Performance Food Group Company Reports Fourth-Quarter and Full-Year Fiscal 2023 Results
- Total case volume grew 2% in Q4
- Net sales increased 2% to $14.9 billion in Q4
- Gross profit improved 12% to $1.7 billion in Q4
- Net income increased to $150.1 million in Q4
- Total case volume grew 6% for the full fiscal year
- Net sales increased 13% to $57.3 billion for the full fiscal year
- Gross profit improved 19% to $6.3 billion for the full fiscal year
- None.
Strong Independent Organic Case Growth, Double Digit Gross Profit Growth and Strong Cash Flow; Announces Fiscal 2024 Outlook
Fourth-Quarter Fiscal 2023 Highlights
-
Total case volume grew
2% -
Net sales increased
2% to$14.9 billion -
Gross profit improved
12% to$1.7 billion -
Net income increased to
$150.1 million -
Adjusted EBITDA increased
8% to$385.2 million -
Diluted Earnings Per Share (“EPS”) increased to
$0.96 -
Adjusted Diluted EPS increased
7% to$1.14
Full-Year Fiscal 2023 Highlights
-
Total case volume grew
6% -
Net sales increased
13% to$57.3 billion -
Gross profit improved
19% to$6.3 billion -
Net income increased to
$397.2 million -
Adjusted EBITDA increased
34% to$1.4 billion -
Diluted EPS increased to
$2.54 -
Adjusted Diluted EPS increased
49% to$3.88 -
Cash flow from operating activities of
$832.1 million -
Free cash flow of
$562.4 million
“PFG closed out fiscal 2023 with strong financial results and solid momentum as our organization continues to execute at a high level. Our company is seeing broad-based strength across all three reportable segments, particularly in our high margin, high return businesses. Organic independent restaurant case growth of
Fourth-Quarter Fiscal 2023 Financial Summary
Total organic case volume increased
Net sales for the fourth quarter of fiscal 2023 grew
Gross profit for the fourth quarter of fiscal 2023 grew
Operating expenses rose
Net income for the fourth quarter of fiscal 2023 increased
For the quarter, Adjusted EBITDA rose
Diluted EPS increased
Full-Year Fiscal 2023 Financial Summary
Total case volume increased
Net sales for fiscal 2023 grew
Gross profit for fiscal 2023 grew
Operating expenses rose
Net income for fiscal 2023 increased
For fiscal 2023, Adjusted EBITDA rose
Diluted EPS increased
Cash Flow and Capital Spending
In fiscal 2023, PFG provided
In fiscal 2023, PFG invested
Share Repurchase Program
On November 16, 2022, the Board of Directors authorized a new share repurchase program for up to
Fourth-Quarter Fiscal 2023 Segment Results
In the first quarter of fiscal 2023, the Company changed its measure of segment profit to Adjusted EBITDA as this is the metric reported to the Company’s management for purposes of reviewing operating results and making decisions about allocating resources. Adjusted EBITDA is defined as net income before interest expense, interest income, income taxes, and depreciation and amortization, and excludes certain items that the Company does not consider part of its segments’ core operating results, including stock-based compensation expense, changes in the LIFO reserve, acquisition, integration and reorganization expenses, and gains and losses related to fuel derivatives.
Foodservice
Fourth-quarter fiscal 2023 net sales for Foodservice decreased
Fourth-quarter fiscal 2023 Adjusted EBITDA for Foodservice increased
Vistar
For the fourth quarter of fiscal 2023, net sales for Vistar increased
Fourth-quarter fiscal 2023 Adjusted EBITDA for Vistar increased
Convenience
Fourth-quarter fiscal 2023 net sales for Convenience increased
Fourth-quarter fiscal 2023 Adjusted EBITDA for Convenience decreased
Fiscal 2024 & Long-Term Outlook
For the fiscal first quarter of 2024, PFG expects net sales to be in a range of
For the full fiscal year 2024, PFG expects net sales to be in a range of
PFG reiterates its previously announced 3-year net sales and Adjusted EBITDA targets. The Company continues to expect to achieve annual net sales of
PFG’s Adjusted EBITDA outlook excludes the impact of certain income and expense items that management believes are not part of underlying operations. These items may include, but are not limited to, loss on early extinguishment of debt, restructuring charges, certain tax items, and charges associated with non-recurring professional and legal fees associated with acquisitions. PFG’s management cannot estimate on a forward-looking basis the impact of these income and expense items on its reported net income, which could be significant, are difficult to predict, and may be highly variable. As a result, PFG does not provide a reconciliation to the closest corresponding GAAP financial measure for its Adjusted EBITDA outlook. Please see the “Forward-Looking Statements” section of this release for a discussion of certain risks to PFG’s outlook.
Conference Call
As previously announced, a conference call with the investment community and news media will be webcast today, August 16, 2023, at 9:00 a.m. Eastern Time. Access to the webcast is available at www.pfgc.com.
About Performance Food Group Company
Performance Food Group is an industry leader and one of the largest food and foodservice distribution companies in
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.
Such forward-looking statements are subject to various risks and uncertainties. The following factors, in addition to those discussed under the section entitled Item 1A. Risk Factors in PFG’s Annual Report on Form 10-K for the fiscal year ended July 2, 2022 filed with the Securities and Exchange Commission (the “SEC”) on August 19, 2022, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, could cause actual future results to differ materially from those expressed in any forward-looking statements:
- economic factors, including inflation or other adverse changes such as a downturn in economic conditions or a public health crisis, negatively affecting consumer confidence and discretionary spending;
- our reliance on third-party suppliers;
- labor relations and cost risks and availability of qualified labor;
- costs and risks associated with a potential cybersecurity incident or other technology disruption;
- our reliance on technology and risks associated with disruption or delay in implementation of new technology;
- competition in our industry is intense, and we may not be able to compete successfully;
- we operate in a low margin industry, which could increase the volatility of our results of operations;
- we may not realize anticipated benefits from our operating cost reduction and productivity improvement efforts;
- our profitability is directly affected by cost inflation and deflation and other factors;
- we do not have long-term contracts with certain customers;
- group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations;
- changes in eating habits of consumers;
- extreme weather conditions, including hurricane, earthquake and natural disaster damage;
- volatility of fuel and other transportation costs;
- our inability to adjust cost structure where one or more of our competitors successfully implement lower costs;
- our inability to increase our sales in the highest margin portion of our business;
- changes in pricing practices of our suppliers;
- our growth strategy may not achieve the anticipated results;
- risks relating to acquisitions, including the risk that we are not able to realize benefits of acquisitions or successfully integrate the businesses we acquire;
- environmental, health, and safety costs, including compliance with current and future environmental laws and regulations relating to carbon emissions and climate change and related legal or market measures;
- our inability to comply with requirements imposed by applicable law or government regulations, including increased regulation of electronic cigarette and other alternative nicotine products;
- a portion of our sales volume is dependent upon the distribution of cigarettes and other tobacco products, sales of which are generally declining;
- the potential impact of product recalls and product liability claims relating to the products we distribute and other litigation;
- adverse judgments or settlements or unexpected outcomes in legal proceedings;
- negative media exposure and other events that damage our reputation;
- decrease in earnings from amortization charges associated with acquisitions;
- impact of uncollectibility of accounts receivable;
- increase in excise taxes or reduction in credit terms by taxing jurisdictions;
- the cost and adequacy of insurance coverage and increases in the number or severity of insurance and claims expenses;
- risks relating to our substantial outstanding indebtedness; and
- our ability to raise additional capital on commercially reasonable terms or at all.
Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. Any forward-looking statement, including any contained herein, speaks only as of the time of this release or as of the date they were made and we do not undertake to update or revise them as more information becomes available or to disclose any facts, events, or circumstances after the date of this release or our statement, as applicable, that may affect the accuracy of any forward-looking statement, except as required by law.
PERFORMANCE FOOD GROUP COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
|||||||||||||||
(In millions, except per share data) |
|
Three Months Ended
|
|
Three Months Ended
|
|
Fiscal year ended
|
|
Fiscal year ended
|
|||||||
Net sales |
|
$ |
14,865.2 |
|
|
$ |
14,590.0 |
|
|
$ |
57,254.7 |
|
$ |
50,894.1 |
|
Cost of goods sold |
|
|
13,196.9 |
|
|
|
13,100.3 |
|
|
|
50,999.8 |
|
|
45,637.7 |
|
Gross profit |
|
|
1,668.3 |
|
|
|
1,489.7 |
|
|
|
6,254.9 |
|
|
5,256.4 |
|
Operating expenses |
|
|
1,406.5 |
|
|
|
1,336.9 |
|
|
|
5,489.1 |
|
|
4,929.0 |
|
Operating profit |
|
|
261.8 |
|
|
|
152.8 |
|
|
|
765.8 |
|
|
327.4 |
|
Other expense, net: |
|
|
|
|
|
|
|
|
|||||||
Interest expense, net |
|
|
56.0 |
|
|
|
47.8 |
|
|
|
218.0 |
|
|
182.9 |
|
Other, net |
|
|
(0.3 |
) |
|
|
(11.2 |
) |
|
|
3.8 |
|
|
(22.6 |
) |
Other expense, net |
|
|
55.7 |
|
|
|
36.6 |
|
|
|
221.8 |
|
|
160.3 |
|
Income before taxes |
|
|
206.1 |
|
|
|
116.2 |
|
|
|
544.0 |
|
|
167.1 |
|
Income tax expense |
|
|
56.0 |
|
|
|
40.2 |
|
|
|
146.8 |
|
|
54.6 |
|
Net income |
|
$ |
150.1 |
|
|
$ |
76.0 |
|
|
$ |
397.2 |
|
$ |
112.5 |
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|||||||
Basic |
|
|
154.5 |
|
|
|
153.4 |
|
|
|
154.2 |
|
|
149.8 |
|
Diluted |
|
|
156.6 |
|
|
|
155.0 |
|
|
|
156.1 |
|
|
151.3 |
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|||||||
Basic |
|
$ |
0.97 |
|
|
$ |
0.50 |
|
|
$ |
2.58 |
|
$ |
0.75 |
|
Diluted |
|
$ |
0.96 |
|
|
$ |
0.49 |
|
|
$ |
2.54 |
|
$ |
0.74 |
|
PERFORMANCE FOOD GROUP COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||||
($ in millions) |
|
As of
|
|
|
As of
|
|
||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash |
|
$ |
12.7 |
|
|
$ |
11.6 |
|
Accounts receivable, less allowances of |
|
|
2,399.3 |
|
|
|
2,307.4 |
|
Inventories, net |
|
|
3,390.0 |
|
|
|
3,428.6 |
|
Income taxes receivable |
|
|
41.7 |
|
|
|
34.0 |
|
Prepaid expenses and other current assets |
|
|
227.8 |
|
|
|
240.4 |
|
Total current assets |
|
|
6,071.5 |
|
|
|
6,022.0 |
|
Goodwill |
|
|
2,301.0 |
|
|
|
2,279.2 |
|
Other intangible assets, net |
|
|
1,028.4 |
|
|
|
1,195.6 |
|
Property, plant and equipment, net |
|
|
2,264.0 |
|
|
|
2,134.5 |
|
Operating lease right-of-use assets |
|
|
703.6 |
|
|
|
623.4 |
|
Other assets |
|
|
130.5 |
|
|
|
123.3 |
|
Total assets |
|
$ |
12,499.0 |
|
|
$ |
12,378.0 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Trade accounts payable and outstanding checks in excess of deposits |
|
$ |
2,453.5 |
|
|
$ |
2,559.5 |
|
Accrued expenses and other current liabilities |
|
|
891.5 |
|
|
|
882.6 |
|
Finance lease obligations-current installments |
|
|
102.6 |
|
|
|
79.9 |
|
Operating lease obligations-current installments |
|
|
105.5 |
|
|
|
111.0 |
|
Total current liabilities |
|
|
3,553.1 |
|
|
|
3,633.0 |
|
Long-term debt |
|
|
3,460.1 |
|
|
|
3,908.8 |
|
Deferred income tax liability, net |
|
|
446.2 |
|
|
|
424.3 |
|
Finance lease obligations, excluding current installments |
|
|
447.3 |
|
|
|
366.7 |
|
Operating lease obligations, excluding current installments |
|
|
628.9 |
|
|
|
530.8 |
|
Other long-term liabilities |
|
|
217.9 |
|
|
|
214.9 |
|
Total liabilities |
|
|
8,753.5 |
|
|
|
9,078.5 |
|
Total shareholders’ equity |
|
|
3,745.5 |
|
|
|
3,299.5 |
|
Total liabilities and shareholders’ equity |
|
$ |
12,499.0 |
|
|
$ |
12,378.0 |
|
PERFORMANCE FOOD GROUP COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
($ in millions) |
|
Fiscal year ended
|
|
Fiscal year ended
|
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net income |
|
$ |
397.2 |
|
|
$ |
112.5 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
||||
Depreciation and intangible asset amortization |
|
|
496.7 |
|
|
|
462.8 |
|
Provision for losses on accounts receivables |
|
|
6.0 |
|
|
|
9.0 |
|
Change in LIFO Reserve |
|
|
39.2 |
|
|
|
122.9 |
|
Other non-cash activities |
|
|
101.7 |
|
|
|
57.4 |
|
Changes in operating assets and liabilities, net: |
|
|
|
|
||||
Accounts receivable |
|
|
(95.6 |
) |
|
|
(195.1 |
) |
Inventories |
|
|
56.9 |
|
|
|
(582.4 |
) |
Income taxes receivable |
|
|
(11.0 |
) |
|
|
46.7 |
|
Prepaid expenses and other assets |
|
|
(3.2 |
) |
|
|
(0.4 |
) |
Trade accounts payable and outstanding checks in excess of deposits |
|
|
(164.6 |
) |
|
|
182.5 |
|
Accrued expenses and other liabilities |
|
|
8.8 |
|
|
|
60.6 |
|
Net cash provided by operating activities |
|
|
832.1 |
|
|
|
276.5 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Purchases of property, plant and equipment |
|
|
(269.7 |
) |
|
|
(215.5 |
) |
Net cash paid for acquisitions |
|
|
(63.8 |
) |
|
|
(1,650.5 |
) |
Proceeds from sale of property, plant and equipment and other |
|
|
38.9 |
|
|
|
4.5 |
|
Net cash used in investing activities |
|
|
(294.6 |
) |
|
|
(1,861.5 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Net (payments) borrowings under ABL Facility |
|
|
(454.4 |
) |
|
|
1,019.7 |
|
Borrowing of Notes due 2029 |
|
|
— |
|
|
|
1,000.0 |
|
Repayment of Notes due 2024 |
|
|
— |
|
|
|
(350.0 |
) |
Cash paid for debt issuance, extinguishment and modifications |
|
|
— |
|
|
|
(25.0 |
) |
Payments under finance lease obligations |
|
|
(88.5 |
) |
|
|
(72.1 |
) |
Cash paid for acquisitions |
|
|
— |
|
|
|
(6.9 |
) |
Proceeds from exercise of stock options and employee stock purchase plan |
|
|
30.8 |
|
|
|
27.3 |
|
Cash paid for shares withheld to cover taxes |
|
|
(12.6 |
) |
|
|
(11.4 |
) |
Repurchases of common stock |
|
|
(11.2 |
) |
|
|
— |
|
Other financing activities |
|
|
(0.3 |
) |
|
|
(0.1 |
) |
Net cash (used in) provided by financing activities |
|
|
(536.2 |
) |
|
|
1,581.5 |
|
Net increase (decrease) in cash and restricted cash |
|
|
1.3 |
|
|
|
(3.5 |
) |
Cash and restricted cash, beginning of period |
|
|
18.7 |
|
|
|
22.2 |
|
Cash and restricted cash, end of period |
|
$ |
20.0 |
|
|
$ |
18.7 |
|
The following table provides a reconciliation of cash and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows:
(In millions) |
|
As of
|
|
|
As of
|
|
||
Cash |
|
$ |
12.7 |
|
|
$ |
11.6 |
|
Restricted cash(1) |
|
|
7.3 |
|
|
|
7.1 |
|
Total cash and restricted cash |
|
$ |
20.0 |
|
|
$ |
18.7 |
|
(1) |
Restricted cash is reported within Other assets and represents the amounts required by insurers to collateralize a part of the deductibles for the Company’s workers’ compensation and liability claims. |
Supplemental disclosures of cash flow information:
($ in millions) |
|
Fiscal year ended
|
|
|
Fiscal year ended
|
|
||
Cash paid during the year for: |
|
|
|
|
|
|
||
Interest |
|
$ |
218.5 |
|
|
$ |
152.4 |
|
Income tax payments net of refunds |
|
|
134.1 |
|
|
|
8.7 |
|
Statement Regarding Non-GAAP Financial Measures
This earnings release and the accompanying financial statement tables include several financial measures that are not calculated in accordance with GAAP, including Adjusted EBITDA, Adjusted Diluted EPS, and Free Cash Flow. Such measures are not recognized terms under GAAP, should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP, and are not indicative of net income as determined under GAAP. Adjusted EBITDA, Adjusted Diluted EPS, Free Cash Flow, and other non-GAAP financial measures have limitations that should be considered before using these measures to evaluate PFG’s liquidity or financial performance. Adjusted EBITDA, Adjusted Diluted EPS, and Free Cash Flow, as presented, may not be comparable to similarly titled measures of other companies because of varying methods of calculation.
PFG uses Adjusted EBITDA to evaluate the performance of its business on a consistent basis over time and for business planning purposes. In addition, targets based on Adjusted EBITDA are among the measures we use to evaluate our management’s performance for purposes of determining their compensation under our incentive plans. PFG believes that the presentation of Adjusted EBITDA enhances an investor’s understanding of PFG’s performance. PFG believes this measure is a useful metric to assess PFG’s operating performance from period to period by excluding certain items that PFG believes are not representative of PFG’s core business.
Management measures operating performance based on our Adjusted EBITDA, defined as net income before interest expense, interest income, income and franchise taxes, and depreciation and amortization, further adjusted to exclude certain items we do not consider part of our core operating results. Such adjustments include certain unusual, non-cash, non-recurring, cost reduction and other adjustment items permitted in calculating covenant compliance under PFG’s
Management also uses Adjusted Diluted EPS, which is calculated by adjusting the most directly comparable GAAP financial measure by excluding the same items excluded in PFG’s calculation of Adjusted EBITDA, as well as amortization of intangible assets, to the extent that each such item was included in the applicable GAAP financial measure. For business combinations, the Company generally allocates a portion of the purchase price to intangible assets and such intangible assets contribute to revenue generation. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization over the useful lives of the intangible assets. The amount of the purchase price from an acquisition allocated to intangible assets and the term of its related amortization can vary significantly and are unique to each acquisition, and thus the Company does not believe it is reflective of ongoing operations. Intangible asset amortization excluded from Adjusted Diluted EPS represents the entire amount recorded within the Company’s GAAP financial statements, and the revenue generated by the associated intangible assets has not been excluded from Adjusted Diluted EPS. Intangible asset amortization is excluded from Adjusted Diluted EPS because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired, or the estimated useful life of an intangible asset is revised.
Management also uses Free Cash Flow, which is defined as net cash provided by operating activities less capital expenditures (purchases of property, plant, and equipment). PFG also believes that the presentation of Free Cash Flow enhances an investor’s understanding of PFG’s ability to make strategic investments and manage debt levels.
PFG believes that the presentation of Adjusted EBITDA, Adjusted Diluted EPS, and Free Cash Flow is useful to investors because these metrics provide insight into underlying business trends and year-over-year results and are frequently used by securities analysts, investors, and other interested parties in their evaluation of the operating performance of companies in PFG’s industry.
The following tables include a reconciliation of non-GAAP financial measures to the applicable most comparable GAAP financial measures.
PERFORMANCE FOOD GROUP COMPANY Non-GAAP Reconciliation (Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
||||||||||||||
($ in millions, except share and per share data) |
|
July 1, 2023 |
|
July 2, 2022 |
|
Change |
|
% |
||||||||
Net income (GAAP) |
|
$ |
150.1 |
|
|
$ |
76.0 |
|
|
$ |
74.1 |
|
|
|
97.5 |
|
Interest expense, net |
|
|
56.0 |
|
|
|
47.8 |
|
|
|
8.2 |
|
|
|
17.2 |
|
Income tax expense |
|
|
56.0 |
|
|
|
40.2 |
|
|
|
15.8 |
|
|
|
39.3 |
|
Depreciation |
|
|
83.5 |
|
|
|
76.5 |
|
|
|
7.0 |
|
|
|
9.2 |
|
Amortization of intangible assets |
|
|
44.0 |
|
|
|
47.0 |
|
|
|
(3.0 |
) |
|
|
(6.4 |
) |
Change in LIFO reserve (A) |
|
|
(29.1 |
) |
|
|
67.6 |
|
|
|
(96.7 |
) |
|
|
(143.0 |
) |
Stock-based compensation expense |
|
|
10.2 |
|
|
|
9.1 |
|
|
|
1.1 |
|
|
|
12.1 |
|
Loss (gain) on fuel derivatives |
|
|
0.5 |
|
|
|
(10.3 |
) |
|
|
10.8 |
|
|
|
104.9 |
|
Acquisition, integration & reorganization expenses (B) |
|
|
3.4 |
|
|
|
2.9 |
|
|
|
0.5 |
|
|
|
17.2 |
|
Other adjustments (C) |
|
|
10.6 |
|
|
|
0.3 |
|
|
|
10.3 |
|
|
|
3,433.3 |
|
Adjusted EBITDA (Non-GAAP) |
|
$ |
385.2 |
|
|
$ |
357.1 |
|
|
$ |
28.1 |
|
|
|
7.9 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share (GAAP) |
|
$ |
0.96 |
|
|
$ |
0.49 |
|
|
$ |
0.47 |
|
|
|
95.9 |
|
Impact of amortization of intangible assets |
|
|
0.28 |
|
|
|
0.30 |
|
|
|
(0.02 |
) |
|
|
(6.7 |
) |
Impact of change in LIFO reserve |
|
|
(0.19 |
) |
|
|
0.44 |
|
|
|
(0.63 |
) |
|
|
(143.2 |
) |
Impact of stock-based compensation expense |
|
|
0.07 |
|
|
|
0.06 |
|
|
|
0.01 |
|
|
|
16.7 |
|
Impact of loss (gain) on fuel derivatives |
|
|
— |
|
|
|
(0.07 |
) |
|
|
0.07 |
|
|
|
100.0 |
|
Impact of acquisition, integration & reorganization charges |
|
|
0.02 |
|
|
|
0.02 |
|
|
|
— |
|
|
|
— |
|
Impact of other adjustment items |
|
|
0.07 |
|
|
|
0.01 |
|
|
|
0.06 |
|
|
|
600.0 |
|
Tax impact of above adjustments |
|
|
(0.07 |
) |
|
|
(0.18 |
) |
|
|
0.11 |
|
|
|
61.1 |
|
Adjusted Diluted Earnings per Share (Non-GAAP) |
|
$ |
1.14 |
|
|
$ |
1.07 |
|
|
$ |
0.07 |
|
|
|
6.5 |
|
A. |
Includes (decreases) increases in the LIFO inventory reserve of |
B. |
Includes professional fees and other costs related to completed and abandoned acquisitions, costs of integrating certain of our facilities, and facility closing costs. |
C. |
Includes gains and losses on disposal of fixed assets, including a |
PERFORMANCE FOOD GROUP COMPANY Non-GAAP Reconciliation (Unaudited) |
||||||||||||||||
|
|
Fiscal year ended |
||||||||||||||
($ in millions, except share and per share data) |
|
July 1, 2023 |
|
July 2, 2022 |
|
Change |
|
% |
||||||||
Net income (GAAP) |
|
$ |
397.2 |
|
|
$ |
112.5 |
|
|
$ |
284.7 |
|
|
|
253.1 |
|
Interest expense, net |
|
|
218.0 |
|
|
|
182.9 |
|
|
|
35.1 |
|
|
|
19.2 |
|
Income tax expense |
|
|
146.8 |
|
|
|
54.6 |
|
|
|
92.2 |
|
|
|
168.9 |
|
Depreciation |
|
|
315.7 |
|
|
|
279.7 |
|
|
|
36.0 |
|
|
|
12.9 |
|
Amortization of intangible assets |
|
|
181.0 |
|
|
|
183.1 |
|
|
|
(2.1 |
) |
|
|
(1.1 |
) |
Change in LIFO reserve (A) |
|
|
39.2 |
|
|
|
122.9 |
|
|
|
(83.7 |
) |
|
|
(68.1 |
) |
Stock-based compensation expense |
|
|
43.3 |
|
|
|
44.0 |
|
|
|
(0.7 |
) |
|
|
(1.6 |
) |
Loss (gain) on fuel derivatives |
|
|
5.7 |
|
|
|
(20.7 |
) |
|
|
26.4 |
|
|
|
127.5 |
|
Acquisition, integration & reorganization expenses (B) |
|
|
10.6 |
|
|
|
49.9 |
|
|
|
(39.3 |
) |
|
|
(78.8 |
) |
Other adjustments (C) |
|
|
5.9 |
|
|
|
10.9 |
|
|
|
(5.0 |
) |
|
|
(45.9 |
) |
Adjusted EBITDA (Non-GAAP) |
|
$ |
1,363.4 |
|
|
$ |
1,019.8 |
|
|
$ |
343.6 |
|
|
|
33.7 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share (GAAP) |
|
$ |
2.54 |
|
|
$ |
0.74 |
|
|
$ |
1.80 |
|
|
|
243.2 |
|
Impact of amortization of intangible assets |
|
|
1.16 |
|
|
|
1.21 |
|
|
|
(0.05 |
) |
|
|
(4.1 |
) |
Impact of change in LIFO reserve |
|
|
0.25 |
|
|
|
0.81 |
|
|
|
(0.56 |
) |
|
|
(69.1 |
) |
Impact of stock-based compensation |
|
|
0.28 |
|
|
|
0.29 |
|
|
|
(0.01 |
) |
|
|
(3.4 |
) |
Impact of loss (gain) on fuel derivatives |
|
|
0.03 |
|
|
|
(0.14 |
) |
|
|
0.17 |
|
|
|
121.4 |
|
Impact of acquisition, integration & reorganization charges |
|
|
0.07 |
|
|
|
0.33 |
|
|
|
(0.26 |
) |
|
|
(78.8 |
) |
Impact of other adjustment items |
|
|
0.04 |
|
|
|
0.08 |
|
|
|
(0.04 |
) |
|
|
(50.0 |
) |
Tax impact of above adjustments |
|
|
(0.49 |
) |
|
|
(0.72 |
) |
|
|
0.23 |
|
|
|
31.9 |
|
Adjusted Diluted Earnings per Share (Non-GAAP) |
|
$ |
3.88 |
|
|
$ |
2.60 |
|
|
$ |
1.28 |
|
|
|
49.2 |
|
A. |
Includes (decreases) increases in the LIFO inventory reserve of |
B. |
Includes professional fees and other costs related to completed and abandoned acquisitions, costs of integrating certain of our facilities, and facility closing costs. |
C. |
Includes asset impairments, gains and losses on disposal of fixed assets, amounts related to favorable and unfavorable leases, foreign currency transaction gains and losses, franchise tax expense, and other adjustments permitted by our ABL Facility. |
(In millions) |
|
Fiscal year ended
|
|
Fiscal year ended
|
||||
Net cash provided by operating activities (GAAP) |
|
$ |
832.1 |
|
|
$ |
276.5 |
|
Purchases of property, plant and equipment |
|
|
(269.7 |
) |
|
|
(215.5 |
) |
Free cash flow (Non-GAAP) |
|
$ |
562.4 |
|
|
$ |
61.0 |
|
PERFORMANCE FOOD GROUP COMPANY Non-GAAP Reconciliation (Unaudited) |
||||||||||||||||
|
|
Fiscal year ended July 1, 2023 |
||||||||||||||
($ in millions) |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
||||||||
Net income (GAAP) |
|
$ |
95.7 |
|
|
$ |
71.1 |
|
|
$ |
80.3 |
|
|
$ |
150.1 |
|
Interest expense, net |
|
|
50.4 |
|
|
|
55.7 |
|
|
|
55.9 |
|
|
|
56.0 |
|
Income tax expense |
|
|
34.2 |
|
|
|
25.1 |
|
|
|
31.5 |
|
|
|
56.0 |
|
Depreciation |
|
|
76.1 |
|
|
|
77.4 |
|
|
|
78.7 |
|
|
|
83.5 |
|
Amortization of intangible assets |
|
|
43.1 |
|
|
|
47.8 |
|
|
|
46.1 |
|
|
|
44.0 |
|
Change in LIFO reserve (A) |
|
|
26.8 |
|
|
|
25.0 |
|
|
|
16.5 |
|
|
|
(29.1 |
) |
Stock-based compensation expense |
|
|
11.5 |
|
|
|
11.4 |
|
|
|
10.2 |
|
|
|
10.2 |
|
Loss (gain) on fuel derivatives |
|
|
9.8 |
|
|
|
(7.3 |
) |
|
|
2.7 |
|
|
|
0.5 |
|
Acquisition, integration & reorganization expenses (B) |
|
|
3.0 |
|
|
|
2.8 |
|
|
|
1.4 |
|
|
|
3.4 |
|
Other adjustments (C) |
|
|
4.1 |
|
|
|
(0.2 |
) |
|
|
(8.6 |
) |
|
|
10.6 |
|
Adjusted EBITDA (Non-GAAP) |
|
$ |
354.7 |
|
|
$ |
308.8 |
|
|
$ |
314.7 |
|
|
$ |
385.2 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share (GAAP) |
|
$ |
0.62 |
|
|
$ |
0.46 |
|
|
$ |
0.51 |
|
|
$ |
0.96 |
|
Impact of amortization of intangible assets |
|
|
0.28 |
|
|
|
0.30 |
|
|
|
0.29 |
|
|
|
0.28 |
|
Impact of change in LIFO reserve |
|
|
0.17 |
|
|
|
0.16 |
|
|
|
0.11 |
|
|
|
(0.19 |
) |
Impact of stock-based compensation |
|
|
0.07 |
|
|
|
0.07 |
|
|
|
0.06 |
|
|
|
0.07 |
|
Impact of loss (gain) on fuel derivatives |
|
|
0.06 |
|
|
|
(0.05 |
) |
|
|
0.02 |
|
|
|
— |
|
Impact of acquisition, integration & reorganization charges |
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.01 |
|
|
|
0.02 |
|
Impact of other adjustment items |
|
|
0.03 |
|
|
|
— |
|
|
|
(0.05 |
) |
|
|
0.07 |
|
Tax impact of above adjustments |
|
|
(0.17 |
) |
|
|
(0.13 |
) |
|
|
(0.12 |
) |
|
|
(0.07 |
) |
Adjusted Diluted Earnings per Share (Non-GAAP) |
|
$ |
1.08 |
|
|
$ |
0.83 |
|
|
$ |
0.83 |
|
|
$ |
1.14 |
|
A. |
Includes (decreases) increases in the LIFO inventory reserve of |
B. |
Includes professional fees and other costs related to completed and abandoned acquisitions, costs of integrating certain of our facilities, and facility closing costs. |
C. |
Includes gains and losses on disposal of fixed assets, including a |
PERFORMANCE FOOD GROUP COMPANY Non-GAAP Reconciliation (Unaudited) |
||||||||||||||||
|
|
Fiscal year ended July 2, 2022 |
||||||||||||||
($ in millions) |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
||||||||
Net income (GAAP) |
|
$ |
4.7 |
|
|
$ |
8.4 |
|
|
$ |
23.4 |
|
|
$ |
76.0 |
|
Interest expense, net |
|
|
44.0 |
|
|
|
45.2 |
|
|
|
45.9 |
|
|
|
47.8 |
|
Income tax expense |
|
|
0.8 |
|
|
|
3.0 |
|
|
|
10.6 |
|
|
|
40.2 |
|
Depreciation |
|
|
57.0 |
|
|
|
70.4 |
|
|
|
75.8 |
|
|
|
76.5 |
|
Amortization of intangible assets |
|
|
41.7 |
|
|
|
46.1 |
|
|
|
48.3 |
|
|
|
47.0 |
|
Change in LIFO reserve (A) |
|
|
(11.3 |
) |
|
|
45.5 |
|
|
|
21.1 |
|
|
|
67.6 |
|
Stock-based compensation expense |
|
|
10.0 |
|
|
|
14.3 |
|
|
|
10.6 |
|
|
|
9.1 |
|
(Gain) loss on fuel derivatives |
|
|
(1.3 |
) |
|
|
1.4 |
|
|
|
(10.5 |
) |
|
|
(10.3 |
) |
Acquisition, integration & reorganization expenses (B) |
|
|
32.8 |
|
|
|
4.5 |
|
|
|
9.7 |
|
|
|
2.9 |
|
Other adjustments (C) |
|
|
5.3 |
|
|
|
2.3 |
|
|
|
3.0 |
|
|
|
0.3 |
|
Adjusted EBITDA (Non-GAAP) |
|
$ |
183.7 |
|
|
$ |
241.1 |
|
|
$ |
237.9 |
|
|
$ |
357.1 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share (GAAP) |
|
$ |
0.03 |
|
|
$ |
0.05 |
|
|
$ |
0.15 |
|
|
$ |
0.49 |
|
Impact of amortization of intangible assets |
|
|
0.30 |
|
|
|
0.30 |
|
|
|
0.31 |
|
|
|
0.30 |
|
Impact of change in LIFO reserve |
|
|
(0.08 |
) |
|
|
0.29 |
|
|
|
0.14 |
|
|
|
0.44 |
|
Impact of stock-based compensation |
|
|
0.07 |
|
|
|
0.09 |
|
|
|
0.07 |
|
|
|
0.06 |
|
Impact of (gain) loss on fuel derivatives |
|
|
(0.01 |
) |
|
|
0.01 |
|
|
|
(0.07 |
) |
|
|
(0.07 |
) |
Impact of acquisition, integration & reorganization charges |
|
|
0.23 |
|
|
|
0.03 |
|
|
|
0.06 |
|
|
|
0.02 |
|
Impact of other adjustment items |
|
|
0.04 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.01 |
|
Tax impact of above adjustments |
|
|
(0.15 |
) |
|
|
(0.22 |
) |
|
|
(0.17 |
) |
|
|
(0.18 |
) |
Adjusted Diluted Earnings per Share (Non-GAAP) |
|
$ |
0.43 |
|
|
$ |
0.57 |
|
|
$ |
0.51 |
|
|
$ |
1.07 |
|
A. |
Includes increases (decreases) in the LIFO inventory reserve of |
B. |
Includes professional fees and other costs related to completed and abandoned acquisitions, costs of integrating certain of our facilities, and facility closing costs. |
C. |
Includes asset impairments, gains and losses on disposal of fixed assets, amounts related to favorable and unfavorable leases, foreign currency transaction gains and losses, franchise tax expense, and other adjustments permitted by our ABL Facility. |
Segment Results
The Company has three reportable segments: Foodservice, Vistar, and Convenience. Management evaluates the performance of these segments based on various operating and financial metrics, including their respective sales growth and Adjusted EBITDA. Adjusted EBITDA is defined as net income before interest expense, interest income, income taxes, and depreciation and amortization, and excludes certain items that the Company does not consider part of its segments' core operating results, including stock-based compensation expense, changes in the LIFO reserve, acquisition, integration and reorganization expenses, and gains and losses related to fuel derivatives.
Corporate & All Other is comprised of corporate overhead and certain operations that are not considered separate reportable segments based on their size. This includes the operations of our internal logistics unit responsible for managing and allocating inbound logistics revenue and expense.
The following tables set forth net sales and Adjusted EBITDA by segment for the periods indicated (dollars in millions):
Net Sales
|
|
Three Months Ended |
||||||||||||||
|
|
July 1, 2023 |
|
July 2, 2022 |
|
Change |
|
% |
||||||||
Foodservice |
|
$ |
7,317.8 |
|
|
$ |
7,397.9 |
|
|
$ |
(80.1 |
) |
|
|
(1.1 |
) |
Vistar |
|
|
1,225.5 |
|
|
|
1,035.8 |
|
|
|
189.7 |
|
|
|
18.3 |
|
Convenience |
|
|
6,287.3 |
|
|
|
6,147.5 |
|
|
|
139.8 |
|
|
|
2.3 |
|
Corporate & All Other |
|
|
210.0 |
|
|
|
149.8 |
|
|
|
60.2 |
|
|
|
40.2 |
|
Intersegment Eliminations |
|
|
(175.4 |
) |
|
|
(141.0 |
) |
|
|
(34.4 |
) |
|
|
(24.4 |
) |
Total net sales |
|
$ |
14,865.2 |
|
|
$ |
14,590.0 |
|
|
$ |
275.2 |
|
|
|
1.9 |
|
|
|
Fiscal year ended |
||||||||||||||
|
|
July 1, 2023 |
|
July 2, 2022 |
|
Change |
|
% |
||||||||
Foodservice |
|
$ |
28,490.6 |
|
|
$ |
26,579.2 |
|
|
$ |
1,911.4 |
|
|
|
7.2 |
|
Vistar |
|
|
4,549.3 |
|
|
|
3,681.8 |
|
|
|
867.5 |
|
|
|
23.6 |
|
Convenience |
|
|
24,119.6 |
|
|
|
20,603.3 |
|
|
|
3,516.3 |
|
|
|
17.1 |
|
Corporate & All Other |
|
|
700.4 |
|
|
|
526.5 |
|
|
|
173.9 |
|
|
|
33.0 |
|
Intersegment Eliminations |
|
|
(605.2 |
) |
|
|
(496.7 |
) |
|
|
(108.5 |
) |
|
|
(21.8 |
) |
Total net sales |
|
$ |
57,254.7 |
|
|
$ |
50,894.1 |
|
|
$ |
6,360.6 |
|
|
|
12.5 |
|
Adjusted EBITDA
|
|
Three Months Ended |
||||||||||||||
|
|
July 1, 2023 |
|
July 2, 2022 |
|
Change |
|
% |
||||||||
Foodservice |
|
$ |
273.3 |
|
|
$ |
268.8 |
|
|
$ |
4.5 |
|
|
|
1.7 |
|
Vistar |
|
|
85.6 |
|
|
|
65.1 |
|
|
|
20.5 |
|
|
|
31.5 |
|
Convenience |
|
|
80.7 |
|
|
|
87.3 |
|
|
|
(6.6 |
) |
|
|
(7.6 |
) |
Corporate & All Other |
|
|
(54.4 |
) |
|
|
(64.1 |
) |
|
|
9.7 |
|
|
|
15.1 |
|
Total Adjusted EBITDA |
|
$ |
385.2 |
|
|
$ |
357.1 |
|
|
$ |
28.1 |
|
|
|
7.9 |
|
|
|
Fiscal year ended |
||||||||||||||
|
|
July 1, 2023 |
|
July 2, 2022 |
|
Change |
|
% |
||||||||
Foodservice |
|
$ |
943.6 |
|
|
$ |
786.5 |
|
|
$ |
157.1 |
|
|
|
20.0 |
|
Vistar |
|
|
325.3 |
|
|
|
193.0 |
|
|
|
132.3 |
|
|
|
68.5 |
|
Convenience |
|
|
328.8 |
|
|
|
257.1 |
|
|
|
71.7 |
|
|
|
27.9 |
|
Corporate & All Other |
|
|
(234.3 |
) |
|
|
(216.8 |
) |
|
|
(17.5 |
) |
|
|
(8.1 |
) |
Total Adjusted EBITDA |
|
$ |
1,363.4 |
|
|
$ |
1,019.8 |
|
|
$ |
343.6 |
|
|
|
33.7 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230816846538/en/
Investors:
William S. Marshall
VP, Investor Relations
(804) 287-8108
Bill.Marshall@pfgc.com
Media:
Scott Golden
Director, Communications & Engagement
(804) 484-7873
Scott.Golden@pfgc.com
Source: Performance Food Group Company
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