LOS ANGELES, Aug. 18, 2009 (GLOBE NEWSWIRE) -- Unified Grocers ("Unified" or the "Company"), the largest wholesale grocery distributor in the western United States, reported net sales declined 2.4 percent to $992.5 million for the fiscal quarter ended June 27, 2009 ("2009 period"), compared to $1,017.1 million for the fiscal quarter ended June 28, 2008 ("2008 period"). The decline in sales was primarily the result of the transition of a major customer of the former Associated Grocers ("Seattle") to another wholesaler. In addition, the Company is experiencing some changes in customer purchase patterns and a decline in milk sales revenue (due to a significant decrease in raw milk prices).
Operating income for the 2009 period was $11.0 million, compared to $19.2 million for the 2008 period. The decline resulted primarily from the impact of lower inventory holding gains resulting from minimal vendor price increases, the conversion of Seattle customers to membership in the cooperative that qualifies them for member pricing and the lower level of sales. Reduced operating expenses and improved performance in Unified's equity investments helped partially mitigate the decline in operating income.
Unified reported net earnings of $3.9 million for the third fiscal quarter of 2009 compared to net earnings of $4.8 million for the third fiscal quarter of 2008. The decline in net earnings was due primarily to the conversion of Seattle customers to membership in the cooperative.
Unified's year-to-date sales were $2,989.4 million for the 39 weeks ended June 27, 2009, compared to $3,061.5 million for the same period last year, or a 2.4 percent decline. Sales at Market Centre, the company's wholly-owned specialty company, are 5.8 percent ahead of the prior year. This is offset by the impact of the Seattle customer transition, the changes in customer purchase patterns and the decline in raw milk prices.
Year-to-date operating income and net earnings for the period ended June 27, 2009 were $37.7 million and $10.2 million, respectively, compared to $50.6 million and $12.2 million in the same period last year. Performance was primarily impacted by decreased sales and the conversion of the Seattle customers to membership, partially offset by reduced operating expenses.
"This economic environment continues to be challenging. We are seeing some changes in product mix as the consumers trade down. In the third quarter, we were not able to achieve our normal level of inventory holding gains in this economic cycle of low levels of inflation. However, we are holding the line on expenses and our year-to-date results are about where we thought we'd be after 39 weeks," said Al Plamann, president and chief executive officer, Unified Grocers. "Overall, our independent retailers are competing effectively in this difficult-to-predict market, which is very encouraging."
"We are continuing to support our retailers by managing inventories, making improvements to our distribution network, reducing operating expenses and keeping an eye out for new opportunities that emerge within our marketplace," said Plamann. "Our liquidity remains strong and we are well positioned for the future."
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 $4.1 billion in sales during fiscal 2008, offer independent retailers all the resources they need to compete in the supermarket industry.
An online version of Unified's Form 10-Q and other financial documents, filed with the Securities and Exchange Commission, is available on Unified's website at www.unifiedgrocers.com and at www.sec.gov/edgar.shtml.
The Unified Grocers, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=1214
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.
(dollars in thousands)
For the Thirteen For the Thirty-Nine
Weeks Ended Weeks Ended
---------------------- ----------------------
June 27, June 28, June 27, June 28,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Net sales $ 992,491 $1,017,055 $2,989,405 $3,061,507
Operating income 11,046 19,159 37,666 50,555
Earnings before
patronage dividends
and income taxes 8,404 15,463 28,672 38,423
Patronage dividends 2,369 6,976 11,633 17,135
Net earnings $ 3,888 $ 4,790 $ 10,201 $ 12,219