
|
|
(57 |
) |
|
|
Prepaid expenses and other assets |
|
(157 |
) |
|
|
(108 |
) |
|
|
Accounts payable |
|
(81 |
) |
|
|
53 |
|
|
|
Accrued expenses and other liabilities |
|
207 |
|
|
|
(45 |
) |
|
|
Net cash provided by operating activities |
|
253 |
|
|
|
624 |
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|||||
|
Payments for capital expenditures |
|
(345 |
) |
|
|
(323 |
) |
|
|
Proceeds from dispositions of assets |
|
25 |
|
|
|
16 |
|
|
|
Payments for investments |
|
(22 |
) |
|
|
(32 |
) |
|
|
Net cash used in investing activities |
|
(342 |
) |
|
|
(339 |
) |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|||||
|
Proceeds from borrowings under revolving credit line |
|
2,571 |
|
|
|
2,976 |
|
|
|
Proceeds from issuance of other loans |
|
15 |
|
|
|
— |
|
|
|
Repayments of borrowings under revolving credit line |
|
(2,270 |
) |
|
|
(3,004 |
) |
|
|
Repayments of long-term debt and finance leases |
|
(191 |
) |
|
|
(154 |
) |
|
|
Repurchases of common stock |
|
— |
|
|
|
(62 |
) |
|
|
Payments of employee restricted stock tax withholdings |
|
(7 |
) |
|
|
(40 |
) |
|
|
Payments for debt issuance costs |
|
(18 |
) |
|
|
— |
|
|
|
Distributions to noncontrolling interests |
|
(4 |
) |
|
|
(6 |
) |
|
|
Repayments of other loans |
|
(2 |
) |
|
|
(2 |
) |
|
|
Other |
|
(2 |
) |
|
|
— |
|
|
|
Net cash provided by (used in) financing activities |
|
92 |
|
|
|
(292 |
) |
|
|
EFFECT OF EXCHANGE RATE ON CASH |
|
— |
|
|
|
— |
|
|
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
3 |
|
|
|
(7 |
) |
|
|
Cash and cash equivalents, at beginning of period |
|
37 |
|
|
|
44 |
|
|
|
Cash and cash equivalents, at end of period |
$ |
40 |
|
|
$ |
37 |
|
|
|
Supplemental disclosures of cash flow information: |
|
|
|
|||||
|
Cash paid for interest |
$ |
159 |
|
|
$ |
133 |
|
|
|
Cash refunds for federal, state and foreign income taxes, net |
$ |
(14 |
) |
|
$ |
(5 |
) |
|
|
Additions of property and equipment included in Accounts payable |
$ |
21 |
|
|
$ |
32 |
|
|
|
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION |
||||||||||||||||
|
|
||||||||||||||||
|
Reconciliation of Net (loss) income including noncontrolling interests to Adjusted EBITDA (unaudited) |
||||||||||||||||
|
|
|
|
|
|||||||||||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
|||||||||||||
|
(in millions) |
|
|
|
|
|
|
|
|||||||||
|
Net (loss) income including noncontrolling interests |
$ |
(37 |
) |
|
$ |
(67 |
) |
|
$ |
(110 |
) |
|
$ |
30 |
|
|
|
Adjustments to net (loss) income including noncontrolling interests: |
|
|
|
|
|
|
|
|||||||||
|
Less net income attributable to noncontrolling interests |
|
— |
|
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
Net periodic benefit income, excluding service cost |
|
(4 |
) |
|
|
(7 |
) |
|
|
(15 |
) |
|
|
(29 |
) |
|
|
Interest expense, net |
|
50 |
|
|
|
35 |
|
|
|
162 |
|
|
|
144 |
|
|
|
Other income, net |
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
(2 |
) |
|
|
Benefit for income taxes |
|
(7 |
) |
|
|
(36 |
) |
|
|
(27 |
) |
|
|
(23 |
) |
|
|
Depreciation and amortization |
|
91 |
|
|
|
80 |
|
|
|
319 |
|
|
|
304 |
|
|
|
Share-based compensation |
|
11 |
|
|
|
5 |
|
|
|
37 |
|
|
|
38 |
|
|
|
LIFO (benefit) charge |
|
(12 |
) |
|
|
36 |
|
|
|
7 |
|
|
|
119 |
|
|
|
Restructuring, acquisition and integration related expenses(1) |
|
19 |
|
|
|
7 |
|
|
|
36 |
|
|
|
8 |
|
|
|
Loss on sale of assets and other asset charges(2) |
|
20 |
|
|
|
30 |
|
|
|
57 |
|
|
|
30 |
|
|
|
Multiemployer pension plan withdrawal charges(3) |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
Other retail expense(4) |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
Business transformation costs(5) |
|
12 |
|
|
|
9 |
|
|
|
52 |
|
|
|
25 |
|
|
|
Other adjustments(6) |
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
Adjusted EBITDA |
$ |
143 |
|
|
$ |
93 |
|
|
$ |
518 |
|
|
$ |
640 |
|
|
|
(1) |
Fiscal 2024 and fiscal 2023 primarily reflects costs associated with certain employee severance. |
|
|
(2) |
Fiscal 2024 primarily includes a |
|
|
(3) |
Fiscal 2023 reflects adjustments to multiemployer pension plan withdrawal charge estimates. |
|
|
(4) |
Fiscal 2023 reflects store closure costs, operational wind-down and inventory charges. |
|
|
(5) |
Reflects costs associated with business transformation initiatives, primarily including third-party consulting costs and licensing costs, and third-party professional service fees related to the board-led financial review in fiscal 2024, all of which are included within Operating expenses in the Consolidated Statements of Operations. |
|
|
(6) |
Primarily reflects third-party professional service fees related to shareholder negotiations in the first quarter of fiscal 2024. |
|
Reconciliation of Net (loss) income attributable to |
||||||||||||||||
|
|
||||||||||||||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
|||||||||||||
|
(in millions, except per share amounts) |
|
|
|
|
|
|
|
|||||||||
|
Net (loss) income attributable to |
$ |
(37 |
) |
|
$ |
(68 |
) |
|
$ |
(112 |
) |
|
$ |
24 |
|
|
|
Restructuring, acquisition, and integration related expenses(1) |
|
19 |
|
|
|
7 |
|
|
|
36 |
|
|
|
8 |
|
|
|
Loss on sale of assets and other asset charges other than losses on sales of receivables(2) |
|
15 |
|
|
|
25 |
|
|
|
36 |
|
|
|
16 |
|
|
|
LIFO (benefit) charge |
|
(12 |
) |
|
|
36 |
|
|
|
7 |
|
|
|
119 |
|
|
|
Surplus property depreciation and interest expense(3) |
|
2 |
|
|
|
1 |
|
|
|
5 |
|
|
|
2 |
|
|
|
Multiemployer pension plan withdrawal charges(4) |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
Loss on debt extinguishment |
|
10 |
|
|
|
— |
|
|
|
10 |
|
|
|
3 |
|
|
|
Other retail expense(5) |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
Business transformation costs(6) |
|
12 |
|
|
|
9 |
|
|
|
52 |
|
|
|
25 |
|
|
|
Other adjustments(7) |
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
Tax impact of adjustments and adjusted effective tax rate(8) |
|
(8 |
) |
|
|
(26 |
) |
|
|
(29 |
) |
|
|
(63 |
) |
|
|
Adjusted net income (loss) |
$ |
1 |
|
|
$ |
(14 |
) |
|
$ |
9 |
|
|
$ |
136 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Diluted weighted average shares outstanding |
|
60.0 |
|
|
|
58.6 |
|
|
|
60.4 |
|
|
|
60.7 |
|
|
|
Adjusted EPS(9) |
$ |
0.01 |
|
|
$ |
(0.25 |
) |
|
$ |
0.14 |
|
|
$ |
2.23 |
|
|
|
(1) |
Fiscal 2024 and fiscal 2023 primarily reflects costs associated with certain employee severance. |
|
|
(2) |
Loss on sale of assets and other asset charges, as reflected here, does not include losses on sales of receivables under the accounts receivable monetization program, which are included in Loss on sale of assets and other asset charges on the Consolidated Statements of Operations and are not adjusted in the calculation of Adjusted EPS. Fiscal 2024 primarily includes a |
|
|
(3) |
Reflects surplus, non-operating property depreciation and interest expense. |
|
|
(4) |
Fiscal 2023 reflects adjustments to multiemployer pension plan withdrawal charge estimates. |
|
|
(5) |
Fiscal 2023 reflects store closure costs, operational wind-down and inventory charges. |
|
|
(6) |
Reflects costs associated with business transformation initiatives, primarily including third-party consulting costs and licensing costs, and third-party professional service fees related to the board-led financial review in fiscal 2024, all of which are included within Operating expenses in the Consolidated Statements of Operations. |
|
|
(7) |
Primarily reflects third-party professional service fees related to shareholder negotiations in the first quarter of fiscal 2024. |
|
|
(8) |
Represents the tax effect of the pre-tax adjustments using an adjusted effective tax rate. The adjusted effective tax rate is calculated based on adjusted net income before tax, and its impact reflects the exclusion of changes to uncertain tax positions, valuation allowances, tax impacts related to the vesting of share-based compensation awards and discrete GAAP tax items which could impact the comparability of the operational effective tax rate. The Company believes using this adjusted effective tax rate will provide better consistency across the interim reporting periods since each of these discrete items can cause volatility in the GAAP tax rate that is not indicative of the true operations of the Company. By providing this non-GAAP measure, management intends to provide investors with a meaningful, consistent comparison of the Company’s effective tax rate on ongoing operations. |
|
|
(9) |
Adjusted earnings (loss) per share amounts are calculated using actual unrounded figures. |
|
Calculation of net debt to Adjusted EBITDA leverage ratio (unaudited) |
||||
|
|
|
|||
|
(in millions, except ratios) |
Fiscal Year Ended |
|||
|
|
||||
|
Current portion of long-term debt and finance lease liabilities |
$ |
11 |
|
|
|
Long-term debt |
|
2,081 |
|
|
|
Long-term finance lease liabilities |
|
12 |
|
|
|
Less: Cash and cash equivalents |
|
(40 |
) |
|
|
Net carrying value of debt and finance lease liabilities |
|
2,064 |
|
|
|
Adjusted EBITDA |
$ |
518 |
|
|
|
Adjusted EBITDA leverage ratio |
4.0x |
|||
|
Reconciliation of Net cash provided by operating activities to Free cash flow (unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
|||||||||||||
|
(in millions) |
|
|
|
|
|
|
|
|||||||||
|
(14 weeks) |
(13 weeks) |
(53 weeks) |
(52 weeks) |
|||||||||||||
|
Net cash provided by operating activities |
$ |
191 |
|
|
$ |
222 |
|
|
$ |
253 |
|
|
$ |
624 |
|
|
|
Payments for capital expenditures |
|
(120 |
) |
|
|
(105 |
) |
|
|
(345 |
) |
|
|
(323 |
) |
|
|
Free cash flow |
$ |
71 |
|
|
$ |
117 |
|
|
$ |
(92 |
) |
|
$ |
301 |
|
|
|
Reconciliation of Payments for capital expenditures to Capital and cloud implementation expenditures (unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
|||||||||
|
(in millions) |
|
|
|
|
|
|
|
|||||
|
(14 weeks) |
(13 weeks) |
(53 weeks) |
(52 weeks) |
|||||||||
|
Payments for capital expenditures |
$ |
120 |
|
$ |
105 |
|
$ |
345 |
|
$ |
323 |
|
|
Cloud technology implementation expenditures (1) |
|
5 |
|
|
12 |
|
|
25 |
|
|
21 |
|
|
Capital and cloud implementation expenditures (2) |
$ |
125 |
|
$ |
117 |
|
$ |
370 |
|
$ |
344 |
|
|
(1) |
Cloud technology implementation expenditures are included in operating activities in the Consolidated Statements of Cash Flows. |
|
|
(2) |
Certain amounts in fiscal 2024 have been reclassified from Cloud technology implementation expenditures to Payments for capital expenditures. These reclassifications had no impact on total Capital and cloud implementation expenditures, or on prior year reported amounts. |
|
Fiscal 2024 Comparable Growth Rates (unaudited) |
||||||||||||||||||||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
|||||||||||||||||||
|
($ in millions) |
|
|
|
|
Comparable
|
|
|
|
|
|
Comparable
|
|||||||||||
|
Net sales |
$ |
7,573 |
|
|
$ |
7,417 |
|
|
2.1 |
% |
|
$ |
30,398 |
|
|
$ |
30,272 |
|
|
0.4 |
% |
|
|
Chains |
$ |
3,180 |
|
|
$ |
3,141 |
|
|
1.2 |
% |
|
$ |
12,722 |
|
|
$ |
12,816 |
|
|
(0.7 |
)% |
|
|
Independent retailers |
$ |
1,842 |
|
|
$ |
1,897 |
|
|
(2.9 |
)% |
|
$ |
7,464 |
|
|
$ |
7,699 |
|
|
(3.1 |
)% |
|
|
Supernatural |
$ |
1,711 |
|
|
$ |
1,555 |
|
|
10.0 |
% |
|
$ |
6,808 |
|
|
$ |
6,374 |
|
|
6.8 |
% |
|
|
Retail |
$ |
583 |
|
|
$ |
609 |
|
|
(4.3 |
)% |
|
$ |
2,391 |
|
|
$ |
2,480 |
|
|
(3.6 |
)% |
|
|
Other |
$ |
606 |
|
|
$ |
593 |
|
|
2.2 |
% |
|
$ |
2,511 |
|
|
$ |
2,477 |
|
|
1.4 |
% |
|
|
Eliminations |
$ |
(349 |
) |
|
$ |
(378 |
) |
|
(7.7 |
)% |
|
$ |
(1,498 |
) |
|
$ |
(1,574 |
) |
|
(4.8 |
)% |
|
|
Adjusted EBITDA |
$ |
133 |
|
|
$ |
93 |
|
|
43.0 |
% |
|
$ |
508 |
|
|
$ |
640 |
|
|
(20.6 |
)% |
|
|
(1) |
Excludes the estimated impact of the 53rd week in fiscal 2024. |
|
|
(2) |
The comparable 13-week and 52-week percent changes remove the estimated contribution from the additional week in fiscal 2024 which is calculated by subtracting one-fifth of the respective metrics for the last five-week period within the 14-week fourth quarter of fiscal 2024. |
|
Reconciliation of actual 2024 and 2023 U.S. GAAP effective tax rate to adjusted effective tax rate (unaudited) |
||||||
|
|
Actual Fiscal
|
|
Actual Fiscal
|
|||
|
|
20 |
% |
|
(329 |
)% |
|
|
Discrete quarterly recognition of GAAP items(1) |
20 |
% |
|
270 |
% |
|
|
Tax impact of other charges and adjustments(2) |
(24 |
)% |
|
139 |
% |
|
|
Changes in valuation allowances(3) |
5 |
% |
|
(57 |
)% |
|
|
Other(4) |
— |
% |
|
— |
% |
|
|
Adjusted Effective Tax Rate(4) |
21 |
% |
|
23 |
% |
|
|
Note: As part of the year-end reconciliation, we have updated the reconciliation of the fiscal 2024 GAAP effective tax rate for actual results. |
||||||
|
(1) |
Reflects changes in tax laws, uncertain tax positions, the tax impacts related to the exercise of share-based compensation awards and any prior-year deferred tax or payable adjustments. This includes prior-year |
|
|
(2) |
Reflects the tax impact of pre-tax adjustments that are excluded from pre-tax income when calculating Adjusted EPS. |
|
|
(3) |
Reflects changes in valuation allowances related to changes in judgment regarding the realizability of deferred tax assets or current year operations. |
|
|
(4) |
The Company establishes an estimated adjusted effective tax rate at the beginning of the fiscal year based on the best available information. The Company re-evaluates its estimated adjusted effective tax rate as appropriate throughout the year and adjusts for any material changes. The actual adjusted effective tax rate at the end of the fiscal year is based on actual results and accordingly may differ from the estimated adjusted effective tax rate used during the year. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241001971381/en/
INVESTOR CONTACTS:
Vice President, Investor Relations
952-828-4144 sbloomquist@unfi.com
Senior Vice President, Investor Relations and Corporate Development
401-213-2160 kristyn.farahmand@unfi.com
Source:
