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UNFI's Second Quarter Sees Soaring Sales

DAYVILLE, Conn. -- Natural and organic food distributor United Natural Foods, Inc. (UNFI) here posted net sales of $830.7 million for the second quarter of fiscal 2008 ended Jan. 26, 2008, a rise of about $162.1 million, or 24.2 percent, from the $668.5 million of net sales reported in the year-ago period.

Excluding the effect of the company's November 2007 acquisition of Millbrook Distribution Services, Inc., net sales grew $89.8 million, or 13.4 percent, to $758.3 million.

UNFI reported net income of $9.1 million, or 21 cents per share, for the second quarter. The company estimates that Millbrook, which was acquired during the second quarter, adversely affected net income by about $3.3 million, or eight cents per share, during that period.

Operating expenses for the quarter came to $135.1 million, or 16.3 percent of net sales, vs. $102.6 million, or 15.4 percent of net sales, last year. The quarter's operating expenses were negatively affected by $0.7 million in expenses related to start-up activities at the distributor's Portland, Ore. distribution center, which opened in December 2007.

Additionally, UNFI said it is continuing to experience startup inefficiencies at its Sarasota, Fla and Portland, Ore. warehouses, which resulted in lower operating margins for the quarter. The company explained that it normally achieves optimum efficiencies from new facilities within six to nine months of their opening.

"Our sales to independents continued to strengthen during the quarter, resulting in comparable growth of approximately 11 percent, while our sales to supermarkets increased by 81 percent as a result of Millbrook's customer mix," noted president and c.e.o. Michael Funk in a statement. "As we look forward to the rest of fiscal 2008, we remain focused on expanding our presence in specialty foods, and driving synergies from our recent acquisition. We believe that there are significant opportunities to expand and improve our specialty foods operations as we work to further integrate Millbrook into the company."

UNFI carries and distributes over 40,000 products to more than 18,000 customers nationwide. The company serves a wide variety of retail formats including conventional supermarket chains, natural product superstores, independent retail operators, and the foodservice channel.
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