United Natural Selling Non-food Lines
The Rhode Island-based company announced it will sell its non-food lines, such as health and beauty products, to privately held L&R Distributors Inc. Terms of the deal were not disclosed.
UNFI says the move will help it focus on its core business of selling natural, organic and specialty foods to supermarkets and other retailers. It got into the non-foods lines when it bought Millbrook Distribution Services Inc. in November 2007.
L&R Distributors said the purchase will help it grow its business with supermarkets. The New York-based company sells a variety of merchandise, including bathroom scales, reading glasses, and Scotch tape, to drugstores and other retailers.
UNFI said it expects to incur restructuring and impairment charges of $11 million to $12.5 million by the end of October, as it closes a building in Harrison, Ark., cutting an unspecified number of jobs there, and makes other adjustments related to the sale. The company said it expects the deal to close in its fiscal first quarter, which covers roughly August through October.
The company lowered its per-share earnings forecast for the year to $1.55 to $1.59 per share, from $1.67 to $1.69 per share, as a result of the charges. Analysts surveyed by FactSet expect net income of $1.69 per share.
Earlier this month, the company said that third-quarter revenue had risen 22% and that net income had risen 20%.
UNFI said it expected the sale, excluding costs, to add $1.5 to $2 million to net income annually.
From the June 15, 2011, Prepared Foods' Daily News.