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| Source: | LOHAS Weekly Newsletter |
| Published: | Wednesday, November 27, 2002 |
In its announcement, Wessanen notes that it eliminated approximately 200 positions in its U.S. divisions, and that some U.S. activities require improvement: “After sealing the partnership with Wild Oats and losing two large customers, we are faced with a major operational challenge that is vigorously taken up. Sales at Wild Oats are already surpassing expectations.” The company anticipates 4Q02 sales at its U.S. Tree of Life to be "considerably less" than 4Q01 sales.
Green Mountain Coffee 4Q02 Earnings Drop
Waterbury, Vt.-based specialty-coffee roaster Green Mountain Coffee Inc. (Nasdaq: GMCR) says its 4Q02 earnings dropped due to higher coffee prices and expenses, according to a company announcement. 4Q net income was $957,000 or $.13/share vs. $1.5 million or $.21 in 4Q01. Sales were up 5.7 percent to $21.6 million vs. $20.5 million for the same period one year ago. The company expects FY03 earnings per share (EPS) to be up 10 to 15 percent before a loss on its equity investment in Keurig Inc., a one-cup coffee machine manufacturer, which GMCR anticipates to be $.10 to $.14/share. GMCR also noted that it anticipates 1Q03 earnings of $.29 to $.31/share before the $.03 to $.04/share loss on its Keurig investment.
RBC Upgrades UNFI
Toronto, Ontario-based RBC Capital Markets analysts Carole Buyers and Edward Aaron released a company update on United Natural Foods Inc. (Nasdaq: UNFI) with an Outperform rating and an increase in price target to $30. “We believe strong internal growth, improved capacity utilization and accretion from recent acquisitions can drive 20-percent-plus earnings growth beginning as early as FY2004,” state Buyers and Aaron. “At our price target, shares trade roughly in line with historical averages and at a 15 to 20 percent premium to other companies in our healthy lifestyles universe.” The analysts applied a P/E multiple of 20x to their new estimate of $1.48 to reach the $30 price target.
The one issue that could impact these anticipated outcomes, say Buyers and Aaron, is the significant change in the business over a very short period of time. UNFI recently lost its number-two client, Wild Oats Markets Inc. (Nasdaq: OATS) to St. Augustine, Fla.-based Tree of Life and recently announced two acquisitions—Blooming Prairie, a $130 million distributor, and Northeast Cooperatives, a $120 million distributor. Despite these recent changes, RBC notes that UNFI's internal growth is robust, at approximately 15 percent or more, and the economic conditions of the market do not seem to be impacting the company. “Based on current trends,” state Buyers and Aaron, “we anticipate meaningful upside to our 1Q03 sales estimate of $291 million.”
Taglich Brothers Reinitiates Coverage on Reliv International
New York-based brokerage and equity research firm Taglich Brothers Inc. reinitiated coverage on Reliv International Inc. (Nasdaq: RELV), a supplements manufacturer, with a Speculative Buy rating and a 12-month price target of $7.68/share.
Inverness Medical Gets $55 Million Credit Deal
Washington-based Inverness Medical Innovations Inc. (AMEX: IMA) signed a $55 million credit agreement with a group of banks, according to Nov. 20 announcement. The agreement consists of a U.S. term loan of $20 million, a European term loan of $10 million and a European revolving credit line of $25 million. IMA used $44.1 million of the proceeds from the loans to prepay on its outstanding principal balance and unpaid interest on term loans with the Royal Bank of Scotland and RBA Mezzanine Ltd., which terminated those credit agreements, according to a Form 8-K filed on Nov. 19 with the Securities and Exchange Commission.
Inverness will make principal repayments of the U.S. loan in 11 quarterly installments of $1.25 million beginning April 30, 2003, through Oct. 31, 2005, with a final repayment of $6.25 million in Nov. 2005. It will repay the European loan in 14 quarterly installments of $25,000 starting Jan. 31, 2003, through April 2006, with a final repayment of $9.65 million in May 2006.
Imperial Ginseng Products Ltd. Reports 1Q03 Results
Vancouver, B.C.-based Imperial Ginseng Products Ltd. (OTC BB: IGPFF) posted 1Q03 net income of $286,417 or a loss of $.05/share on revenues of $761,513 vs. 1Q02 net income of $28,066 or a loss of $.30/share on revenues of $875,005, according to a Nov. 19 announcement.
Whole Foods Reports Strong 4Q02 Results
Whole Foods Market Inc. (Nasdaq: WFMI) reported 4Q02 net income of $22 million or $.36/share, up 38 percent from 4Q01 net income of $17.2 million or $.30/share. Sales for the quarter totaled $638 million vs. $577 million for the comparative period in 2001. WFMI attributes the increase to a weighted average year-over-year square footage growth of 16 percent and stronger-than-expected comparable store sales growth of 10.5 percent. Identical store sales increased 9.6 percent.
FY03 net income jumped 33 percent to $84.5 million or $1.40/share vs. $64.8 million or $1.15/share. FY03 sales increased 21 percent to $2.7 billion, up from $2.3 billion one year ago, and comparable store sales increased 10 percent. Identical store sales were up 8.7 percent for the year.
“In the face of the weakest economy the United States has seen in over 10 years, we produced solid top- and bottom-line results,” stated CEO John Mackey in a Nov. 19 announcement. “We delivered our twelfth consecutive quarter of 20 percent or more sales growth and our seventh consecutive quarter of comparable store sales increases over 9 percent,” he added. For stores in the comparable store base, store contribution increased 64 basis points to 10.5 percent of sales, gross profit improved 67 basis points to 35.8 percent of sales, and direct store expenses increased three basis points to 25.4 percent of sales.
Net operating profit increased 26 percent to $23.2 million and total capital increased 17 percent to $1.1 billion for 4Q02. The company opened two new stores in 4Q02, ending its fiscal year with 135 units. WFMI's future goals include maintaining its previously stated sales growth guidance of 15 to 20 percent and to increase comparable store sales to 8 to 9.5 percent in the first quarter. It will also focus on producing operating margin improvement primarily through the leveraging of direct store expenses and general and administrative expenses. It revised its diluted EPS guidance for FY03 to $1.62 to $1.69, up from $1.60 to $1.67.
Garden Fresh Reports 4Q02 and Year-End Results
Garden Fresh Restaurant Corp. (Nasdaq: LTUS), operator of the Souplantation and Sweet Tomatoes restaurants, reported 4Q02 net income of $1.6 million or $.28/share on $54.7 million in sales vs. a 4Q01 net loss of $876,000 or $.15/share on $51.6 million in net sales. For FY02, LTUS posted a $5.6 million net income or $.96/share on $214.3 million in sales, up from FY02 sales of $198.5 million and a net income of $2.4 million or $.42/share.
RiceX Releases 3Q02 Results
El Dorado Hills, Calif.-based functional foods manufacturer The RiceX Co. (OTC BB: RICX) posted a 3Q02 net loss of $265,000 or $.01/share vs. a 3Q02 net income of $411,000 or $.01/share. RICX had $2.2 million in cash as of Sept. 30, vs. $960,000 in the same period of 2001. For the nine months ending Sept. 30, RICX reported net income of $96,000 or $.00/share vs. net income of $662,000 or $.02/share for the corresponding period in 2001.