Unified Grocers this week reported improved sales and operating income for its third quarter of fiscal year 2014 ended June 28 and for the year to date.
The Commerce, Calif.-based wholesaler reported gross billings of $2.882 billion for the year, compared to gross billings of $2.778 billion for the same period last year (a 3.7 percent increase). Similarly, the company reported gross billings of $983 million for the quarter, compared to gross billings of $939 million for the third quarter of fiscal 2013 (a 4.7 percent increase). Net sales for the quarter and year to date were 2.3 percent and 1.7 percent higher than last year.
This performance reflected ongoing improvement in the company’s core business.
“We are extremely pleased by the continued growth in sales and profitability,” said Bob Ling, president and CEO of Unified Grocers. “A lot of work has gone in to turning around the business and establishing positive momentum, and that is clearly paying off within our core business.”
The company’s operating income was $11 million, an improvement of $8.3 million on a year-to-date basis. This improvement is in spite of a net loss for the quarter due to an increase in non-cash reserves of $7.5 million in the company’s insurance segment. The increase in non-cash reserves was driven by continued adverse claims development and the challenging California workers’ compensation marketplace.
Speaking of the insurance segment, Ling said, “We have undertaken significant changes to improve the business over the past year, including replacement of personnel, re-examination of our outstanding claims and new claims handling processes, but the impact of those changes has not yet been fully realized.”
The company’s wholesale distribution segment showed increases in gross billings of $45.2 million for the quarter (a 4.8 percent increase) and $106.2 million on a year-to-date basis (a 3.8 percent increase). These gains, along with cost control and improved efficiencies, helped the wholesale distribution segment achieve an operating income of $6.1 million for the quarter (an increase of $2.6 million over the third quarter of fiscal 2013) and $17.4 million on a year-to-date basis ($9.5 million over fiscal 2013 through three quarters).
“Our core wholesale distribution business is strong, both from a sales and profitability standpoint,” Ling continued. “The most recent quarter’s results demonstrate the company’s strong fundamentals. We are positioned to generate future sales and earnings growth, have reduced our debt and our liquidity remains strong.”