United Natural Foods, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the UNFI Fiscal 2021 Third Quarter Earnings Conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. If you require any further assistance, please press star 0. I'd now like to hand the conference over to Mr. Stephen Blomquist, Vice President, Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us on UNFI's third quarter fiscal 2021 earnings conference call. By now you should have received a copy of the earnings release issued this morning. The press release webcast and a supplemental slide deck are available under the investor section of the company's website at www.unfi.com under the events tab. Joining me for today's call are Steve Spinner, our Chairman and Chief Executive Officer, John Howard, our Chief Financial Officer, Chris Testa, President of UNFI, and Eric Dorn, our Chief Operating Officer. Steve, Chris, and John will provide a business update, after which we'll take your questions. Before we begin, I'd like to remind everyone the comments made by management during today's call may contain forward-looking statements. These forward-looking statements include plans, expectations, estimates, and projections that might involve significant risks and uncertainties. These risks are discussed in the company's earnings release and SEC filings. Actual results may differ materially from the results discussed in these forward-looking statements. And lastly, I'd like to point out that during today's call, management will refer to certain non-GAAP financial measures. Definitions and reconciliations to the most comparable GAAP financial measures are included in our press release. I will now turn the call over to Steve.

Thanks, Steve. Good morning, everyone, and thank you for joining us on our fiscal 2021 third quarter earnings call. As you saw in this morning's press release, we delivered another quarter of outstanding financial results. Third quarter sales were over $6.62 billion. Third quarter adjusted EBITDA was $179 million. And third quarter adjusted EPS was 94 cents. All were in line with our internal expectations and keep us on track to deliver our full year fiscal 2021 guidance and record EBITDA year following 2020, which was positively influenced by the onset of COVID-19. We also reduced our outstanding net debt by $62 million in the quarter. From a year-over-year basis, you'll recall that last spring was truly an unprecedented time in the food industry. And we indicated on our last call, we would not positively cycle last year's third quarter in which our customers benefited tremendously from the stock up buying that took place as the COVID pandemic began to spread. But we're very pleased with our strong performance this quarter, which maintains the momentum building across our business. First and foremost, our team delivered. Our 28,000 associates across the U.S. and Canada adjusted, learned, grew, and executed for our customers. We care deeply about our role in ensuring that food continues to move, and our results demonstrated just that. This quarter's results again validate the work we are doing to both make our customers stronger and to drive shareholder value. we know it all begins with the simple yet powerful idea of what unify can do to make our customers more successful our data analytics and cross-selling capabilities position our customers to quickly pivot to sell more of what today's consumer wants our private brands help them offer desirable differentiated products to their shoppers at great prices Our services lower their expense structure and makes running their business easier. And our innovation is continually looking forward and asking the critical questions of what's next, followed by what will UNFI do to bring it to our customers in the easiest possible way? One of the larger industry dynamics is the return of cost inflation, which up until now has been relatively benign. As many of you know, UNFI has historically benefited from inflation based on the structure of our business model. In addition, we expect a tailwind from the return of CPG promotional dollars, which over the past 12 months have been considerably lower than historical levels. During that timeframe, large manufacturers have been able to sell their products without the need for regular promotions. which has begun to reverse as suppliers more aggressively promote their products to consumers with more choices as overall product availability improves. Another important topic has been the challenges around hiring and retaining associates. One of our most important core beliefs has always been to do the right thing, which includes continuously and proactively looking for ways to keep UNFI as an employer of choice. This includes looking at ways to create better work-life balance, our commitment to diversity and inclusion, and our relentless focus on safety. With June being National Safety Month, we are launching a new framework and rally cry for workplace safety that will drive safety culture even further to move us closer to our ultimate goal of zero injuries. We will be flexible. We will compensate our team fairly, and we will be creative and proactive as our workforce initiatives continue to evolve. We'll have more to say about these topics in two weeks as part of our investor day. In addition, we're always making sure our compensation levels are competitive. And to that end, we've adjusted wage scales in many of our markets over the past 12 months which has led to greater stability in our workforce. We're seeing improved productivity and decreased overtime offsetting these wage increases, which has allowed us to maintain consistent operating expense rates. In addition, we've continuously been investing in automation to improve throughput and order accuracy while easing the local challenges around available workforce. Over the past 12 months and through the balance of the year, we'll continue to make meaningful investments in two, soon to be three, automated facilities, and we'll continue to look for further opportunities to use technology where the business case makes sense. We'll provide additional color around our updated growth strategy and longer-term financial outlook in a couple of weeks at our June 24th Investor Day. As you read in the press release, the event will be virtual and include a live Q&A session following commentary from many of our leaders. We're hoping you can join us. Fiscal 2020 was a record year for UNFI in terms of sales and adjusted EBITDA. And fiscal 2021 is expected to be even stronger. We believe the factors I just spoke to, as well as the onboarding of Key Foods Northeast stores and the pipeline business Chris will address, will contribute to fiscal 2022 being another record year. Let me now turn the call over to Chris to provide more context on our business performance.