Unified’s $17.6M Loss a ‘Course Correction’ for Future Growth

Unified Grocers, Inc.'s drop in annual sales and net loss for the year were necessary evils in preparing the regional wholesale cooperative grocery distributor for future success.

“This was a year of transition, course corrections and establishing a solid foundation for growth,” said Bob Ling, president and CEO, Unified Grocers. Ling, who has been president of Los Angeles-based Unified since June, 2011, succeeded Al Plamann as CEO effective May 1, 2013.

“We have a strong leadership team in place and a plan that gives us a clear understanding of where the company is headed and how we’re going to improve sales and profits,” Ling continued. “The fourth quarter was particularly encouraging in terms of establishing growth momentum. Sales trends are improving, we have solid performance in our core operations and all of our important business fundamentals are headed in the right direction.”

For the fiscal year ended Sept. 28, Unified reported net sales of $3.7 billion, a decrease of 1.9 percent compared to the prior fiscal year ended Sept. 29. The wholesaler reported a net loss of $17.6 million, compared to earnings of $2 million for the same period in 2012.

According to Ling, the year-end financials are in line with Unified’s expectations, given the previously announced actions the company took on some issues, which included a fee for the early extinguishment of senior secured notes ($9.8 million) which provides greater flexibility in day-to-day operations and lower ongoing borrowing costs; an increase in workers’ compensation reserves for claims exposure ($9.1 million); and disposal costs related to leases and equipment ($2.5 million).

“I see similar positive signs for our retailers,” Ling added. “While some are experiencing ups and others downs, a significant number invested in the future growth and success of their businesses in 2013 by remodeling stores and in some cases opening new locations. This is an indication of confidence regarding future business prospects for independent retail grocers.”

Founded in 1922, Unified Grocers supplies independent retailers throughout the Western United States.