LOS ANGELES, May 13, 2009 (GLOBE NEWSWIRE) -- Unified Grocers ("Unified" or the "Company"), the largest wholesale grocery distributor in the western United States, reported an increase in net earnings during the second quarter of fiscal 2009, despite softness in sales.
Unified reported net sales of $951.7 million for the quarter ended March 28, 2009 ("2009 period"), as compared to $991.9 million for the fiscal quarter ended March 29, 2008 ("2008 period"). The overall sales decline of $40.2 million, or 4.1% over the 2008 period, was driven by the transition of a major customer of the former Associated Grocers ("Seattle") to another wholesaler as that customer emerged from bankruptcy. Easter occurring in the 2nd quarter of 2008 versus the 3rd quarter of 2009 and a softer economy also contributed to the decline. These factors were somewhat offset by continued growth in the Company's specialty division with sales up more than $10 million. Unified's year-to-date sales were $1,996.9 million for the 26 weeks ended March 28, 2009, compared to $2,044.5 million for the same period last year, or a 2.3% decline. Year-to-date sales in fiscal 2009 increased $7.9 million if the impact of the major customer transition is excluded.
Operating income for the 2009 period was $6.8 million, compared to $8.9 million for the 2008 period. The decline in income is primarily related to lower sales, the conversion of Seattle customers to membership in the cooperative that qualifies them for Member pricing, and to lower inventory holding gains resulting from vendor price increases. This was offset somewhat by the continued strong performance of the Company's specialty division and declines in the equity markets that were smaller than those recorded in 2008.
Earnings after patronage dividends (net earnings) were $2.5 million for the 2009 period, as compared to $1.3 million for the 2008 period, resulting primarily from favorable results from the specialty division, whose earnings are retained by the Company, and declines in the equity market smaller than those recorded in 2008.
Year-to-date operating income and net earnings for the period ended March 28, 2009 were $26.6 million and $6.3 million compared to $31.4 million and $7.4 million in the same period last year. Performance was impacted by lower sales, conversion of the Seattle customers to membership, and investment declines tied to the equity market that were larger than in the 2008 period.
"We are experiencing softness in sales, a condition that may continue, but we also see our retailers adapting to changing consumer purchasing patterns. I am confident in their ability to navigate through these tough times," said Al Plamann, president and chief executive officer, Unified Grocers. "While our overall sales volume is down, earnings remained strong due to continued growth in our specialty products division.
"We continue to respond to this challenging business environment by making mid-year adjustments to our sales and marketing approaches in each of our geographic regions, continuing to refine and improve the efficiency of our distribution network and remaining vigilant in our efforts to reduce costs and expenses," Plamann said. "Our liquidity remains strong, and we are positioned to help our retailers capitalize on new opportunities that may be emerging from this challenging business 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 $4.1 billion in sales during fiscal 2008, offer independent retailers all the resources they need to compete in the supermarket industry.
The Unified Grocers, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=1214
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.
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 Twenty-six
Weeks Ended Weeks Ended
March 28, March 29, March 28, March 29,
---------- ---------- ---------- ----------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Net sales $951,695 $991,895 $1,996,914 $2,044,452
Operating income 6,845 8,927 26,620 31,396
Earnings before
patronage dividends
and income taxes 4,103 4,898 20,268 22,960
Patronage dividends (724) 1,795 9,264 10,159
Net earnings $2,453 $1,259 $6,313 $7,429