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As Of Filer Filing For·On·As Docs:Size 2/12/20 Chefs’ Warehouse, Inc. 8-K:2,9 2/12/20 13:649K |
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Exhibit |
• | Net sales increased 8.2% to $426.5 million for the fourth
quarter of 2019 from $394.1 million for the fourth quarter of 2018. |
• | GAAP net income was $10.9 million, or $0.36 per diluted share, for the fourth quarter of 2019 compared to $8.9 million, or $0.30 per diluted share, in the fourth quarter of 2018. |
• | Adjusted
EPS1 was $0.39 for the fourth quarter of 2019 compared to $0.32 for the fourth quarter of 2018. |
• | Adjusted EBITDA1 was $28.2 million for the fourth quarter of 2019 compared to $24.6 million
for the fourth quarter of 2018. |
• | Net
sales between $1.85 billion and $1.91 billion |
• | Gross profit between $478.0 million and $492.0 million |
• | Net income between $26.9 million and $29.8 million |
• | Net income per diluted share between $0.86
and $0.95 |
• | Adjusted EBITDA1 between $102.0 million and $106.0 million |
• | Adjusted EPS1 between $0.91 and $1.00 |
Thirteen Weeks Ended | Fifty-Two Weeks Ended | ||||||||||||||
Net Sales | $ | 426,507 | $ | 394,056 | $ | 1,591,834 | $ | 1,444,609 | |||||||
Cost
of Sales | 318,811 | 291,764 | 1,185,481 | 1,077,562 | |||||||||||
Gross Profit | 107,696 | 102,292 | 406,353 | 367,047 | |||||||||||
Operating
Expenses | 89,262 | 84,490 | 355,585 | 318,289 | |||||||||||
Operating Income | 18,434 | 17,802 | 50,768 | 48,758 | |||||||||||
Interest
Expense | 4,351 | 5,709 | 18,264 | 20,745 | |||||||||||
Loss on Asset Disposal | 37 | 139 | 101 | 169 | |||||||||||
Income
Before Income Taxes | 14,046 | 11,954 | 32,403 | 27,844 | |||||||||||
Provision
for Income Tax Expense | 3,158 | 3,072 | 8,210 | 7,442 | |||||||||||
Net
Income | $ | 10,888 | $ | 8,882 | $ | 24,193 | $ | 20,402 | |||||||
Net
Income Per Share: | |||||||||||||||
Basic | $ | 0.37 | $ | 0.30 | $ | 0.82 | $ | 0.71 | |||||||
Diluted | $ | 0.36 | $ | 0.30 | $ | 0.81 | $ | 0.70 | |||||||
Weighted
Average Common Shares Outstanding: | |||||||||||||||
Basic | 29,595,723 | 29,438,806 | 29,532,342 | 28,703,265 | |||||||||||
Diluted | 31,134,821 | 29,828,252 | 30,073,338 | 29,678,919 |
(unaudited) | |||||||
Cash | $ | 140,233 | $ | 42,410 | |||
Accounts
receivable, net | 175,044 | 161,758 | |||||
Inventories, net | 124,056 | 112,614 | |||||
Prepaid expenses and other current assets | 13,823 | 11,953 | |||||
Total
current assets | 453,156 | 328,735 | |||||
Equipment, leasehold improvements and software, net | 92,846 | 85,276 | |||||
Operating
lease right-of-use assets (1) | 127,649 | — | |||||
Goodwill | 197,743 | 184,280 | |||||
Intangible assets, net | 138,751 | 130,033 | |||||
Other
assets | 3,534 | 4,074 | |||||
Total assets | $ | 1,013,679 | $ | 732,398 | |||
Accounts
payable | $ | 94,097 | $ | 87,799 | |||
Accrued liabilities | 29,847 | 24,810 | |||||
Short-term
operating lease liabilities (1) | 17,453 | — | |||||
Accrued compensation | 8,033 | 12,872 | |||||
Current portion of long-term debt | 721 | 61 | |||||
Total
current liabilities | 150,151 | 125,542 | |||||
Long-term debt, net of current portion | 386,106 | 278,169 | |||||
Operating
lease liabilities (1) | 120,572 | — | |||||
Deferred taxes, net | 10,883 | 9,601 | |||||
Other liabilities | 10,034 | 10,410 | |||||
Total
liabilities | 677,746 | 423,722 | |||||
Preferred stock | — | — | |||||
Common
stock | 304 | 300 | |||||
Additional paid in capital | 212,240 | 207,326 | |||||
Cumulative foreign currency translation adjustment | (2,048 | ) | (2,221 | ) | |||
Retained
earnings | 125,437 | 103,271 | |||||
Stockholders’ equity | 335,933 | 308,676 | |||||
Total
liabilities and stockholders’ equity | $ | 1,013,679 | $ | 732,398 |
Cash flows from operating activities: | |||||||
Net income | $ | 24,193 | $ | 20,402 | |||
Adjustments
to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 13,328 | 10,296 | |||||
Amortization of intangible
assets | 12,663 | 11,910 | |||||
Provision for allowance for doubtful accounts | 4,981 | 3,790 | |||||
Non-cash operating lease expense | 2,043 | 770 | |||||
Deferred
taxes | 2,063 | 2,554 | |||||
Amortization of deferred financing fees | 2,168 | 3,155 | |||||
Stock compensation | 4,399 | 4,094 | |||||
Change
in fair value of contingent earn-out liabilities | 5,879 | 1,448 | |||||
Loss on asset disposal | 101 | 169 | |||||
Changes in assets and liabilities, net of acquisitions: | |||||||
Accounts
receivable | (13,213 | ) | (19,466 | ) | |||
Inventories | (9,439 | ) | (6,330 | ) | |||
Prepaid expenses and other current assets | (1,813 | ) | 120 | ||||
Accounts
payable, accrued liabilities and accrued compensation | 3,775 | 13,677 | |||||
Other assets and liabilities | (6,121 | ) | (1,507 | ) | |||
Net cash provided by operating activities | 45,007 | 45,082 | |||||
Cash
flows from investing activities: | |||||||
Capital expenditures | (16,077 | ) | (19,817 | ) | |||
Cash paid for acquisitions, net of cash received | (28,077 | ) | (13,901 | ) | |||
Proceeds
from asset disposals | — | 30 | |||||
Net cash used in investing activities | (44,154 | ) | (33,688 | ) | |||
Cash
flows from financing activities: | |||||||
Payment of debt, finance lease and other financing obligations | (1,894 | ) | (49,360 | ) | |||
Proceeds from debt issuance | 150,000 | — | |||||
Payment
of deferred financing fees | (5,082 | ) | (1,502 | ) | |||
Proceeds from exercise of stock options | 1,541 | — | |||||
Surrender of shares to pay withholding taxes | (1,022 | ) | (764 | ) | |||
Cash
paid for contingent earn-out liability | (2,412 | ) | (3,000 | ) | |||
Borrowings under asset based loan facility | — | 47,100 | |||||
Payments under asset based loan facility | (44,184 | ) | (2,916 | ) | |||
Net
cash provided by (used in) financing activities | 96,947 | (10,442 | ) | ||||
Effect of foreign currency translation on cash and cash equivalents | 23 | (46 | ) | ||||
Net
increase in cash and cash equivalents | 97,823 | 906 | |||||
Cash and cash equivalents at beginning of period | 42,410 | 41,504 | |||||
Cash and cash equivalents at
end of period | $ | 140,233 | $ | 42,410 |
Thirteen Weeks Ended | Fifty-Two Weeks Ended | ||||||||||||||
Numerator: | |||||||||||||||
Net
Income | $ | 10,888 | $ | 8,882 | $ | 24,193 | $ | 20,402 | |||||||
Add
effect of dilutive securities: | |||||||||||||||
Interest on convertible notes, net of tax | 215 | — | 207 | 362 | |||||||||||
Net
Income available to common shareholders | $ | 11,103 | $ | 8,882 | $ | 24,400 | $ | 20,764 | |||||||
Denominator: | |||||||||||||||
Weighted
average basic common shares outstanding | 29,595,723 | 29,438,806 | 29,532,342 | 28,703,265 | |||||||||||
Dilutive effect of unvested common shares | 204,483 | 389,446 | 211,050 | 270,520 | |||||||||||
Dilutive
effect of convertible notes | 1,334,615 | — | 329,946 | 705,134 | |||||||||||
Weighted average diluted common shares outstanding | 31,134,821 | 29,828,252 | 30,073,338 | 29,678,919 | |||||||||||
Net
Income Per Share: | |||||||||||||||
Basic | $ | 0.37 | $ | 0.30 | $ | 0.82 | $ | 0.71 | |||||||
Diluted | $ | 0.36 | $ | 0.30 | $ | 0.81 | $ | 0.70 |
Thirteen Weeks Ended | Fifty-Two Weeks Ended | ||||||||||||||
Net Income | $ | 10,888 | $ | 8,882 | $ | 24,193 | $ | 20,402 | |||||||
Interest
expense | 4,351 | 5,709 | 18,264 | 20,745 | |||||||||||
Depreciation | 3,789 | 3,062 | 13,328 | 10,296 | |||||||||||
Amortization | 3,178 | 2,961 | 12,663 | 11,910 | |||||||||||
Provision
for income tax expense | 3,158 | 3,072 | 8,210 | 7,442 | |||||||||||
EBITDA (1) | 25,364 | 23,686 | 76,658 | 70,795 | |||||||||||
Adjustments: | |||||||||||||||
Stock
compensation (2) | 1,488 | 1,095 | 4,399 | 4,094 | |||||||||||
Duplicate rent (3) | 698 | — | 1,503 | 14 | |||||||||||
Integration
and deal costs/third party transaction costs (4) | 93 | 277 | 379 | 608 | |||||||||||
Change in fair value of earn-out obligations (5) | 548 | (578 | ) | 5,879 | 1,448 | ||||||||||
Loss
on asset disposal (6) | 37 | 139 | 101 | 169 | |||||||||||
Moving expenses (7) | — | 28 | 61 | 49 | |||||||||||
Adjusted
EBITDA (1) | $ | 28,228 | $ | 24,647 | $ | 88,980 | $ | 77,177 |
1. | We
are presenting EBITDA and Adjusted EBITDA, which are not measurements determined in accordance with the U.S. generally accepted accounting principles, or GAAP, because we believe these measures provide additional metrics to evaluate our operations and which we believe, when considered with both our GAAP results and the reconciliation to net income, provide a more complete understanding of our business than could be obtained absent this disclosure. We use EBITDA and Adjusted EBITDA, together with financial measures prepared in accordance with GAAP, such as revenue and cash flows from operations, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. The use of EBITDA and Adjusted EBITDA as performance measures permits a comparative assessment of our operating performance relative to our performance based upon GAAP results while isolating the effects of some items that vary from period to period
without any correlation to core operating performance or that vary widely among similar companies. |
2. | Represents non-cash stock compensation expense associated with awards of restricted shares of our common stock and stock options to our key employees and our independent directors. |
3. | Represents duplicate rent and occupancy costs for our Los Angeles, CA and Toronto, Canada facilities. |
4. | Represents
transaction related costs incurred to complete and integrate acquisitions, including due diligence, legal and integration. |
5. | Represents the non-cash change in fair value of contingent earn-out liabilities related to our acquisitions. |
6. | Represents the non-cash charge related to the disposal of certain equipment. |
7. | Represents
moving expenses for the consolidation and expansion of our Ridgefield, CT and Toronto, Canada facilities. |
Thirteen
Weeks Ended | Fifty-Two Weeks Ended | ||||||||||||||
Net Income | $ | 10,888 | $ | 8,882 | $ | 24,193 | $ | 20,402 | |||||||
Adjustments
to Reconcile Net Income to Adjusted Net Income (1): | |||||||||||||||
Duplicate rent (2) | 698 | — | 1,503 | 14 | |||||||||||
Integration
and deal costs/third party transaction costs (3) | 93 | 277 | 379 | 608 | |||||||||||
Moving expenses (4) | — | 28 | 61 | 49 | |||||||||||
Change
in fair value of earn-out obligations (5) | 548 | (578 | ) | 5,879 | 1,448 | ||||||||||
Loss on asset disposal (6) | 37 | 139 | 101 | 169 | |||||||||||
Write-off
of unamortized deferred financing fees (7) | — | 1,081 | — | 1,081 | |||||||||||
Tax effect of adjustments (8) | (205 | ) | (253 | ) | (2,007 | ) | (900 | ) | |||||||
Total
Adjustments | 1,171 | 694 | 5,916 | 2,469 | |||||||||||
Adjusted Net Income | $ | 12,059 | $ | 9,576 | $ | 30,109 | $ | 22,871 | |||||||
Diluted
Earnings per Share - Adjusted | $ | 0.39 | $ | 0.32 | $ | 1.01 | $ | 0.78 | |||||||
Diluted
Shares Outstanding - Adjusted | 31,225,875 | 29,828,252 | 30,073,338 | 29,678,919 |
1. | We
are presenting adjusted net income and adjusted earnings per share (EPS), which are not measurements determined in accordance with U.S. generally accepted accounting principles, or GAAP, because we believe these measures provide additional metrics to evaluate our operations and which we believe, when considered with both our GAAP results and the reconciliation to net income available to common stockholders, provide a more complete understanding of our business than could be obtained absent this disclosure. We use adjusted net income available to common stockholders and adjusted EPS, together with financial measures prepared in accordance with GAAP, such as revenue and cash flows from operations, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. The use of adjusted net income available to common stockholders and adjusted EPS as performance measures permits a comparative assessment of our
operating performance relative to our performance based upon our GAAP results while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. |
2. | Represents duplicate rent and occupancy costs for our Los Angeles, CA and Toronto, Canada facilities. |
3. | Represents transaction related costs incurred to complete and integrate acquisitions,
including due diligence, legal and integration. |
4. | Represents moving expenses for the consolidation and expansion of our Ridgefield, CT and Toronto, Canada facilities. |
5. | Represents the non-cash change in fair value of contingent earn-out liabilities related to our acquisitions. |
6. | Represents
the non-cash charge related to the disposal of certain equipment. |
7. | Represents the write-off of unamortized deferred financing fees as a result of the repricing of our term loan during the fourth quarter of 2018. |
8. | Represents the tax effect of items 2 through 7 above. |
Thirteen Weeks Ended | Fifty-Two
Weeks Ended | ||||||||||||||
Numerator: | |||||||||||||||
Adjusted
Net Income | $ | 12,059 | $ | 9,576 | $ | 30,109 | $ | 22,871 | |||||||
Add
effect of dilutive securities: | |||||||||||||||
Interest on convertible notes, net of tax | 250 | — | 207 | 362 | |||||||||||
Adjusted
Net Income available to common shareholders | $ | 12,309 | $ | 9,576 | $ | 30,316 | $ | 23,233 | |||||||
Denominator: | |||||||||||||||
Weighted
average basic common shares outstanding | 29,595,723 | 29,438,806 | 29,532,342 | 28,703,265 | |||||||||||
Dilutive effect of unvested common shares | 204,483 | 389,446 | 211,050 | 270,520 | |||||||||||
Dilutive
effect of convertible notes | 1,425,669 | — | 329,946 | 705,134 | |||||||||||
Weighted average diluted common shares outstanding | 31,225,875 | 29,828,252 | 30,073,338 | 29,678,919 | |||||||||||
Adjusted
Net Income per share: | |||||||||||||||
Diluted | $ | 0.39 | $ | 0.32 | $ | 1.01 | $ | 0.78 |
Low-End Guidance | High-End Guidance | ||||||
Net Income: | $ | 26,850 | $ | 29,800 | |||
Provision
for income tax expense | 10,450 | 11,500 | |||||
Depreciation & amortization | 35,500 | 35,500 | |||||
Interest expense | 20,000 | 20,000 | |||||
EBITDA
(1) | 92,800 | 96,800 | |||||
Adjustments: | |||||||
Stock
compensation (2) | 6,800 | 6,800 | |||||
Duplicate rent (3) | 2,000 | 2,000 | |||||
Change in fair value of earn-out obligations (4) | 300 | 300 | |||||
Moving
expenses (5) | 100 | 100 | |||||
Adjusted EBITDA (1) | $ | 102,000 | $ | 106,000 |
1. | We
are presenting estimated EBITDA and Adjusted EBITDA, which are not measurements determined in accordance with the U.S. generally accepted accounting principles, or GAAP, because we believe these measures provide additional metrics to evaluate our currently estimated results and which we believe, when considered with both our estimated GAAP results and the reconciliation to our estimated net income, provide a more complete understanding of our business than could be obtained absent this disclosure. We use EBITDA and Adjusted EBITDA, together with financial measures prepared in accordance with GAAP, such as revenue and cash flows from operations, to assess our historical and prospective operating performance and to enhance our understanding of our performance relative to our performance based upon GAAP results while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar
companies. |
2. | Represents non-cash stock compensation expense associated with awards of restricted shares of our common stock and stock options to our key employees and our independent directors. |
3. | Represents rent and occupancy costs expected to be incurred in connection with our facility consolidations while we are unable to use those facilities. |
4. | Represents
the non-cash change in fair value of contingent earn-out liabilities related to our acquisitions. |
5. | Represents moving expenses for the consolidation and expansion of our facilities. |
Low-End | High-End | ||||||
Guidance | Guidance | ||||||
Net
income per diluted share | $ | 0.86 | $ | 0.95 | |||
Duplicate rent (3) | 0.04 | 0.04 | |||||
Change
in fair value of earn-out obligations (4) | 0.01 | 0.01 | |||||
Adjusted net income per diluted share | $ | 0.91 | $ | 1.00 |
1. | We
are presenting estimated adjusted EPS, which is not a measurement determined in accordance with U.S. generally accepted accounting principles, or GAAP, because we believe this measure provides an additional metric to evaluate our currently estimated results and which we believe, when considered with both our estimated GAAP results and the reconciliation to estimated net income per diluted share, provides a more complete understanding of our expectations for our business than could be obtained absent this disclosure. We use adjusted EPS, together with financial measures prepared in accordance with GAAP, such as revenue and cash flows from operations, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. The use of adjusted EPS as a performance measure permits a comparative assessment of our expectations regarding our estimated operating performance relative to our estimated operating performance
based on our GAAP results while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. |
2. | Guidance is based upon an estimated effective tax rate of 28.0% and an estimated fully diluted share count of approximately 34 million shares. |
3. | Represents
rent and occupancy costs expected to be incurred in connection with our facility consolidations while we are unable to use those facilities. |
4. | Represents the non-cash change in fair value of contingent earn-out liabilities related to our acquisitions. |
This ‘8-K’ Filing | Date | Other Filings | ||
---|---|---|---|---|
2/19/20 | ||||
Filed on / For Period end: | 2/12/20 | SC 13G/A | ||
12/27/19 | 10-K | |||
3/1/19 | 10-K | |||
12/28/18 | 10-K | |||
List all Filings |