US Foods Reports Fourth Quarter and Fiscal Year 2023 Earnings
- None.
- None.
Insights
The reported growth in net sales and adjusted EBITDA by US Foods Holding Corp. indicates a robust performance in fiscal year 2023, with a substantial increase in gross profit and net income available to common shareholders. The company's focus on independent restaurant, healthcare and hospitality customer segments appears to have paid off, with notable case volume growth in these areas. The achievement of the net leverage target and the execution of share repurchases demonstrate a strong financial strategy and disciplined capital management.
From a financial perspective, the reduction in net debt and the improvement in the net debt to adjusted EBITDA ratio from 3.5x to 2.8x are positive signs of the company's improved leverage and financial health. The planned acquisitions, such as the purchase of IWC Food Service, are strategic moves to expand market presence and could contribute to future revenue streams. However, investors should consider the integration risks and the potential impact on the company's financials post-acquisition.
The provided guidance for fiscal year 2024, with an expected increase in adjusted EBITDA, suggests confidence in the company's continued growth trajectory. However, the lack of reconciliation for forward-looking non-GAAP measures due to unpredictability of certain items could introduce some uncertainty for investors attempting to forecast future performance.
The foodservice distribution industry is highly competitive and sensitive to changes in consumer behavior and economic conditions. US Foods' reported case volume growth, particularly in the independent restaurant sector, reflects a potential rebound in the foodservice industry as it recovers from the impacts of the pandemic. The emphasis on cost optimization and pricing strategies has been effective in improving margins, as indicated by the increase in gross profit as a percentage of net sales.
US Foods' strategy of targeting underserved markets through tuck-in acquisitions aligns with industry trends of consolidation to achieve economies of scale and enhance distribution networks. The company's growth in healthcare and hospitality volumes also align with broader industry shifts towards diversification of customer base to mitigate risks associated with reliance on a single segment.
The increase in cash capital expenditures, primarily for technological and logistical investments, suggests a focus on long-term operational efficiency and could position the company favorably in an industry where timely delivery and service quality are critical. The strong free cash flow generation highlights the company's operational efficiency and could provide flexibility for further strategic initiatives.
The financial results of US Foods Holding Corp. provide insight into the broader economic environment, particularly in the food distribution sector. The company's performance, with increased sales and profitability, may signal a healthy demand environment in the foodservice industry. However, it's important to consider the broader macroeconomic factors such as inflation, which can affect both the cost of goods sold and consumer spending patterns.
US Foods' ability to optimize pricing in the face of potentially rising input costs is indicative of pricing power, which may stem from a differentiated business model or strong market position. This capability is crucial in maintaining profitability during inflationary periods. Furthermore, the company's focus on cost-saving initiatives, such as routing improvements and labor productivity, suggests a proactive approach to managing operational expenses in an uncertain economic climate.
The reduction in leverage is a positive development, especially if interest rates continue to rise, as it reduces interest expense and financial risk. The forward-looking guidance provided by the company, despite the absence of detailed reconciliation, reflects a degree of optimism about future performance. However, stakeholders should remain aware of the potential impact of economic headwinds on discretionary consumer spending, which could influence the foodservice industry's outlook.
Net Sales Grew
Adjusted EBITDA Grew
Strong Cash Flow, Achieved Net Leverage Target, Repurchased Shares and Executed Accretive Tuck-in M&A
Announces Fiscal Year 2024 Guidance, Including Adjusted EBITDA of
Fourth Quarter Fiscal 2023 Highlights
-
Net sales increased
4.9% to$8.9 billion -
Total case volume increased
5.6% ; independent restaurant case volume increased7.3% -
Gross profit increased
9.4% to$1.6 billion -
Net income available to common shareholders was
$147 million -
Adjusted EBITDA increased
10.9% to$388 million -
Diluted EPS increased
59.5% to$0.59 16.4% to$0.64
Fiscal Year 2023 Highlights
-
Net sales increased
4.5% to$35.6 billion -
Total case volume increased
4.4% ; independent restaurant case volume increased6.9% -
Gross profit increased
11.9% to$6.1 billion -
Net income available to common shareholders was
$499 million -
Adjusted EBITDA increased
19.0% to$1.56 billion -
Diluted EPS increased
100.0% to$2.02 22.9% to$2.63
“2023 was an exciting year at US Foods and marked my first full year with this strong company. Through execution of our strategy and long-range plan, we captured profitable market share and enhanced margins,” said Dave Flitman, CEO. “This resulted in record full-year 2023 Adjusted EBITDA of
“I am proud of our associates’ ability to deliver solid financial results in the fourth quarter and record Adjusted EBITDA for 2023,” added Dirk Locascio, CFO. “We generated strong free cash flow, reduced our debt, invested organically and inorganically via two tuck-in acquisitions that expand our position in underserved markets and repurchased shares. Our debt reduction and Adjusted EBITDA growth resulted in net leverage reduction from 3.5x at the end of 2022 to 2.8x at the end of 2023, within our targeted range. I am confident that our 2023 financial performance and our healthy balance sheet will enable us to execute our capital allocation priorities in 2024.”
Fourth Quarter Fiscal 2023 Results
Net sales of
Gross profit of
Operating expenses of
Net income available to common shareholders was
Fiscal Year 2023 Results
Net sales of
Gross profit of
Operating expenses of
Net income available to common shareholders was
Cash Flow and Debt
Cash flow provided by operating activities for fiscal 2023 was
During the fourth quarter of fiscal 2023, the Company repurchased 1.6 million shares of common stock at an aggregate purchase price of
Net Debt at the end of fiscal year 2023 was
M&A Update
Subsequent to quarter-end, the Company has signed a definitive agreement to acquire IWC Food Service, a broadline distributor which serves the greater
During the fourth quarter of fiscal 2023, the Company acquired Saladino's Foodservice, an independently owned broadline distributor based in central
Outlook for Fiscal Year 20241
The Company is providing First Quarter 2024 guidance of:
-
Adjusted EBITDA of
$340 $355 million
The Company is providing Fiscal Year 2024 guidance of:
-
Net Sales of
$37.5 $38.5 billion -
Adjusted EBITDA of
$1.69 $1.74 billion -
Adjusted Diluted EPS of
$3.00 $3.20
____________________
1 The Company is not providing a reconciliation of certain forward-looking non-GAAP financial measures, including Adjusted EBITDA and Adjusted Diluted EPS, because the Company is unable to predict with reasonable certainty the financial impact of certain significant items, including restructuring costs and asset impairment charges, share-based compensation expenses, non-cash impacts of LIFO reserve adjustments, losses on extinguishments of debt, business transformation costs, other gains and losses, business acquisition and integration related costs and diluted earnings per share. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance periods. For the same reasons, the Company is unable to address the significance of the unavailable information, which could be material to future results.
Conference Call and Webcast Information
US Foods will host a live webcast to discuss fourth quarter and fiscal year 2023 results on February 15, 2024 at 8 a.m. CST. The call can also be accessed live over the phone by dialing (877) 344-2001; the conference ID number is 2528845.
Presentation slides will be available shortly before the webcast begins. The webcast, slides, and a copy of this press release can be found in the Investor Relations section of our website at https://ir.usfoods.com.
About US Foods
With a promise to help its customers Make It, US Foods is one of America’s great food companies and a leading foodservice distributor, partnering with approximately 250,000 restaurants and foodservice operators to help their businesses succeed. With more than 70 broadline locations and approximately 90 cash and carry stores, US Foods and its 30,000 associates provides its customers with a broad and innovative food offering and a comprehensive suite of e-commerce, technology and business solutions. US Foods is headquartered in
Forward-Looking Statements
Statements in this press release which are not historical in nature, including those under the heading “Outlook for Fiscal Year 2024,” are “forward-looking statements” within the meaning of the federal securities laws. These statements often include words such as “believe,” “expect,” “project,” “anticipate,” “intend,” “plan,” “outlook,” “estimate,” “target,” “seek,” “will,” “may,” “would,” “should,” “could,” “forecast,” “mission,” “strive,” “more,” “goal,” or similar expressions (although not all forward-looking statements may contain such words) and are based upon various assumptions and our experience in the industry, as well as historical trends, current conditions, and expected future developments. However, you should understand that these statements are not guarantees of performance or results and there are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from those expressed in the forward-looking statements, including, among others: economic factors affecting consumer confidence and discretionary spending and reducing the consumption of food prepared away from home; cost inflation/deflation and commodity volatility; competition; reliance on third party suppliers and interruption of product supply or increases in product costs; changes in our relationships with customers and group purchasing organizations; our ability to increase or maintain the highest margin portions of our business; achievement of expected benefits from cost savings initiatives; increases in fuel costs; changes in consumer eating habits; cost and pricing structures; the impact of climate change or related legal, regulatory or market measures; impairment charges for goodwill, indefinite-lived intangible assets or other long-lived assets; the impact of governmental regulations; product recalls and product liability claims; our reputation in the industry; labor relations and increased labor costs and continued access to qualified and diverse labor; indebtedness and restrictions under agreements governing our indebtedness; interest rate increases; disruption of existing technologies and implementation of new technologies; cybersecurity incidents and other technology disruptions; risks associated with intellectual property, including potential infringement; effective consummation of pending acquisitions and effective integration of acquired businesses; potential costs associated with shareholder activism; changes in tax laws and regulations and resolution of tax disputes; certain provisions in our governing documents; health and safety risks to our associates and related losses; adverse judgments or settlements resulting from litigation; extreme weather conditions, natural disasters and other catastrophic events; and management of retirement benefits and pension obligations.
For a detailed discussion of these risks, uncertainties and other factors that could cause our actual results to differ materially from those anticipated or expressed in any forward-looking statements, see the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 30, 2023 filed with the Securities and Exchange Commission (“SEC”). Additional risks and uncertainties are discussed from time to time in current, quarterly and annual reports filed by the Company with the SEC, which are available on the SEC’s website at www.sec.gov. Additionally, we operate in a highly competitive and rapidly changing environment; new risks and uncertainties may emerge from time to time, and it is not possible to predict all risks nor identify all uncertainties. The forward-looking statements contained in this press release speak only as of the date of this press release and are based on information and estimates available to us at this time. We undertake no obligation to update or revise any forward-looking statements, except as may be required by law.
Non-GAAP Financial Measures
We report our financial results in accordance with
We use Adjusted Gross profit and Adjusted Operating expenses as supplemental measures to GAAP measures to focus on period-over-period changes in our business and believe this information is helpful to investors. Adjusted Gross profit is Gross profit adjusted to remove the impact of the LIFO inventory reserve adjustments. Adjusted Operating expenses are Operating expenses adjusted to exclude amounts that we do not consider part of our core operating results when assessing our performance.
We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA margin provide meaningful supplemental information about our operating performance because they exclude amounts that we do not consider part of our core operating results when assessing our performance. EBITDA is Net income (loss), plus Interest expense-net, Income tax provision (benefit), and Depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for (1) Restructuring costs and asset impairment charges; (2) Share-based compensation expense; (3) the non-cash impact of LIFO reserve adjustments; (4) loss on extinguishment of debt; (5) Business transformation costs; and (6) other gains, losses or costs as specified in the agreements governing our indebtedness. Adjusted EBITDA margin is Adjusted EBITDA divided by total net sales.
We use Net Debt as a supplemental measure to GAAP measures to review the liquidity of our operations. Net Debt is defined as total debt net of total Cash, cash equivalents and restricted cash remaining on the balance sheet as of the end of the most recent fiscal quarter. We believe that Net Debt is a useful financial metric to assess our ability to pursue business opportunities and investments. Net Debt is not a measure of our liquidity under GAAP and should not be considered as an alternative to Cash Flows Provided by Operations or Cash Flows Used in Financing Activities.
We believe that Adjusted Net income is a useful measure of operating performance for both management and investors because it excludes items that are not reflective of our core operating performance and provides an additional view of our operating performance including depreciation, interest expense, and Income taxes on a consistent basis from period to period. Adjusted Net income is Net income (loss) excluding such items as restructuring costs and asset impairment charges, Share-based compensation expense, the non-cash impacts of LIFO reserve adjustments, amortization expense, loss on extinguishment of debt, Business transformation costs and other items, and adjusted for the tax effect of the exclusions and discrete tax items. We believe that Adjusted Net income may be used by investors, analysts, and other interested parties to facilitate period-over-period comparisons and provides additional clarity as to how factors and trends impact our operating performance.
We use Adjusted Diluted Earnings per Share, which is calculated by adjusting the most directly comparable GAAP financial measure, Diluted Earnings per Share, by excluding the same items excluded in our calculation of Adjusted EBITDA to the extent that each such item was included in the applicable GAAP financial measure. We believe the presentation of Adjusted Diluted Earnings per Share is useful to investors because the measurement excludes amounts that we do not consider part of our core operating results when assessing our performance. We also believe that the presentation of Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Diluted Earnings per Share is useful to investors because these metrics may be used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies in our industry.
Management uses these non-GAAP financial measures (a) to evaluate our historical and prospective financial performance as well as our performance relative to our competitors as they assist in highlighting trends, (b) to set internal sales targets and spending budgets, (c) to measure operational profitability and the accuracy of forecasting, (d) to assess financial discipline over operational expenditures, and (e) as an important factor in determining variable compensation for management and employees. EBITDA and Adjusted EBITDA are also used in connection with certain covenants and restricted activities under the agreements governing our indebtedness. We also believe these and similar non-GAAP financial measures are frequently used by securities analysts, investors, and other interested parties to evaluate companies in our industry.
We caution readers that our definitions of Adjusted Gross profit, Adjusted Operating expenses, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Net Debt, Adjusted Net income and Adjusted Diluted EPS may not be calculated in the same manner as similar measures used by other companies. Definitions and reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures are included in the schedules attached to this press release.
US FOODS HOLDING CORP. Consolidated Balance Sheets (Unaudited) |
||||||||
($ in millions) |
|
December 30,
|
|
December 31,
|
||||
|
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
269 |
|
|
$ |
211 |
|
Accounts receivable, less allowances of |
|
|
1,854 |
|
|
|
1,705 |
|
Vendor receivables, less allowances of |
|
|
156 |
|
|
|
143 |
|
Inventories—net |
|
|
1,600 |
|
|
|
1,616 |
|
Prepaid expenses |
|
|
138 |
|
|
|
124 |
|
Assets held for sale |
|
|
— |
|
|
|
2 |
|
Other current assets |
|
|
14 |
|
|
|
19 |
|
Total current assets |
|
|
4,031 |
|
|
|
3,820 |
|
Property and equipment—net |
|
|
2,280 |
|
|
|
2,171 |
|
Goodwill |
|
|
5,697 |
|
|
|
5,625 |
|
Other intangibles—net |
|
|
803 |
|
|
|
785 |
|
Other assets |
|
|
376 |
|
|
|
372 |
|
Total assets |
|
$ |
13,187 |
|
|
$ |
12,773 |
|
|
|
|
|
|
||||
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Cash overdraft liability |
|
$ |
220 |
|
|
$ |
175 |
|
Accounts payable |
|
|
2,051 |
|
|
|
1,855 |
|
Accrued expenses and other current liabilities |
|
|
731 |
|
|
|
650 |
|
Current portion of long-term debt |
|
|
110 |
|
|
|
116 |
|
Total current liabilities |
|
|
3,112 |
|
|
|
2,796 |
|
Long-term debt |
|
|
4,564 |
|
|
|
4,738 |
|
Deferred tax liabilities |
|
|
293 |
|
|
|
298 |
|
Other long-term liabilities |
|
|
469 |
|
|
|
446 |
|
Total liabilities |
|
|
8,438 |
|
|
|
8,278 |
|
Mezzanine equity: |
|
|
|
|
||||
Series A convertible preferred stock |
|
|
— |
|
|
|
534 |
|
Shareholders' equity: |
|
|
|
|
||||
Common stock |
|
|
3 |
|
|
|
2 |
|
Additional paid-in capital |
|
|
3,663 |
|
|
|
3,036 |
|
Retained earnings |
|
|
1,509 |
|
|
|
1,010 |
|
Accumulated other comprehensive loss |
|
|
(115 |
) |
|
|
(73 |
) |
Treasury Stock |
|
|
(311 |
) |
|
|
(14 |
) |
Total shareholders’ equity |
|
|
4,749 |
|
|
|
3,961 |
|
Total liabilities, mezzanine equity and shareholders' equity |
|
$ |
13,187 |
|
|
$ |
12,773 |
|
US FOODS HOLDING CORP. Consolidated Statements of Operations (Unaudited) |
||||||||||||||||
|
|
For the quarter ended |
|
For the year ended |
||||||||||||
($ in millions, except share and per share data) |
|
December 30,
|
|
December 31,
|
|
December 30,
|
|
December 31,
|
||||||||
Net sales |
|
$ |
8,936 |
|
|
$ |
8,515 |
|
|
$ |
35,597 |
|
|
$ |
34,057 |
|
Cost of goods sold |
|
|
7,346 |
|
|
|
7,061 |
|
|
|
29,449 |
|
|
|
28,565 |
|
Gross profit |
|
|
1,590 |
|
|
|
1,454 |
|
|
|
6,148 |
|
|
|
5,492 |
|
Distribution, selling and administrative costs |
|
|
1,298 |
|
|
|
1,246 |
|
|
|
5,117 |
|
|
|
4,886 |
|
Restructuring costs and asset impairment charges |
|
|
14 |
|
|
|
12 |
|
|
|
14 |
|
|
|
12 |
|
Total operating expenses |
|
|
1,312 |
|
|
|
1,258 |
|
|
|
5,131 |
|
|
|
4,898 |
|
Operating income |
|
|
278 |
|
|
|
196 |
|
|
|
1,017 |
|
|
|
594 |
|
Other income—net |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
(6 |
) |
|
|
(22 |
) |
Interest expense—net |
|
|
80 |
|
|
|
75 |
|
|
|
324 |
|
|
|
255 |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
21 |
|
|
|
— |
|
Income before income taxes |
|
|
200 |
|
|
|
127 |
|
|
|
678 |
|
|
|
361 |
|
Income tax provision |
|
|
53 |
|
|
|
34 |
|
|
|
172 |
|
|
|
96 |
|
Net income |
|
$ |
147 |
|
|
$ |
93 |
|
|
$ |
506 |
|
|
$ |
265 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income |
|
$ |
147 |
|
|
$ |
93 |
|
|
$ |
506 |
|
|
$ |
265 |
|
Series A convertible preferred stock dividends |
|
|
— |
|
|
|
(10 |
) |
|
|
(7 |
) |
|
|
(37 |
) |
Net income available to common shareholders |
|
$ |
147 |
|
|
$ |
83 |
|
|
$ |
499 |
|
|
$ |
228 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
0.60 |
|
|
$ |
0.37 |
|
|
$ |
2.09 |
|
|
$ |
1.02 |
|
Diluted |
|
$ |
0.59 |
|
|
$ |
0.37 |
|
|
$ |
2.02 |
|
|
$ |
1.01 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
245,663,206 |
|
|
|
224,887,647 |
|
|
|
239,253,961 |
|
|
|
224,102,656 |
|
Diluted |
|
|
248,204,734 |
|
|
|
226,995,767 |
|
|
|
249,984,664 |
|
|
|
226,474,421 |
|
US FOODS HOLDING CORP. Consolidated Statements of Cash Flows (Unaudited) |
||||||||
|
|
For the year ended |
||||||
($ in millions) |
|
December 30,
|
|
December 31,
|
||||
Cash Flows From Operating Activities: |
|
|
|
|
||||
Net income |
|
$ |
506 |
|
|
$ |
265 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
395 |
|
|
|
372 |
|
Gain on disposal of property and equipment—net |
|
|
(6 |
) |
|
|
(5 |
) |
Tangible asset impairment charges |
|
|
1 |
|
|
|
10 |
|
Loss on extinguishment of debt |
|
|
21 |
|
|
|
— |
|
Amortization of deferred financing costs |
|
|
17 |
|
|
|
12 |
|
Deferred tax provision |
|
|
9 |
|
|
|
17 |
|
Share-based compensation expense |
|
|
56 |
|
|
|
45 |
|
Provision for doubtful accounts |
|
|
24 |
|
|
|
6 |
|
Changes in operating assets and liabilities, net of business acquisitions: |
|
|
|
|
||||
Increase in receivables |
|
|
(157 |
) |
|
|
(240 |
) |
Decrease in inventories |
|
|
61 |
|
|
|
70 |
|
Increase in prepaid expenses and other assets |
|
|
(67 |
) |
|
|
(24 |
) |
Increase in accounts payable and cash overdraft liability |
|
|
200 |
|
|
|
193 |
|
Increase in accrued expenses and other liabilities |
|
|
80 |
|
|
|
44 |
|
Net cash provided by operating activities |
|
|
1,140 |
|
|
|
765 |
|
Cash Flows From Investing Activities: |
|
|
|
|
||||
Acquisition of businesses - net of cash received |
|
|
(196 |
) |
|
|
— |
|
Proceeds from sales of property and equipment |
|
|
10 |
|
|
|
10 |
|
Purchases of property and equipment |
|
|
(309 |
) |
|
|
(265 |
) |
Net cash used in investing activities |
|
|
(495 |
) |
|
|
(255 |
) |
Cash Flows From Financing Activities: |
|
|
|
|
||||
Repurchase of Senior Note Debt |
|
|
(1,000 |
) |
|
|
— |
|
Issuance of new Senior Note Debt |
|
|
1,000 |
|
|
|
— |
|
Principal payments on debt repricing |
|
|
(43 |
) |
|
|
— |
|
Proceeds from debt repricing |
|
|
43 |
|
|
|
— |
|
Proceeds from debt borrowings |
|
|
456 |
|
|
|
1,207 |
|
Principal payments on debt and financing leases |
|
|
(766 |
) |
|
|
(1,620 |
) |
Dividends paid on Series A convertible preferred stock |
|
|
(7 |
) |
|
|
(37 |
) |
Debt financing costs and fees |
|
|
(11 |
) |
|
|
(4 |
) |
Repurchase of common stock |
|
|
(294 |
) |
|
|
(14 |
) |
Proceeds from employee stock purchase plan |
|
|
24 |
|
|
|
22 |
|
Proceeds from exercise of stock options |
|
|
26 |
|
|
|
15 |
|
Purchase of interest rate caps |
|
|
(3 |
) |
|
|
— |
|
Tax withholding payments for net share-settled equity awards |
|
|
(12 |
) |
|
|
(16 |
) |
Net cash used in financing activities |
|
|
(587 |
) |
|
|
(447 |
) |
Net increase in cash and cash equivalents |
|
|
58 |
|
|
|
63 |
|
Cash, cash equivalents and restricted cash—beginning of year |
|
|
211 |
|
|
|
148 |
|
Cash, cash equivalents and restricted cash—end of year |
|
$ |
269 |
|
|
$ |
211 |
|
Supplemental disclosures of cash flow information: |
|
|
|
|
||||
Conversion of Series A Convertible Preferred Stock |
|
$ |
534 |
|
|
$ |
— |
|
Interest paid—net of amounts capitalized |
|
|
294 |
|
|
|
243 |
|
Income taxes paid—net |
|
|
161 |
|
|
|
68 |
|
Property and equipment purchases included in accounts payable |
|
|
39 |
|
|
|
36 |
|
Leased assets obtained in exchange for financing lease liabilities |
|
|
125 |
|
|
|
207 |
|
Leased assets obtained in exchange for operating lease liabilities |
|
|
67 |
|
|
|
41 |
|
Cashless exercise of stock options |
|
|
2 |
|
|
|
1 |
|
US FOODS HOLDING CORP. Non-GAAP Reconciliation (Unaudited) |
|||||||||||||||
|
|
For the quarter ended |
|||||||||||||
|
|
Consolidated US Foods |
|||||||||||||
($ in millions, except share and per share data) |
|
December 30,
|
|
December 31,
|
|
Change |
|
% |
|||||||
Net income available to common shareholders (GAAP) |
|
$ |
147 |
|
|
$ |
83 |
|
|
$ |
64 |
|
|
77.1 |
% |
Series A Preferred Stock Dividends |
|
|
— |
|
|
|
(10 |
) |
|
|
10 |
|
|
(100.0 |
)% |
Net income (GAAP) |
|
|
147 |
|
|
|
93 |
|
|
|
54 |
|
|
58.1 |
% |
Interest expense—net |
|
|
80 |
|
|
|
75 |
|
|
|
5 |
|
|
6.7 |
% |
Income tax provision |
|
|
53 |
|
|
|
34 |
|
|
|
19 |
|
|
55.9 |
% |
Depreciation expense |
|
|
93 |
|
|
|
87 |
|
|
|
6 |
|
|
6.9 |
% |
Amortization expense |
|
|
12 |
|
|
|
12 |
|
|
|
— |
|
|
— |
% |
EBITDA (Non-GAAP) |
|
|
385 |
|
|
|
301 |
|
|
|
84 |
|
|
27.9 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|||||||
Restructuring costs and asset impairment charges (1) |
|
|
12 |
|
|
|
12 |
|
|
|
— |
|
|
— |
% |
Share-based compensation expense (2) |
|
|
13 |
|
|
|
11 |
|
|
|
2 |
|
|
18.2 |
% |
LIFO reserve adjustments (3) |
|
|
(43 |
) |
|
|
4 |
|
|
|
(47 |
) |
|
NM |
|
Business transformation costs (4) |
|
|
12 |
|
|
|
11 |
|
|
|
1 |
|
|
9.1 |
% |
Business acquisition and integration related costs and other (5) |
|
|
9 |
|
|
|
11 |
|
|
|
(2 |
) |
|
(18.2 |
)% |
Adjusted EBITDA (Non-GAAP) |
|
|
388 |
|
|
|
350 |
|
|
|
38 |
|
|
10.9 |
% |
Depreciation expense |
|
|
(93 |
) |
|
|
(87 |
) |
|
|
(6 |
) |
|
6.9 |
% |
Interest expense—net |
|
|
(80 |
) |
|
|
(75 |
) |
|
|
(5 |
) |
|
6.7 |
% |
Income tax provision, as adjusted (6) |
|
|
(55 |
) |
|
|
(50 |
) |
|
|
(5 |
) |
|
10.0 |
% |
Adjusted Net income (Non-GAAP) |
|
$ |
160 |
|
|
$ |
138 |
|
|
$ |
22 |
|
|
15.9 |
% |
|
|
|
|
|
|
|
|
|
|||||||
Diluted EPS (GAAP) |
|
$ |
0.59 |
|
|
$ |
0.37 |
|
|
$ |
0.22 |
|
|
59.5 |
% |
Restructuring costs and asset impairment charges (1) |
|
|
0.05 |
|
|
|
0.05 |
|
|
|
— |
|
|
— |
% |
Share-based compensation expense (2) |
|
|
0.05 |
|
|
|
0.04 |
|
|
|
0.01 |
|
|
25.0 |
% |
LIFO reserve adjustments (3) |
|
|
(0.17 |
) |
|
|
0.02 |
|
|
|
(0.19 |
) |
|
NM |
|
Business transformation costs (4) |
|
|
0.05 |
|
|
|
0.04 |
|
|
|
0.01 |
|
|
25.0 |
% |
Business acquisition and integration related costs and other (5) |
|
|
0.04 |
|
|
|
0.04 |
|
|
|
— |
|
|
— |
% |
Income tax provision, as adjusted (6) |
|
|
0.03 |
|
|
|
(0.01 |
) |
|
|
0.04 |
|
|
NM |
|
Adjusted Diluted EPS (Non-GAAP)(7) |
|
$ |
0.64 |
|
|
$ |
0.55 |
|
|
$ |
0.09 |
|
|
16.4 |
% |
|
|
|
|
|
|
|
|
|
|||||||
Weighted-average diluted shares outstanding (Non- GAAP) (8) |
|
|
248,204,734 |
|
|
|
251,753,008 |
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Gross profit (GAAP) |
|
$ |
1,590 |
|
|
$ |
1,454 |
|
|
$ |
136 |
|
|
9.4 |
% |
LIFO reserve adjustments (3) |
|
|
(43 |
) |
|
|
4 |
|
|
|
(47 |
) |
|
NM |
|
Adjusted Gross profit (Non-GAAP) |
|
$ |
1,547 |
|
|
$ |
1,458 |
|
|
$ |
89 |
|
|
6.1 |
% |
|
|
|
|
|
|
|
|
|
|||||||
Operating expenses (GAAP) |
|
$ |
1,312 |
|
|
$ |
1,258 |
|
|
$ |
54 |
|
|
4.3 |
% |
Depreciation expense |
|
|
(93 |
) |
|
|
(87 |
) |
|
|
(6 |
) |
|
6.9 |
% |
Amortization expense |
|
|
(12 |
) |
|
|
(12 |
) |
|
|
— |
|
|
— |
% |
Restructuring costs and asset impairment charges (1) |
|
|
(12 |
) |
|
|
(12 |
) |
|
|
— |
|
|
— |
% |
Share-based compensation expense (2) |
|
|
(13 |
) |
|
|
(11 |
) |
|
|
(2 |
) |
|
18.2 |
% |
Business transformation costs (4) |
|
|
(12 |
) |
|
|
(11 |
) |
|
|
(1 |
) |
|
9.1 |
% |
Business acquisition and integration related costs and other (5) |
|
|
(9 |
) |
|
|
(11 |
) |
|
|
2 |
|
|
(18.2 |
)% |
Adjusted Operating expenses (Non-GAAP) |
|
$ |
1,161 |
|
|
$ |
1,114 |
|
|
$ |
47 |
|
|
4.2 |
% |
| NM - Not Meaningful | |
(1) |
Consists primarily of non-CEO severance and related costs associated with organizational realignment and other impairment charges. For the quarter ended December 31, 2022, also consists of the write-off of old leases ROU asset and lease liability of |
(2) |
Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. |
(3) |
Represents the impact of LIFO reserve adjustments. |
(4) |
Transformational costs represent non-recurring expenses prior to formal launch of strategic projects with anticipated long-term benefits to the Company. These costs generally relate to third party consulting and non-capitalizable construction or technology. For the quarter ended December 30, 2023, business transformation costs related to projects associated with information technology infrastructure initiatives. For the quarter ended December 31, 2022, business transformation costs consist of new facility openings, supply chain strategy improvements, and information technology infrastructure initiatives. |
(5) |
Includes: (i) aggregate acquisition and integration related costs of |
(6) |
Represents our income tax provision adjusted for the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of applicable discrete tax items. Applicable discrete tax items include changes in tax laws or rates, changes related to prior year unrecognized tax benefits, discrete changes in valuation allowances, and excess tax benefits associated with share-based compensation. The tax effect of pre-tax items excluded from Adjusted Net Income is computed using a statutory tax rate after taking into account the impact of permanent differences and valuation allowances. |
(7) |
Adjusted Diluted EPS is calculated as Adjusted net income divided by weighted average diluted shares outstanding (Non-GAAP). |
(8) |
For purposes of the Adjusted Diluted EPS calculation (Non-GAAP), when the Company has net income (GAAP), weighted average diluted shares outstanding (Non-GAAP) is used and assumes conversion of the Series A convertible preferred stock, and, when the Company has net loss (GAAP) and assumed conversion of the Series A convertible preferred stock would be antidilutive, weighted-average diluted shares outstanding (GAAP) is used. |
US FOODS HOLDING CORP. Non-GAAP Reconciliation (Unaudited) |
|||||||||||||||
|
|
For the year ended |
|||||||||||||
|
|
Consolidated US Foods |
|||||||||||||
($ in millions, except share and per share data) |
|
December 30,
|
|
December 31,
|
|
Change |
|
% |
|||||||
Net income available to common shareholders (GAAP) |
|
$ |
499 |
|
|
$ |
228 |
|
|
$ |
271 |
|
|
118.9 |
% |
Series A Preferred Stock Dividends |
|
|
(7 |
) |
|
|
(37 |
) |
|
|
30 |
|
|
(81.1 |
)% |
Net income (GAAP) |
|
|
506 |
|
|
|
265 |
|
|
|
241 |
|
|
90.9 |
% |
Interest expense—net |
|
|
324 |
|
|
|
255 |
|
|
|
69 |
|
|
27.1 |
% |
Income tax provision |
|
|
172 |
|
|
|
96 |
|
|
|
76 |
|
|
79.2 |
% |
Depreciation expense |
|
|
349 |
|
|
|
327 |
|
|
|
22 |
|
|
6.7 |
% |
Amortization expense |
|
|
46 |
|
|
|
45 |
|
|
|
1 |
|
|
2.2 |
% |
EBITDA (Non-GAAP) |
|
|
1,397 |
|
|
|
988 |
|
|
|
409 |
|
|
41.4 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|||||||
Restructuring costs and asset impairment charges (1) |
|
|
14 |
|
|
|
12 |
|
|
|
2 |
|
|
16.7 |
% |
Share-based compensation expense (2) |
|
|
56 |
|
|
|
45 |
|
|
|
11 |
|
|
24.4 |
% |
LIFO reserve adjustments (3) |
|
|
(1 |
) |
|
|
147 |
|
|
|
(148 |
) |
|
(100.7 |
)% |
Loss on extinguishment of debt (4) |
|
|
21 |
|
|
|
— |
|
|
|
21 |
|
|
NM |
|
Business transformation costs (5) |
|
|
28 |
|
|
|
52 |
|
|
|
(24 |
) |
|
(46.2 |
)% |
Business acquisition and integration related costs and other (6) |
|
|
44 |
|
|
|
66 |
|
|
|
(22 |
) |
|
(33.3 |
)% |
Adjusted EBITDA (Non-GAAP) |
|
|
1,559 |
|
|
|
1,310 |
|
|
|
249 |
|
|
19.0 |
% |
Depreciation expense |
|
|
(349 |
) |
|
|
(327 |
) |
|
|
(22 |
) |
|
6.7 |
% |
Interest expense—net |
|
|
(324 |
) |
|
|
(255 |
) |
|
|
(69 |
) |
|
27.1 |
% |
Income tax provision, as adjusted (7) |
|
|
(228 |
) |
|
|
(190 |
) |
|
|
(38 |
) |
|
20.0 |
% |
Adjusted Net income (Non-GAAP) |
|
$ |
658 |
|
|
$ |
538 |
|
|
$ |
120 |
|
|
22.3 |
% |
|
|
|
|
|
|
|
|
|
|||||||
Diluted EPS (GAAP) |
|
$ |
2.02 |
|
|
$ |
1.01 |
|
|
$ |
1.01 |
|
|
100.0 |
% |
Restructuring costs and asset impairment charges (1) |
|
|
0.06 |
|
|
|
0.05 |
|
|
|
0.01 |
|
|
20.0 |
% |
Share-based compensation expense (2) |
|
|
0.22 |
|
|
|
0.18 |
|
|
|
0.04 |
|
|
22.2 |
% |
LIFO reserve adjustments (3) |
|
|
— |
|
|
|
0.59 |
|
|
|
(0.59 |
) |
|
(100.0 |
)% |
Loss on extinguishment of debt (4) |
|
|
0.08 |
|
|
|
— |
|
|
|
0.08 |
|
|
NM |
|
Business transformation costs (5) |
|
|
0.11 |
|
|
|
0.21 |
|
|
|
(0.10 |
) |
|
(47.6 |
)% |
Business acquisition and integration related costs and other (6) |
|
|
0.18 |
|
|
|
0.26 |
|
|
|
(0.08 |
) |
|
(30.8 |
)% |
Income tax provision, as adjusted (7) |
|
|
(0.04 |
) |
|
|
(0.16 |
) |
|
|
0.12 |
|
|
(75.0 |
)% |
Adjusted Diluted EPS (Non-GAAP) (8) |
|
$ |
2.63 |
|
|
$ |
2.14 |
|
|
$ |
0.49 |
|
|
22.9 |
% |
|
|
|
|
|
|
|
|
|
|||||||
Weighted-average diluted shares outstanding (Non-GAAP) (9) |
|
|
249,984,664 |
|
|
|
251,231,662 |
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Gross profit (GAAP) |
|
$ |
6,148 |
|
|
$ |
5,492 |
|
|
$ |
656 |
|
|
11.9 |
% |
LIFO reserve adjustments (3) |
|
|
(1 |
) |
|
|
147 |
|
|
|
(148 |
) |
|
(100.7 |
)% |
Adjusted Gross profit (Non-GAAP) |
|
$ |
6,147 |
|
|
$ |
5,639 |
|
|
$ |
508 |
|
|
9.0 |
% |
|
|
|
|
|
|
|
|
|
|||||||
Operating expenses (GAAP) |
|
$ |
5,131 |
|
|
$ |
4,898 |
|
|
$ |
233 |
|
|
4.8 |
% |
Depreciation expense |
|
|
(349 |
) |
|
|
(327 |
) |
|
|
(22 |
) |
|
6.7 |
% |
Amortization expense |
|
|
(46 |
) |
|
|
(45 |
) |
|
|
(1 |
) |
|
2.2 |
% |
Restructuring costs and asset impairment charges (1) |
|
|
(14 |
) |
|
|
(12 |
) |
|
|
(2 |
) |
|
16.7 |
% |
Share-based compensation expense (2) |
|
|
(56 |
) |
|
|
(45 |
) |
|
|
(11 |
) |
|
24.4 |
% |
Business transformation costs (5) |
|
|
(28 |
) |
|
|
(52 |
) |
|
|
24 |
|
|
(46.2 |
)% |
Business acquisition and integration related costs and other (6) |
|
|
(44 |
) |
|
|
(66 |
) |
|
|
22 |
|
|
(33.3 |
)% |
Adjusted Operating expenses (Non-GAAP) |
|
$ |
4,594 |
|
|
$ |
4,351 |
|
|
$ |
243 |
|
|
5.6 |
% |
| NM - Not Meaningful | |
(1) |
Consists primarily of non-CEO severance and related costs associated with organizational realignment and other impairment charges. For fiscal year 2022, also consists of the write-off of old leases ROU asset and lease liability of |
(2) |
Share-based compensation expense for expected vesting of stock awards and employee stock purchase plan. |
(3) |
Represents the impact of LIFO reserve adjustments. |
(4) |
Includes early redemption premium and the write-off of certain pre-existing debt issuance costs. |
(5) |
Transformational costs represent non-recurring expenses prior to formal launch of strategic projects with anticipated long-term benefits to the Company. These costs generally relate to third party consulting and non-capitalizable construction or technology. For fiscal year 2023, business transformation costs related to projects associated with information technology infrastructure initiatives. For fiscal year 2022, business transformation costs consist of new facility openings, supply chain strategy improvements, and information technology infrastructure initiatives. |
(6) |
Includes: (i) aggregate acquisition and integration related costs of |
(7) |
Represents our income tax provision adjusted for the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of applicable discrete tax items. Applicable discrete tax items include changes in tax laws or rates, changes related to prior year unrecognized tax benefits, discrete changes in valuation allowances, and excess tax benefits associated with share-based compensation. The tax effect of pre-tax items excluded from Adjusted Net Income is computed using a statutory tax rate after taking into account the impact of permanent differences and valuation allowances. |
(8) |
Adjusted Diluted EPS is calculated as Adjusted net income divided by weighted average diluted shares outstanding (Non-GAAP). |
(9) |
For purposes of the Adjusted Diluted EPS calculation (Non-GAAP), when the Company has net income (GAAP), weighted average diluted shares outstanding (non-GAAP) is used and assumes conversion of the Series A convertible preferred stock and, when the Company has net loss (GAAP) and assumed conversion of the Series A convertible preferred stock would be antidilutive, weighted-average diluted shares outstanding (GAAP) is used. |
US FOODS HOLDING CORP. Non-GAAP Reconciliation Net Debt and Net Leverage Ratios |
||||||||
($ in millions, except ratios) |
|
December 30,
|
|
December 31,
|
||||
Total Debt (GAAP) |
|
$ |
4,674 |
|
|
$ |
4,854 |
|
Cash, cash equivalents and restricted cash |
|
|
(269 |
) |
|
|
(211 |
) |
Net Debt (Non-GAAP) |
|
$ |
4,405 |
|
|
$ |
4,643 |
|
Adjusted EBITDA (1) |
|
$ |
1,559 |
|
|
$ |
1,310 |
|
Net Leverage Ratio (2) |
|
|
2.8 |
|
|
|
3.5 |
|
(1) Trailing Twelve Months (TTM) Adjusted EBITDA |
||||||||
(2) Net Debt/TTM Adjusted EBITDA |
||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240214259683/en/
INVESTOR CONTACT:
Mike Neese
(847) 232-5894
Michael.Neese@usfoods.com
MEDIA CONTACT:
Sara Matheu
(847) 720-2392
Sara.Matheu@usfoods.com
Source: US Foods
FAQ
What is US Foods Holding Corp.'s ticker symbol?
What was the percentage increase in net sales for fiscal year 2023?
What was the increase in adjusted EBITDA for fiscal year 2023?
What was the increase in diluted EPS for fiscal year 2023?
What was the total case volume increase for fiscal year 2023?
