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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): January 14, 1999
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United Natural Foods, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
000-21531 05-0376157
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(Commission File Number) (I.R.S. Employer Identification No.)
260 Lake Road
Dayville, Connecticut 06241
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(Address of Principal Executive Offices) (Zip Code)
(860) 779-2800
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
Consolidation of Northeastern Operations
On January 14, 1999, we issued a press release announcing plans to
consolidate our northeastern operations into our Dayville, Connecticut and New
Oxford, Pennsylvania facilities and to close our Chesterfield, New Hampshire
distribution center and our Philadelphia, Pennsylvania terminal facility. A
copy of such press release is attached to this Current Report on Form 8-K as
Exhibit 99 and incorporated herein by reference.
The cost of closing the Chesterfield, New Hampshire facility and of
transferring operations to other facilities is expected to total approximately
$4,000,000. This expense includes:
. approximately $2,400,000 of additional depreciation to reflect the net
realizable value of the Chesterfield facility as well as some future
unusable assets;
. approximately $700,000 for severance and medical insurance costs;
. approximately $700,000 for retention expenses; and
. approximately $200,000 for the cost of moving inventory.
These costs are expected to be recognized on our financial books and
records during the remainder of the current fiscal year as follows:
. the additional depreciation of the Chesterfield facility and other
assets will be recognized pro rata through July 31, 1999;
. severance and medical insurance costs will be recognized in the
quarter ending January 31, 1999;
. retention expenses will be recognized pro rata in the quarters ending
April 30, 1999 and July 31, 1999; and
. the cost of moving inventory will be recognized in the quarter ending
July 31, 1999.
Accordingly, we expect to recognize a total of approximately $700,000 in
costs in the quarter ending January 31, 1999, approximately $1,550,000 in the
quarter ending April 30, 1999 and approximately $1,750,000 in the quarter ending
July 31, 1999.
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We intend to expand our New Oxford, Pennsylvania facility by 120,000 square
feet in order to accommodate the transfer of sales volume from the Dayville,
Connecticut and Philadelphia, Pennsylvania facilities. We expect that the
expansion of our New Oxford facility will enable us to service our customers in
a more efficient manner and will eliminate the need to use outside storage
facilities. This expansion is currently expected to cost approximately
$3,500,000. This expansion is expected to be financed by a reduction of
inventory safety stock and from the savings resulting from operating fewer
distribution centers.
Relocation of Seattle Facility
We currently anticipate moving our Seattle operations to Auburn, Washington
during the third quarter of Fiscal 1999. We currently expect moving costs to be
approximately $650,000.
This Current Report on Form 8-K contains forward-looking statements
relating to the timing and expected costs of relocating our Seattle facility and
the expected expense associated with closing our Chesterfield, New Hampshire
facility, the timing of expense recognition for accounting purposes, the
expected savings from closing our facility and the expected cost of expanding
our New Oxford, Pennsylvania facility, and such statements involve a number of
risks and uncertainties. Among the important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements are delays in closing our facility, problems associated with
relocating our employees to other facilities, hiring additional employees in the
remaining facilities, unexpected consolidation costs, including severance and
medical insurance costs, retention costs and costs associated with moving
inventory, competitive pressures, loss of customers, service interruptions,
general economic conditions and the risk factors detailed from time to time in
our periodic reports and registration statements filed with the Securities and
Exchange Commission, including without limitation our 10-K.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
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See Exhibit Index attached hereto.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 2, 1999 UNITED NATURAL FOODS, INC.
By: /s/ Robert T. Cirulnick
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Robert T. Cirulnick
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
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99 Press Release dated January 14, 1999.
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EXHIBIT 99
United Natural Foods Announces Savings from Regional Consolidation
DAYVILLE, Conn., Jan. 14 /PRNewswire/ -- United Natural Foods, Inc.
(Nasdaq: UNFI) today announced plans to consolidate its northeastern operations
into its Dayville, Connecticut and New Oxford, Pennsylvania facilities.
Consequently, the company will no longer operate the 110,000 square foot
Chesterfield, New Hampshire distribution center and will begin transferring
sales to the remaining facilities beginning in the spring of 1999.
The consolidation is the result of a comprehensive operations and logistics
study undertaken by consultants of KPMG Peat Marwick following United's November
1997 acquisition of Chesterfield, New Hampshire based distributor Stow Mills.
The purpose of the study was to determine the best use of the company's existing
distribution centers and to identify the most cost efficient method of serving
its approximately 3,000 customers in the northeastern United States. The study
identified annual operating savings in excess of $3.4 million by concentrating
sales volume in two instead of three distribution centers. Savings will accrue
from elimination of redundant facility costs, lower fleet and transportation
costs, inventory reduction, and reduced employee staffing levels.
Approximately half of the projected savings are expected to begin to be
realized upon the transfer of sales out of the Chesterfield, New Hampshire
facility, which is expected to be completed by mid-summer 1999. The company is
expanding the New Oxford, Pennsylvania facility by 120,000 square feet in order
to accommodate the remaining transfer of sales volume. This expansion is
expected to be complete by 1999 year-end and will enable the remaining savings
to be realized starting in January 2000.
The approximately 150 affected full-time employees of the Chesterfield, New
Hampshire facility are being offered similar positions at United's remaining
distribution centers in Dayville, Connecticut; New Oxford, Pennsylvania; Denver,
Colorado; Atlanta, Georgia; Auburn, California; and Seattle, Washington. Those
employees who choose not to relocate will be offered a comprehensive transition
assistance program.
Commenting on the consolidation strategy, Norman Cloutier, Chairman and
Chief Executive Officer said "No matter how significant the operational savings
may be or how compelling the consolidation strategy, moving jobs out of the
Chesterfield community is the most painful aspect of strengthening United
Natural Foods. It is
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difficult to accept that many of our valued, respected and skilled colleagues
may have to leave the company and we are very grateful for all that they have
contributed over the past years. I hope that the majority of Chesterfield, New
Hampshire employees will continue with United and share the rewards of building
a great and growing company in the future."
This press release contains forward-looking statements. Actual results may
differ materially from those projected in the forward-looking statements.
Additional information concerning factors that could cause actual results to
materially differ from those in the forward-looking statements is contained in
the Company's SEC filings, including its periodic reports filed under the
Securities Exchange Act of 1934, as amended (copies of which are available upon
request from the Company's investor relations department).
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