Good afternoon and welcome to our annual meeting of stakeholders. I am Mahrukh Hussain, General Counsel and Corporate Secretary of United Natural Foods, Inc. In accordance with the company's bylaws, I will be serving as Secretary of the meeting. In the interest of having an orderly and constructive meeting today, please review the meeting guidelines and rules of conduct posted on the online meeting portal. I would now like to introduce Jack Stahl, Independent Chair of the Board of Directors of UNFI. In accordance with the company's bylaws, Jack will serve as Chairperson of the meeting. Jack?
Thank you, Mahrukh. Good afternoon. It's my pleasure to welcome you to our annual meeting of stakeholders. We're very pleased you could join us today, and the meeting is now called to order. I would like to begin by introducing the other current board members of the company's Board of Directors in attendance for the meeting. I will ask that each director acknowledge their presence as I call his or her name. Lynn Blake?
Hi, Jack. I'm here. Thank you.
Thank you, Lynn. Gloria Boyland?
Good afternoon. I'm here.
Thank you, Gloria. Daphne Dufresne?
Good afternoon. Present.
Thanks, Daphne. Michael Funk?
Thanks, Jack. I'm here.
Thank you, Michael. Jim Loree?
Thanks, Jack. I'm here.
Thank you. Shamim Mohammed?
Good afternoon. Thank you, Jack. I'm here.
Thank you, Shamim. Jim Muehlbauer?
Good afternoon, Jack. I'm here.
James Pappas?
Thanks, Jack. I'm here.
Thank you, and Sandy Douglas, our CEO and Director?
Jack, I'm present.
Thank you, Sandy. Let me just take this opportunity at the outset to thank all the board members and Sandy in his role as CEO as well. Thank you very much for all that you put into the company. In addition, the following officers of the company are present and will also be available to answer questions. And I'll ask each of the officers to acknowledge their presence. Matteo Tarditi, our President and Chief Financial Officer?
Good afternoon, Jack. I'm here.
Thank you, Matteo. Danielle Benedict, our Chief Human Resources Officer?
Good afternoon, Jack. Here.
Thanks, Danielle. Matt Echols, Chief Corporate Affairs Officer?
Good afternoon, Jack. I'm here.
Thanks, Matt. Louis Martin, who is President of Conventional Growth Grocery Products and UNFI Chief Commercial Officer?
Good afternoon, Jack. I'm here.
Thank you, Louis. Mark Bushway, President of our Natural Organic Specialty and Fresh Products and UNFI Chief Supply Chain Officer.
Good afternoon, Jack. I'm here.
Very good. And David Williamson, CEO of Retail?
Good afternoon, Jack. I'm here too.
Thank you, David. Okay. Along with us also today are our representatives of our auditors, KPMG LLP, Kari Persion, and Tony Gahn. Kari and Tony, are you here?
Hi, Jack. We're here.
Hi, Jack.
Very good. Thank you for all the support that you provide us as well. I will now ask Mahrukh Hussain, the Secretary of the meeting, to review the business to be brought before the meeting today. Mahrukh?
Thank you, Jack. All stakeholders of record as of the close of business on the record date, which was October 22nd, 2025, are invited to attend. Following the business portion of the meeting, we will be answering questions related to the substance of our proposals submitted through the online meeting portal, which enables our stakeholders to have access to our Board of Directors, management team, and representatives from KPMG. If you would like to ask a question, please submit your question in the Ask a Question text box on the online meeting portal and click submit. Please limit yourself to one question. A webcast replay of the annual meeting will be posted online for a period of one year at www.virtualshareholdermeeting.com/unfi2025am. This year, we have appointed Jim Raitt from American Election Services to serve as Inspector of Elections for the meeting. He has taken the required oath of office.
After the voting polls are closed, we will adjourn the official business portion of the meeting. Sandy Douglas will offer some remarks and then address any questions from stakeholders that were not addressed in connection with the proposals. After the question-and-answer session, we will announce the preliminary voting results. The meeting was called to vote on the following proposals. Proposal number one: to elect 10 nominees as directors to serve until the next annual meeting of stakeholders. Proposal number two: to ratify the selection of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ending August 1st, 2026. Proposal number three: to approve on an advisory basis our executive compensation. Proposal number four: to approve the Fifth Amended and Restated 2020 Equity Incentive Plan.
Since no director nominations or other stakeholder proposals were filed in advance of this meeting in accordance with the requirements of the company's bylaws, the business of this meeting is limited to the four proposals I just described. The polls for the matters upon which stakeholders may vote at this meeting are now open and will remain open until the business items on the agenda are concluded or until the announcement that the polls are closed. If you have already voted by mail, telephone, or the internet, you do not need to take any further action. Stakeholders of record who have not previously voted or who wish to change their earlier vote may vote now by clicking the Vote Here button on the online meeting portal and following the instructions on the voting window that will open.
You must be logged in under your 16-digit control number to vote in this manner. That number can be found on the Notice of Proxy Availability the company sent to you on or about November 5th, 2025. If you do vote now, any prior vote cast by you will automatically be revoked and overwritten. We will announce the preliminary results of the voting on the proposals being presented for stakeholders' approval near the end of the meeting following the presentation and question-and-answer session. The company has received an affidavit from the company's proxy mailing agent, Broadridge Financial Solutions, Inc., certifying that beginning on November 5th, 2025, the Notice of Annual Meeting of Stakeholders was sent and the proxy statement, proxy card, and annual report to stakeholders was made available to all holders of record of common stock as of the close of business on October 22nd, 2025.
This affidavit will be incorporated into the minutes of this meeting. Additionally, the list of stakeholders of record as of the close of business on October 22nd, 2025, who are entitled to vote at this meeting, showing their respective addresses and the number of shares held by each, has been available for examination during the period of the last 10 days and is available at this meeting for inspection by the stakeholders. The Inspector of Elections has previously received a list of stakeholders entitled to vote at this meeting. The company has been informed by Broadridge as tabulator of the votes that as of this afternoon, proxies representing more than 86.05% of the 60,931,668 shares of the company's outstanding common stock eligible to vote as of the record date have, in fact, been received.
Therefore, I confirm that we have a sufficient number of shares represented at this meeting and declare that a quorum is present. We have four items on our agenda today, and each of these four proposals is explained in detail in our proxy statement that was made available to all stakeholders of record. Shortly after I present these matters, the polls will be closed. So if you have not already done so, please vote now. As a reminder, if you have already voted, you do not need to vote again in the online meeting portal. The first matter to be voted on by the stakeholders is the election of Lynn S. Blake, Gloria R. Boyland, J. Alexander Miller Douglas, Daphne J. Dufresne, Michael S. Funk, James M. Loree, Shamim Mohammed, James L. Muehlbauer, James C.
Pappas, and Jack Stahl as directors, each to serve until the next annual meeting of stakeholders and until their successors are elected and qualified. The board unanimously recommends that the stakeholders vote for the election of each of the director nominees. The second matter to be voted on by the stakeholders is the ratification of the selection of KPMG LLP as the independent registered public accounting firm of the company for the fiscal year ending August 1st, 2026. The board unanimously recommends that the stakeholders vote for ratification of the selection of KPMG as our independent registered public accounting firm for fiscal 2026. The third item of business to come before the meeting is an advisory non-binding vote on the following resolution regarding executive compensation.
Resolved that the compensation paid to the company's named executive officers, as disclosed pursuant to item 402 of Regulation S-K, including the compensation discussion and analysis, compensation tables, and narrative discussion, is hereby approved. This proposal is commonly referred to as a say-on-pay resolution. The board unanimously recommends that stakeholders vote for the advisory approval of our executive compensation. The final matter to be voted on by the stakeholders is the approval of the company's Fifth Amended and Restated 2020 Equity Incentive Plan. The board unanimously recommends that stakeholders vote for the Fifth Amended and Restated 2020 Equity Incentive Plan. Let me pause now and ask the company's associates who are monitoring questions for the online meeting portal if there are any questions related to the substance of these proposals that have been submitted at this time.
It may take a few moments while we compile any questions that have been submitted. At this time, there are no questions related to these proposals. As provided by the majority vote standard in our bylaws, each nominee for director will be elected as a director if the number of shares voted for the director exceed the number of shares voted against the director. Each of Proposal 2, Proposal 3, and Proposal 4 will be approved if those proposals receive the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and voting on the proposal. As a reminder, if you previously voted, you do not need to vote again. If you wish to vote online, please do so now as the polls are about to close. This concludes the official business on the agenda for this meeting.
The polls are now closed as of 3:42 PM Eastern. The votes will now be tabulated, and I will announce the preliminary results of the voting at the end of the meeting. There being no further business to come before the meeting, the formal business portion of the meeting is hereby adjourned. Sandy Douglas will now make a few comments, and then we will conduct the question-and-answer portion of the meeting. Sandy, over to you.
Thanks, Mahrukh. Fiscal 2025 was the first full year of executing our refresh strategy, which is focused on adding value for our customers and suppliers while becoming a more effective and efficient company. Our full-year financial performance and results were in line with or above the initial guidance ranges we provided for our key financial metrics. Our solid performance last year, driven by the strength of our customers and their resilience, has bolstered our confidence in this strategy, and we've accelerated the multi-year objectives we were committed to achieving against an evolving operating backdrop. We remain focused on earning a higher share of business within a growing $90 billion target market that includes natural, organic, specialty, multicultural, and conventional grocery retailers who can benefit from the differentiated products, programs, and services that we offer today.
We're working hard to strengthen and develop new capabilities to help them better compete and execute their unique business strategies. At the same time, we are well positioned to help our suppliers build their brands and accelerate their growth within our large, diverse retailer network. We took several strategic steps in fiscal 2025 to become a more effective and efficient company. We consolidated four distribution centers into more modern facilities that offer greater assortment options to customers while lowering our overall operating costs. We strategically invested in automation and new, larger facilities in select markets to support growth and bring enhanced capabilities to customers. In addition, we deployed Lean Daily Management more broadly across our network, ending the most recent quarter with lean in place at 34 distribution centers.
Combined with an elevated focus on managing working capital, we generated free cash flow that allowed us to reduce year-end debt to its lowest level since 2018. Our strategy and execution continue to deliver results in line with the expectations we've set. Our new fiscal year is off to a solid start as we grew growth, Adjusted EBITDA, and free cash flow meaningfully above last year's first quarter. While we've made progress, we know the improvement opportunities in front of us are great, and we're striving to get better every day so we can bring value to all stakeholders: customers, suppliers, associates, and shareholders. Just last week, we gave the investment community a deeper look into our strategy and the leaders who are executing the various initiatives that will shape our future, which we believe is bright.
I also hope you all had an opportunity to review our fiscal 2025 impact report that we published in November, which outlines how we are progressing against our key sustainability focus areas to help support and drive our business strategy. We appreciate the trust you place in us with your capital. We hope everyone has a happy and healthy holiday season, and we look forward to continuing to communicate with you, our shareholders. We will now turn to the question-and-answer portion of the meeting. Members of the management in attendance, Mr. Stahl, our Independent Chair, other directors, as may be applicable, and the representatives of KPMG who are present with us today will answer questions submitted through the online meeting portal that were not addressed in connection with the proposals.
If you'd like to ask a question through our online portal, please submit your question in the Ask a Question text box on the online portal and click Submit. Let me ask the company associates who are monitoring questions for the virtual meeting if there are any questions that have been submitted at this time. Mahrukh, are there any stakeholder questions?
Thanks, Sandy. We have received the following question. How can we have two years of losses? What different initiatives are you pursuing to achieve durable profits?
Yeah, thanks, Mahrukh. In both of the past two fiscal years, we've incurred costs and charges for strategic actions that we believe better position us to execute our strategy and improve future free cash flow. These losses are primarily driven by either non-cash depreciation amortization and non-cash impairments or expenses with short payback horizons, as demonstrated by the $239 million of free cash flow generated in fiscal 2025 versus a GAAP loss in comparison and in parallel. For example, we incurred charges related to the optimization of our Allentown DC and the mutually agreed upon exit from this customer contract. This fiscal year 2025 action is already benefiting profitability and free cash flow in fiscal year 2026. At our investor day event last week, we discussed several capabilities that we're focused on to drive value for our customers and suppliers and make us more effective and efficient.
If you haven't already, I encourage you to watch the replay, which is available on our website. Mahrukh, are there additional questions?
Yes, Sandy. There's one additional question that has come in. Give me one second. The question is, how is the company adapting to the onset of the MAHA movement and accompanying directives from Washington?
Sure. I'm happy to discuss that. There continues to be a lot of dialogue around policies to help encourage more healthy consumption, and we view this as part of a broader trend among consumers already occurring that's been going on for a number of years. And it's a trend that we embrace as we continue to follow consumers and customers and the demand they create in the marketplace. Mahrukh, are there any other questions?
I'm checking, Sandy. Give me one moment. Sandy, there are no other questions at this time.
Okay. Thanks, Mahrouq. That concludes our Q&A session. Now, let me ask you as secretary of the meeting to provide the preliminary voting results.
Thanks, Sandy. The results have been preliminarily tabulated. We have received the preliminary report of Broadridge as tabulator of the votes, and Mr. Raitt made his report as inspector of elections. According to the preliminary report, a quorum is and has been in attendance at this annual meeting of stakeholders for all purposes. Each of the nominees for director received more votes for the director's election than against his or her election. Accordingly, subject to the final tabulation of votes, those persons nominated for director are duly elected as directors of the company to hold office until the next annual meeting of stakeholders and until their successors are duly elected and qualified. In addition, each of the proposals two, three, and four have been approved by the stakeholders. Accordingly, subject to the final tabulation of votes, I declare that these proposals have been approved.
The results of the voting will be incorporated into the minutes of the meeting. We will formally announce the final results of the vote in a Form 8-K that the company will file with the SEC within four business days. Jack, I will now turn it back to you to close out the meeting.
Thank you, Mahrukh. I appreciate it very much. And, Sandy, thank you. Ladies and gentlemen, thank you very much for attending this year's annual meeting of stakeholders and for your continued interest and support of United Natural Foods. Have a great day and a great holiday season. Thank you so much.
This now concludes the meeting. Thank you for joining, and have a pleasant day.