Performance Food Group Company Reports Second-Quarter and First-Half Fiscal 2024 Results
- Total case volume grew 2.1% in the second quarter and 2.4% in the first half of fiscal 2024
- Net sales increased 2.9% to $14.3 billion in the second quarter and 2.2% to $29.2 billion in the first half of fiscal 2024
- Gross profit improved 6.6% to $1.6 billion in the second quarter and 6.1% to $3.3 billion in the first half of fiscal 2024
- Net income increased 10.1% to $78.3 million in the second quarter and 19.3% to $199.0 million in the first half of fiscal 2024
- Adjusted EBITDA increased 11.9% to $345.4 million in the second quarter and 9.9% to $729.2 million in the first half of fiscal 2024
- Diluted EPS increased 8.7% to $0.50 in the second quarter and 18.7% to $1.27 in the first half of fiscal 2024
- Adjusted Diluted EPS increased 8.4% to $0.90 in the second quarter and 7.3% to $2.05 in the first half of fiscal 2024
- Operating Cash Flow of $554.0 million and free cash flow of $406.9 million were delivered in the first half of fiscal 2024
- None.
Insights
The reported financial results from Performance Food Group Company (PFG) demonstrate robust growth in several key metrics, indicating a positive trajectory for the company. The increase in total case volume and net sales suggests a successful expansion in market share, particularly in the organic independent cases segment. The reported gross profit and net income growth outpacing net sales growth is a strong indicator of operational efficiency and cost management.
From an investment perspective, the solid cash flow generation and aggressive share repurchase program are signals of management's confidence in the company's financial health and future prospects. The repurchase program can be seen as a means to return value to shareholders and could potentially support the stock price. However, investors should be aware of the operating expenses which have risen, though seemingly in line with the company's expansion efforts. The effective tax rate increase is also notable, as it may affect future net income figures.
It is important to consider the company's forward-looking statements, including expectations for net sales and Adjusted EBITDA, as they provide insight into management's confidence in continued growth. However, these projections should be taken with caution as they exclude certain unpredictable items which could have a significant impact on the reported net income.
PFG's performance in the food distribution industry reflects broader market trends, including the resilience of the independent restaurant sector. The 8.7% increase in organic independent cases suggests that PFG is effectively capitalizing on this segment's recovery and growth post-pandemic. Furthermore, the company's ability to achieve a positive mix shift indicates successful strategic positioning within higher-margin areas.
Investors should consider the broader economic context, such as inflationary pressures, reflected in the company's product cost inflation of approximately 3.6%. PFG's ability to manage these costs and still report an increase in gross profit is commendable and may reflect procurement efficiencies and pricing strategies that could be sustainable over the long term.
The company's segment results, particularly in the Foodservice and Vistar divisions, show targeted growth areas. The growth in net sales for Vistar, driven by pricing improvements and a recent acquisition, suggests strategic moves that could have long-term benefits. However, the increase in operating expenses for Vistar warrants monitoring to ensure it does not erode profit margins over time.
Performance Food Group's financial outcomes can be partially attributed to macroeconomic factors, such as inflation and shifts in consumer habits. The company's ability to navigate product cost inflation while still improving gross profit margins suggests effective pass-through strategies and resilience to economic fluctuations. This is particularly relevant given the current environment of rising prices and supply chain disruptions.
The capital expenditures increase, indicative of investment in growth and possibly modernization, should be viewed in the context of economic cycles and the potential for future returns on these investments. The free cash flow generation is a positive signal for potential reinvestment and financial flexibility.
When considering the long-term outlook, PFG's targets for fiscal 2025 indicate an ambitious but potentially achievable growth trajectory. However, the lack of a reconciliation to GAAP financial measures for its Adjusted EBITDA outlook introduces an element of uncertainty. Investors should be mindful of this when evaluating the company's future performance expectations against the backdrop of economic uncertainty.
Strong Independent Restaurant Case Growth & Solid Cash Flow Generation; Reiterates Fiscal 2024 Outlook
Second-Quarter Fiscal 2024 Highlights
-
Total case volume grew
2.1% -
Net sales increased
2.9% to$14.3 billion -
Gross profit improved
6.6% to$1.6 billion -
Net income increased
10.1% to$78.3 million -
Adjusted EBITDA increased
11.9% to$345.4 million -
Diluted Earnings Per Share (“EPS”) increased
8.7% to$0.50 -
Adjusted Diluted EPS increased
8.4% to$0.90
First-Half Fiscal 2024 Highlights
-
Total case volume grew
2.4% -
Net sales increased
2.2% to$29.2 billion -
Gross profit improved
6.1% to$3.3 billion -
Net income increased
19.3% to$199.0 million -
Adjusted EBITDA increased
9.9% to$729.2 million -
Diluted EPS increased
18.7% to$1.27 -
Adjusted Diluted EPS increased
7.3% to$2.05 -
Operating Cash Flow of
$554.0 million -
Free cash flow of
$406.9 million
“Our strong business momentum continued through the fiscal second quarter, producing solid top and bottom-line results for our company,” said George Holm, PFG’s Chairman & Chief Executive Officer. “Our company benefitted from outstanding organic independent case growth, leading to another quarter of strong market share gains. Solid execution across our business segments, along with positive mix shift and broad channel growth, led to margin expansion and strong cash flow generation. I am very pleased with the organization’s successful execution of our business strategy with the goal of maximizing value for our shareholders.”
1 |
This earnings release includes several metrics, including Adjusted EBITDA, Adjusted Diluted Earnings per Share, and Free Cash Flow, that are not calculated in accordance with Generally Accepted Accounting Principles in the |
Second-Quarter Fiscal 2024 Financial Summary
Total organic case volume increased
Net sales for the second quarter of fiscal 2024 grew
Gross profit for the second quarter of fiscal 2024 grew
Operating expenses rose
Net income for the second quarter of fiscal 2024 increased
For the quarter, Adjusted EBITDA rose
Diluted EPS increased
First-Half Fiscal 2024 Financial Summary
Total organic case volume increased
Net sales for the first half of fiscal 2024 grew
Gross profit for the first half of fiscal 2024 grew
Operating expenses rose
Net income for the first half of fiscal 2024 increased
For the first half of fiscal 2024, Adjusted EBITDA rose
Diluted EPS increased
Cash Flow and Capital Spending
In the first six months of 2024, PFG provided
In the first six months of fiscal 2024, PFG invested
Share Repurchase Program
During the three months ended December 30, 2023, the Company repurchased and subsequently retired 0.8 million shares of common stock, for a total of
Second-Quarter Fiscal 2024 Segment Results
Foodservice
Second-quarter fiscal 2024 net sales for Foodservice increased
Second-quarter fiscal 2024 Adjusted EBITDA for Foodservice increased
Vistar
For the second quarter of fiscal 2024, net sales for Vistar increased
Second-quarter fiscal 2024 Adjusted EBITDA for Vistar increased
Convenience
Second-quarter fiscal 2024 net sales for Convenience increased
Second-quarter fiscal 2024 Adjusted EBITDA for Convenience increased
Fiscal 2024 & Long-Term Outlook
For the third quarter of fiscal 2024, PFG expects net sales to be in a range of
For the full fiscal year 2024, PFG continues to expect net sales to be in a range of
PFG reiterates its 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, February 7, 2024, 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 1, 2023 filed with the Securities and Exchange Commission (the “SEC”) on August 16, 2023, 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, including the impact of interest rate increases on our variable rate debt; 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
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||
Net sales |
|
$ |
14,295.7 |
|
$ |
13,898.9 |
|
|
$ |
29,234.3 |
|
|
$ |
28,618.2 |
||
Cost of goods sold |
|
|
12,697.6 |
|
|
12,399.3 |
|
|
|
25,973.3 |
|
|
|
25,543.5 |
||
Gross profit |
|
|
1,598.1 |
|
|
1,499.6 |
|
|
|
3,261.0 |
|
|
|
3,074.7 |
||
Operating expenses |
|
|
1,424.2 |
|
|
1,355.6 |
|
|
|
2,870.9 |
|
|
|
2,739.5 |
||
Operating profit |
|
|
173.9 |
|
|
144.0 |
|
|
|
390.1 |
|
|
|
335.2 |
||
Other expense, net: |
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
61.4 |
|
|
55.7 |
|
|
|
117.5 |
|
|
|
106.1 |
||
Other, net |
|
|
0.8 |
|
|
(7.9 |
) |
|
|
(2.4 |
) |
|
|
3.0 |
||
Other expense, net |
|
|
62.2 |
|
|
47.8 |
|
|
|
115.1 |
|
|
|
109.1 |
||
Income before taxes |
|
|
111.7 |
|
|
96.2 |
|
|
|
275.0 |
|
|
|
226.1 |
||
Income tax expense |
|
|
33.4 |
|
|
25.1 |
|
|
|
76.0 |
|
|
|
59.3 |
||
Net income |
|
$ |
78.3 |
|
$ |
71.1 |
|
|
$ |
199.0 |
|
|
$ |
166.8 |
||
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
154.2 |
|
|
154.1 |
|
|
|
154.5 |
|
|
|
153.9 |
||
Diluted |
|
|
155.7 |
|
|
156.1 |
|
|
|
156.2 |
|
|
|
155.9 |
||
Earnings per common share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
0.51 |
|
$ |
0.46 |
|
|
$ |
1.29 |
|
|
$ |
1.08 |
||
Diluted |
|
$ |
0.50 |
|
$ |
0.46 |
|
|
$ |
1.27 |
|
|
$ |
1.07 |
||
PERFORMANCE FOOD GROUP COMPANY |
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||
($ in millions) |
|
As of
|
|
As of
|
||
ASSETS |
|
|
|
|
||
Current assets: |
|
|
|
|
||
Cash |
|
$ |
16.4 |
|
$ |
12.7 |
Accounts receivable, less allowances of |
|
|
2,298.9 |
|
|
2,399.3 |
Inventories, net |
|
|
3,342.1 |
|
|
3,390.0 |
Income taxes receivable |
|
|
62.4 |
|
|
41.7 |
Prepaid expenses and other current assets |
|
|
236.5 |
|
|
227.8 |
Total current assets |
|
|
5,956.3 |
|
|
6,071.5 |
Goodwill |
|
|
2,418.3 |
|
|
2,301.0 |
Other intangible assets, net |
|
|
1,072.5 |
|
|
1,028.4 |
Property, plant and equipment, net |
|
|
2,465.8 |
|
|
2,264.0 |
Operating lease right-of-use assets |
|
|
841.0 |
|
|
703.6 |
Other assets |
|
|
158.6 |
|
|
130.5 |
Total assets |
|
$ |
12,912.5 |
|
$ |
12,499.0 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Trade accounts payable and outstanding checks in excess of deposits |
|
$ |
2,423.5 |
|
$ |
2,453.5 |
Accrued expenses and other current liabilities |
|
|
837.0 |
|
|
891.5 |
Finance lease obligations-current installments |
|
|
118.8 |
|
|
102.6 |
Operating lease obligations-current installments |
|
|
108.4 |
|
|
105.5 |
Total current liabilities |
|
|
3,487.7 |
|
|
3,553.1 |
Long-term debt |
|
|
3,502.0 |
|
|
3,460.1 |
Deferred income tax liability, net |
|
|
474.7 |
|
|
446.2 |
Finance lease obligations, excluding current installments |
|
|
536.1 |
|
|
447.3 |
Operating lease obligations, excluding current installments |
|
|
773.1 |
|
|
628.9 |
Other long-term liabilities |
|
|
277.2 |
|
|
217.9 |
Total liabilities |
|
|
9,050.8 |
|
|
8,753.5 |
Total shareholders’ equity |
|
|
3,861.7 |
|
|
3,745.5 |
Total liabilities and shareholders’ equity |
|
$ |
12,912.5 |
|
$ |
12,499.0 |
PERFORMANCE FOOD GROUP COMPANY |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
($ in millions) |
|
Six Months Ended
|
|
Six Months Ended
|
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net income |
|
$ |
199.0 |
|
|
$ |
166.8 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
||||
Depreciation and intangible asset amortization |
|
|
272.6 |
|
|
|
244.4 |
|
Provision for losses on accounts receivables |
|
|
11.6 |
|
|
|
7.2 |
|
Change in LIFO Reserve |
|
|
41.0 |
|
|
|
51.8 |
|
Other non-cash activities |
|
|
5.8 |
|
|
|
50.6 |
|
Changes in operating assets and liabilities, net: |
|
|
|
|
||||
Accounts receivable |
|
|
107.2 |
|
|
|
147.9 |
|
Inventories |
|
|
32.7 |
|
|
|
90.1 |
|
Income taxes receivable |
|
|
(20.7 |
) |
|
|
(51.6 |
) |
Prepaid expenses and other assets |
|
|
(40.9 |
) |
|
|
9.3 |
|
Trade accounts payable and outstanding checks in excess of deposits |
|
|
(46.9 |
) |
|
|
(202.6 |
) |
Accrued expenses and other liabilities |
|
|
(7.4 |
) |
|
|
(89.4 |
) |
Net cash provided by operating activities |
|
|
554.0 |
|
|
|
424.5 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Purchases of property, plant and equipment |
|
|
(147.1 |
) |
|
|
(98.1 |
) |
Net cash paid for acquisitions |
|
|
(308.1 |
) |
|
|
(65.8 |
) |
Proceeds from sale of property, plant and equipment and other |
|
|
18.8 |
|
|
|
3.6 |
|
Net cash used in investing activities |
|
|
(436.4 |
) |
|
|
(160.3 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Net borrowings (payments) under ABL Facility |
|
|
39.0 |
|
|
|
(232.1 |
) |
Payments under finance lease obligations |
|
|
(56.5 |
) |
|
|
(42.8 |
) |
Proceeds from exercise of stock options and employee stock purchase plan |
|
|
1.1 |
|
|
|
14.7 |
|
Cash paid for shares withheld to cover taxes |
|
|
(18.9 |
) |
|
|
(9.1 |
) |
Repurchases of common stock |
|
|
(78.1 |
) |
|
|
— |
|
Other financing activities |
|
|
(0.3 |
) |
|
|
(0.3 |
) |
Net cash provided by (used in) financing activities |
|
|
(113.7 |
) |
|
|
(269.6 |
) |
Net decrease in cash and restricted cash |
|
|
3.9 |
|
|
|
(5.4 |
) |
Cash and restricted cash, beginning of period |
|
|
20.0 |
|
|
|
18.7 |
|
Cash and restricted cash, end of period |
|
$ |
23.9 |
|
|
$ |
13.3 |
|
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 |
|
$ |
16.4 |
|
$ |
12.7 |
Restricted cash(1) |
|
|
7.5 |
|
|
7.3 |
Total cash and restricted cash |
|
$ |
23.9 |
|
$ |
20.0 |
| (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) |
|
Six Months Ended
|
|
Six Months Ended
|
||
Cash paid during the year for: |
|
|
|
|
||
Interest |
|
$ |
122.3 |
|
$ |
105.0 |
Income tax payments net of refunds |
|
|
109.0 |
|
|
105.1 |
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; whereas, 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 |
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Non-GAAP Reconciliation (Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
||||||||||||||
($ in millions, except share and per share data) |
|
December 30, 2023 |
|
December 31, 2022 |
|
Change |
|
% |
||||||||
Net income (GAAP) |
|
$ |
78.3 |
|
|
$ |
71.1 |
|
|
$ |
7.2 |
|
|
|
10.1 |
|
Interest expense, net |
|
|
61.4 |
|
|
|
55.7 |
|
|
|
5.7 |
|
|
|
10.2 |
|
Income tax expense |
|
|
33.4 |
|
|
|
25.1 |
|
|
|
8.3 |
|
|
|
33.1 |
|
Depreciation |
|
|
86.3 |
|
|
|
77.4 |
|
|
|
8.9 |
|
|
|
11.5 |
|
Amortization of intangible assets |
|
|
57.0 |
|
|
|
47.8 |
|
|
|
9.2 |
|
|
|
19.2 |
|
Change in LIFO reserve (A) |
|
|
21.8 |
|
|
|
25.0 |
|
|
|
(3.2 |
) |
|
|
(12.8 |
) |
Stock-based compensation expense |
|
|
11.0 |
|
|
|
11.4 |
|
|
|
(0.4 |
) |
|
|
(3.5 |
) |
Loss (gain) on fuel derivatives |
|
|
1.8 |
|
|
|
(7.3 |
) |
|
|
9.1 |
|
|
|
124.7 |
|
Acquisition, integration & reorganization expenses (B) |
|
|
3.9 |
|
|
|
2.8 |
|
|
|
1.1 |
|
|
|
39.3 |
|
Other adjustments (C) |
|
|
(9.5 |
) |
|
|
(0.2 |
) |
|
|
(9.3 |
) |
|
|
4,650.0 |
|
Adjusted EBITDA (Non-GAAP) |
|
$ |
345.4 |
|
|
$ |
308.8 |
|
|
$ |
36.6 |
|
|
|
11.9 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share (GAAP) |
|
$ |
0.50 |
|
|
$ |
0.46 |
|
|
$ |
0.04 |
|
|
|
8.7 |
|
Impact of amortization of intangible assets |
|
|
0.36 |
|
|
|
0.30 |
|
|
|
0.06 |
|
|
|
20.0 |
|
Impact of change in LIFO reserve |
|
|
0.14 |
|
|
|
0.16 |
|
|
|
(0.02 |
) |
|
|
(12.5 |
) |
Impact of stock-based compensation expense |
|
|
0.07 |
|
|
|
0.07 |
|
|
|
— |
|
|
|
— |
|
Impact of loss (gain) on fuel derivatives |
|
|
0.01 |
|
|
|
(0.05 |
) |
|
|
0.06 |
|
|
|
120.00 |
|
Impact of acquisition, integration & reorganization charges |
|
|
0.03 |
|
|
|
0.02 |
|
|
|
0.01 |
|
|
|
50.00 |
|
Impact of other adjustment items |
|
|
(0.06 |
) |
|
|
— |
|
|
|
(0.06 |
) |
|
NM |
|
|
Tax impact of above adjustments |
|
|
(0.15 |
) |
|
|
(0.13 |
) |
|
|
(0.02 |
) |
|
|
(15.4 |
) |
Adjusted Diluted Earnings per Share (Non-GAAP) |
|
$ |
0.90 |
|
|
$ |
0.83 |
|
|
$ |
0.07 |
|
|
|
8.4 |
|
A. |
Includes a decrease 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 an |
PERFORMANCE FOOD GROUP COMPANY |
||||||||||||||||
Non-GAAP Reconciliation (Unaudited) |
||||||||||||||||
|
|
Six Months Ended |
||||||||||||||
($ in millions, except share and per share data) |
|
December 30, 2023 |
|
December 31, 2022 |
|
Change |
|
% |
||||||||
Net income (GAAP) |
|
$ |
199.0 |
|
|
$ |
166.8 |
|
|
$ |
32.2 |
|
|
|
19.3 |
|
Interest expense, net |
|
|
117.5 |
|
|
|
106.1 |
|
|
|
11.4 |
|
|
|
10.7 |
|
Income tax expense |
|
|
76.0 |
|
|
|
59.3 |
|
|
|
16.7 |
|
|
|
28.2 |
|
Depreciation |
|
|
170.1 |
|
|
|
153.5 |
|
|
|
16.6 |
|
|
|
10.8 |
|
Amortization of intangible assets |
|
|
102.5 |
|
|
|
90.9 |
|
|
|
11.6 |
|
|
|
12.8 |
|
Change in LIFO reserve (A) |
|
|
41.0 |
|
|
|
51.8 |
|
|
|
(10.8 |
) |
|
|
(20.8 |
) |
Stock-based compensation expense |
|
|
21.7 |
|
|
|
22.9 |
|
|
|
(1.2 |
) |
|
|
(5.2 |
) |
(Gain) loss on fuel derivatives |
|
|
(1.7 |
) |
|
|
2.5 |
|
|
|
(4.2 |
) |
|
|
(168.0 |
) |
Acquisition, integration & reorganization expenses (B) |
|
|
13.7 |
|
|
|
5.8 |
|
|
|
7.9 |
|
|
|
136.2 |
|
Other adjustments (C) |
|
|
(10.6 |
) |
|
|
3.9 |
|
|
|
(14.5 |
) |
|
|
(371.8 |
) |
Adjusted EBITDA (Non-GAAP) |
|
$ |
729.2 |
|
|
$ |
663.5 |
|
|
$ |
65.7 |
|
|
|
9.9 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share (GAAP) |
|
$ |
1.27 |
|
|
$ |
1.07 |
|
|
$ |
0.20 |
|
|
|
18.7 |
|
Impact of amortization of intangible assets |
|
|
0.66 |
|
|
|
0.58 |
|
|
|
0.08 |
|
|
|
13.8 |
|
Impact of change in LIFO reserve |
|
|
0.26 |
|
|
|
0.33 |
|
|
|
(0.07 |
) |
|
|
(21.2 |
) |
Impact of stock-based compensation |
|
|
0.14 |
|
|
|
0.14 |
|
|
|
— |
|
|
|
— |
|
Impact of (gain) loss on fuel derivatives |
|
|
(0.01 |
) |
|
|
0.02 |
|
|
|
(0.03 |
) |
|
|
(150.0 |
) |
Impact of acquisition, integration & reorganization charges |
|
|
0.09 |
|
|
|
0.04 |
|
|
|
0.05 |
|
|
|
125.0 |
|
Impact of other adjustment items |
|
|
(0.06 |
) |
|
|
0.03 |
|
|
|
(0.09 |
) |
|
|
(300.0 |
) |
Tax impact of above adjustments |
|
|
(0.30 |
) |
|
|
(0.30 |
) |
|
|
— |
|
|
|
— |
|
Adjusted Diluted Earnings per Share (Non-GAAP) |
|
$ |
2.05 |
|
|
$ |
1.91 |
|
|
$ |
0.14 |
|
|
|
7.3 |
|
A. |
Includes an increase 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 an |
| (In millions) |
|
Six Months Ended
|
|
Six Months Ended
|
||||
Net cash provided by operating activities (GAAP) |
|
$ |
554.0 |
|
|
$ |
424.5 |
|
Purchases of property, plant and equipment |
|
|
(147.1 |
) |
|
|
(98.1 |
) |
Free cash flow (Non-GAAP) |
|
$ |
406.9 |
|
|
$ |
326.4 |
|
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 |
||||||||||||||
|
|
December 30, 2023 |
|
December 31, 2022 |
|
Change |
|
% |
||||||||
Foodservice |
|
$ |
7,079.3 |
|
|
$ |
6,896.6 |
|
|
$ |
182.7 |
|
|
|
2.6 |
|
Vistar |
|
|
1,201.9 |
|
|
|
1,118.9 |
|
|
|
83.0 |
|
|
|
7.4 |
|
Convenience |
|
|
5,941.4 |
|
|
|
5,864.1 |
|
|
|
77.3 |
|
|
|
1.3 |
|
Corporate & All Other |
|
|
227.7 |
|
|
|
154.0 |
|
|
|
73.7 |
|
|
|
47.9 |
|
Intersegment Eliminations |
|
|
(154.6 |
) |
|
|
(134.7 |
) |
|
|
(19.9 |
) |
|
|
(14.8 |
) |
Total net sales |
|
$ |
14,295.7 |
|
|
$ |
13,898.9 |
|
|
$ |
396.8 |
|
|
|
2.9 |
|
|
|
Six Months Ended |
||||||||||||||
|
|
December 30, 2023 |
|
December 31, 2022 |
|
Change |
|
% |
||||||||
Foodservice |
|
$ |
14,356.3 |
|
|
$ |
14,226.6 |
|
|
$ |
129.7 |
|
|
|
0.9 |
|
Vistar |
|
|
2,452.3 |
|
|
|
2,209.0 |
|
|
|
243.3 |
|
|
|
11.0 |
|
Convenience |
|
|
12,278.4 |
|
|
|
12,151.0 |
|
|
|
127.4 |
|
|
|
1.0 |
|
Corporate & All Other |
|
|
468.1 |
|
|
|
306.3 |
|
|
|
161.8 |
|
|
|
52.8 |
|
Intersegment Eliminations |
|
|
(320.8 |
) |
|
|
(274.7 |
) |
|
|
(46.1 |
) |
|
|
(16.8 |
) |
Total net sales |
|
$ |
29,234.3 |
|
|
$ |
28,618.2 |
|
|
$ |
616.1 |
|
|
|
2.2 |
|
Adjusted EBITDA |
||||||||||||||||
|
|
Three Months Ended |
||||||||||||||
|
|
December 30, 2023 |
|
December 31, 2022 |
|
Change |
|
% |
||||||||
Foodservice |
|
$ |
224.1 |
|
|
$ |
214.2 |
|
|
$ |
9.9 |
|
|
|
4.6 |
|
Vistar |
|
|
93.6 |
|
|
|
92.2 |
|
|
|
1.4 |
|
|
|
1.5 |
|
Convenience |
|
|
83.5 |
|
|
|
69.3 |
|
|
|
14.2 |
|
|
|
20.5 |
|
Corporate & All Other |
|
|
(55.8 |
) |
|
|
(66.9 |
) |
|
|
11.1 |
|
|
|
16.6 |
|
Total Adjusted EBITDA |
|
$ |
345.4 |
|
|
$ |
308.8 |
|
|
$ |
36.6 |
|
|
|
11.9 |
|
|
|
Six Months Ended |
||||||||||||||
|
|
December 30, 2023 |
|
December 31, 2022 |
|
Change |
|
% |
||||||||
Foodservice |
|
$ |
470.1 |
|
|
$ |
450.3 |
|
|
$ |
19.8 |
|
|
|
4.4 |
|
Vistar |
|
|
182.2 |
|
|
|
166.6 |
|
|
|
15.6 |
|
|
|
9.4 |
|
Convenience |
|
|
178.2 |
|
|
|
174.9 |
|
|
|
3.3 |
|
|
|
1.9 |
|
Corporate & All Other |
|
|
(101.3 |
) |
|
|
(128.3 |
) |
|
|
27.0 |
|
|
|
21.0 |
|
Total Adjusted EBITDA |
|
$ |
729.2 |
|
|
$ |
663.5 |
|
|
$ |
65.7 |
|
|
|
9.9 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240207550707/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
FAQ
What was the percentage increase in net sales for the second quarter of fiscal 2024?
What was the percentage increase in net income for the first half of fiscal 2024?
What was the percentage increase in adjusted EBITDA for the first half of fiscal 2024?
What was the operating cash flow in the first half of fiscal 2024?
How much free cash flow was delivered in the first half of fiscal 2024?
