LOS ANGELES, Aug. 13, 2008 (PRIME NEWSWIRE) -- Unified Grocers ("Unified" or the "Company"), the largest wholesale grocery distributor in the western United States, reported improved performance for the fiscal quarter ended June 28, 2008 ("2008 period") over the fiscal quarter ended June 30, 2007 ("2007 period").
The Los Angeles-based cooperative achieved net sales of $1,017.1 million for the 2008 period as compared to $790.6 million for the 2007 period, a 28.6 percent increase. The Company attributed $194.5 million of its sales growth for the 2008 Period to customer business gained in the Pacific Northwest from the transaction with Associated Grocers, Inc., 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 plus inflationary effects also contributed an additional 3.3 percent in sales over the prior year.
Sales grew $735.9 million or 31.6 percent to $3,061.5 million for the 39-weeks ended June 28, 2008 compared to $2,325.6 million for the same period last year. Sales growth was $617.3 million from the Seattle Operations with the remaining sales growth coming primarily from the Company's existing customer base plus inflationary effects.
Operating income for the 2008 Period increased $5.1 million to $19.2 million compared to $14.1 million in the 2007 Period. The combination of income from the Seattle Operations plus sales growth and inventory holding gains resulting from vendor price increases all contributed to the improved performance over the prior Period. These improvements were tempered by expenses and productivity issues related to an expansion project at the Company's Northern California Distribution Center during the 2008 Period.
Year-to-date operating income and net earnings for the period ended June 28, 2008 were $50.6 million and $12.2 million compared to $43.9 million and $11.3 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, profits in the Seattle Operations and inventory holding gains resulting from vendor price increases. The costs associated with the investment in the Company's Northern California distribution network, including the closure of a warehouse and the expansion of a primary regional distribution center along with the rise in fuel costs and volatility in the equity markets, partially offset the growth in income.
"In spite of a weak economic environment, we had a very good quarter," said Al Plamann, president and chief executive officer, Unified Grocers. "We are particularly pleased with the strong results we are continuing to see from our Seattle Operations, an acquisition that has contributed positively to our bottom line since we acquired it nine months ago.
"Even without the gains from our Seattle division, we are doing well in a difficult business environment," Plamann said. "Sales are up, earnings are up and we are seeing improvements in many aspects of our business. Additionally, our wide product offering is allowing retailers to quickly adjust to changing consumer preferences at shelf level, ensuring that the right products are available at precisely the right time. Keeping pace with this changing product mix is critical, particularly in this economic environment."
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 Unified's Form 10-Q, filed with the Securities and Exchange Commission, is available on Unified's website at www.unifiedgrocers.com and at www.sec.gov/edgar.shtml.
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)
Thirteen Weeks Thirty-nine Weeks
Ended Ended
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
Net sales $1,017,055 $790,596 $3,061,507 $2,325,595
Operating
income 19,159 14,101 50,555 43,857
Earnings
before
estimate
patronage
dividends
and income
taxes 15,463 10,381 38,423 32,649
Estimated
patronage
dividends 6,976 4,034 17,135 14,121
Net
earnings $4,790 $4,315 $12,219 $11,347