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LOS ANGELES -- Gross margin improvements and cost controls enabled retailer-owned wholesale grocery distributor Unified Western Grocers, Inc. to grow net earnings 9.5 percent in the face of flat sales for its second fiscal quarter.
UWG saw a 0.8 percent drop in sales for the fiscal quarter ended July 2 -- primarily due to the acquisition of one of its customers by a competitor who manufactures and distributes its own products. This decrease, from $721.1 million during the 2004 period as compared to $715.4 million during the 2005 period, was partially offset by the opening of new stores by existing members.
Still, the cooperative achieved net earnings of $2.5 million for the 2005 period, and earnings year-to-date totaled $8.5 million versus $5.5 million in the previous year -- 56.3 percent increase.
"Although sales for the quarter were essentially flat, net earnings were nearly 10 percent higher than they were a year ago," said Al Plamann, president and c.e.o., of UWG. "This was due largely to a continued focus on productivity enhancements and improvements to our distribution network."
The wholesaler's earnings and operations performance generated cash flow from of approximately $30.3 million for the 39 weeks ended July 2, and contributed to the its ability to reduce debt during that period. Unified reduced its total outstanding debt to $167.7 million at July 2 from $201.3 million at October 2, 2004, the end of its prior fiscal year.