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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 5/11/22 Performance Food Group Co. 10-Q 4/02/22 73:11M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 1.04M
2: EX-10.1 Material Contract HTML 43K
3: EX-31.1 Certification -- §302 - SOA'02 HTML 27K
4: EX-31.2 Certification -- §302 - SOA'02 HTML 27K
5: EX-32.1 Certification -- §906 - SOA'02 HTML 23K
6: EX-32.2 Certification -- §906 - SOA'02 HTML 23K
12: R1 Document and Entity Information HTML 74K
13: R2 Consolidated Balance Sheets HTML 131K
14: R3 Consolidated Balance Sheets (Parenthetical) HTML 34K
15: R4 Consolidated Statements of Operations HTML 93K
16: R5 Consolidated Statements of Comprehensive Income HTML 50K
17: R6 Consolidated Statements of Shareholders' Equity HTML 91K
18: R7 Consolidated Statements of Cash Flows HTML 135K
19: R8 Reconciliation of Cash and Restricted Cash HTML 30K
20: R9 Summary of Business Activities HTML 26K
21: R10 Summary of Significant Accounting Policies and HTML 29K
Estimates
22: R11 Recently Issued Accounting Pronouncements HTML 41K
23: R12 Revenue Recognition HTML 30K
24: R13 Business Combinations HTML 125K
25: R14 Debt HTML 117K
26: R15 Leases HTML 246K
27: R16 Fair Value of Financial Instruments HTML 28K
28: R17 Income Taxes HTML 38K
29: R18 Commitments and Contingencies HTML 43K
30: R19 Related-Party Transactions HTML 29K
31: R20 Earnings Per Common Share HTML 87K
32: R21 Stock-based Compensation HTML 29K
33: R22 Segment Information HTML 489K
34: R23 Summary of Significant Accounting Policies and HTML 49K
Estimates (Policies)
35: R24 Business Combinations (Tables) HTML 111K
36: R25 Debt (Tables) HTML 88K
37: R26 Leases (Tables) HTML 239K
38: R27 Earnings Per Common Share (Tables) HTML 83K
39: R28 Segment Information (Tables) HTML 485K
40: R29 Recently Issued Accounting Pronouncements - HTML 49K
Additional Information (Detail)
41: R30 Revenue Recognition - Additional Information HTML 23K
(Details)
42: R31 Business Combinations - Additional Information HTML 90K
(Detail)
43: R32 Business Combinations - Summary of Purchase Price HTML 47K
for Acquisition (Detail)
44: R33 Business Combinations - Summary of Preliminary HTML 58K
Purchase Price Allocation of Major Class of Assets
Acquired and Liabilities Assumed (Detail)
45: R34 Business Combinations - Summary of Unaudited HTML 26K
Pro-Forma Consolidated Financial Information
(Detail)
46: R35 Debt - Schedule of Debt (Detail) HTML 46K
47: R36 Debt - Schedule of Debt (Parenthetical) (Detail) HTML 35K
48: R37 Debt - Additional Information (Detail) HTML 90K
49: R38 Debt - Summary of Outstanding Borrowings, HTML 31K
Availability, and Average Interest Rate under ABL
Facility (Detail)
50: R39 Debt - Summary of Outstanding Borrowings, HTML 24K
Availability, and Average Interest Rate under ABL
Facility (Parenthetical) (Detail)
51: R40 Leases - Additional Information (Detail) HTML 53K
52: R41 Leases - Summary of Right-of-Use Assets and Lease HTML 53K
Liabilities in Consolidated Balance Sheet (Detail)
53: R42 Leases - Summary of Location of Lease Costs in HTML 35K
Consolidated Statement of Operations (Detail)
54: R43 Leases - Summary of Supplemental Cash Flow HTML 35K
Information related to Leases (Detail)
55: R44 Leases - Summary of Future Minimum Lease Payments HTML 60K
Under Non-Cancelable Leases (Detail)
56: R45 Fair Value of Financial Instruments - Additional HTML 31K
Information (Detail)
57: R46 Income Taxes - Additional Information (Detail) HTML 36K
58: R47 Commitments and Contingencies - Additional HTML 22K
Information (Detail)
59: R48 Related-Party Transactions - Additional HTML 28K
Information (Detail)
60: R49 Earnings Per Common Share - Additional Information HTML 23K
(Detail)
61: R50 Earnings Per Common Share - Schedule of HTML 56K
Reconciliation of Numerators and Denominators for
Basic and Diluted Earnings Per Common Share
Computations (Detail)
62: R51 Stock-based Compensation - Additional Information HTML 44K
(Detail)
63: R52 Segment Information - Additional Information HTML 36K
(Detail)
64: R53 Segment Information - Schedule of Segment HTML 59K
Reporting Information, by Segment (Detail)
65: R54 Segment Information - Schedule of EBDITA and HTML 46K
Reconciliation to Consolidated Income Before Taxes
(Detail)
66: R55 Segment Information - Summary Assets by Reportable HTML 38K
Segment, Excluding Intercompany Receivables
(Detail)
67: R56 Segment Information - Changes in Carrying Amount HTML 36K
of Goodwill (Detail)
68: R57 Segment Information - Summary Sales Mix for HTML 54K
Principal Product and Service Categories (Detail)
71: XML IDEA XML File -- Filing Summary XML 129K
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| 10-Q |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form i 10-Q
(Mark One)
i ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended i April 2, 2022
i ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to ___________
Commission File Number i 001-37578
i Performance Food Group Company
(Exact name of registrant as specified in its charter)
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i Delaware |
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i 43-1983182 |
(State or other jurisdiction of incorporation or organization) |
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(IRS employer identification number) |
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i 12500 West Creek Parkway i Richmond, i Virginia i 23238 |
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( i 804) i 484-7700 |
(Address of principal executive offices) |
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(Registrant’s Telephone Number, Including Area Code) |
Securities registered pursuant to Section 12(b) of the Act: |
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
i Common Stock, $0.01 par value |
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i PFGC |
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i New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. i Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). i Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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i Large Accelerated Filer |
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☒ |
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Accelerated Filer |
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☐ |
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Non-accelerated Filer |
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☐ |
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Smaller Reporting Company |
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i ☐ |
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Emerging Growth Company |
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i ☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No i ☒
i 155,001,940 shares of common stock were outstanding as of May 4, 2022.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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3
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
In addition to historical information, this Quarterly Report on Form 10-Q (this “Form 10-Q”) may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts included in this Form 10-Q, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, our results of operations, financial position, our business outlook, business trends and other information are forward-looking statements. Words such as “estimates,” “expects,” “contemplates,” “will,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” “may,” “should” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates, projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, estimates and projections will result or be achieved, and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.
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 the forward-looking statements contained in this Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended July 3, 2021 (the “Form 10-K”), as such risk factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the “SEC”), including under Part II, Item 1A, Risk Factors of this Form 10-Q, and are accessible on the SEC’s website at www.sec.gov, and also include the following:
4
We caution you that the risks, uncertainties and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. We cannot assure you (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct, or (iv) our strategy, which is based in part on this analysis, will be successful. All forward-looking statements in this report apply only as of the date of this report or as of the date they were made and, except as required by applicable law, we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.
Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” “the Company,” or “PFG” as used in this Form 10-Q refer to Performance Food Group Company and its consolidated subsidiaries.
5
Part I – FINANCIAL INFORMATION
Item 1. Financial Statements
PERFORMANCE FOOD GROUP COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, except per share data) |
|
As of |
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As of |
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||
ASSETS |
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Current assets: |
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Cash |
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$ |
i 13.7 |
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$ |
i 11.1 |
|
Accounts receivable, less allowances of $ i 56.5 and $ i 42.6 |
|
|
i 2,185.7 |
|
|
|
i 1,580.0 |
|
Inventories, net |
|
|
i 3,085.3 |
|
|
|
i 1,839.4 |
|
Income taxes receivable |
|
|
i 57.6 |
|
|
|
i 49.6 |
|
Prepaid expenses and other current assets |
|
|
i 226.1 |
|
|
|
i 100.3 |
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Total current assets |
|
|
i 5,568.4 |
|
|
|
i 3,580.4 |
|
Goodwill |
|
|
i 2,291.5 |
|
|
|
i 1,354.7 |
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Other intangible assets, net |
|
|
i 1,243.8 |
|
|
|
i 796.4 |
|
Property, plant and equipment, net |
|
|
i 2,104.7 |
|
|
|
i 1,589.6 |
|
Operating lease right-of-use assets |
|
|
i 642.8 |
|
|
|
i 438.7 |
|
Restricted cash |
|
|
i 7.1 |
|
|
|
i 11.1 |
|
Other assets |
|
|
i 121.3 |
|
|
|
i 74.8 |
|
Total assets |
|
$ |
i 11,979.6 |
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$ |
i 7,845.7 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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|
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||
Trade accounts payable and outstanding checks in excess of deposits |
|
|
i 2,556.3 |
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|
i 1,776.5 |
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Accrued expenses and other current liabilities |
|
|
i 758.6 |
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|
|
i 625.0 |
|
Finance lease obligations—current installments |
|
|
i 76.2 |
|
|
|
i 48.7 |
|
Operating lease obligations—current installments |
|
|
i 112.8 |
|
|
|
i 77.0 |
|
Total current liabilities |
|
|
i 3,503.9 |
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i 2,527.2 |
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Long-term debt |
|
|
i 3,721.1 |
|
|
|
i 2,240.5 |
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Deferred income tax liability, net |
|
|
i 423.8 |
|
|
|
i 140.4 |
|
Finance lease obligations, excluding current installments |
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i 362.4 |
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i 255.0 |
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Operating lease obligations, excluding current installments |
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i 546.8 |
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i 378.0 |
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Other long-term liabilities |
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i 217.1 |
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i 198.5 |
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Total liabilities |
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i 8,775.1 |
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i 5,739.6 |
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Commitments and contingencies (Note 10) |
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Shareholders’ equity: |
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Common Stock: $ i i 0.01 / par
value per share, i i 1.0 / billion
shares authorized, i i 153.3 / million
shares issued and outstanding as of April 2, 2022; |
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i 1.5 |
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i 1.3 |
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Additional paid-in capital |
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i 2,797.1 |
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i 1,752.8 |
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Accumulated other comprehensive income (loss), net of tax (expense) benefit of $( i 4.1) and $ i 1.9 |
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i 12.1 |
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( i 5.3 |
) |
Retained earnings |
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i 393.8 |
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i 357.3 |
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Total shareholders’ equity |
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i 3,204.5 |
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i 2,106.1 |
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Total liabilities and shareholders’ equity |
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$ |
i 11,979.6 |
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$ |
i 7,845.7 |
|
See accompanying notes, which are an integral part of these unaudited consolidated financial statements.
6
PERFORMANCE FOOD GROUP COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per share data) |
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Three Months Ended April 2, 2022 |
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Three Months Ended March 27, 2021 |
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Nine Months Ended April 2, 2022 |
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Nine Months Ended March 27, 2021 |
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Net sales |
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$ |
i 13,079.0 |
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$ |
i 7,202.5 |
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$ |
i 36,304.1 |
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$ |
i 21,094.5 |
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Cost of goods sold |
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i 11,733.4 |
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i 6,369.8 |
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i 32,537.4 |
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i 18,635.2 |
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Gross profit |
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i 1,345.6 |
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i 832.7 |
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i 3,766.7 |
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i 2,459.3 |
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Operating expenses |
|
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i 1,277.0 |
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i 809.3 |
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i 3,592.1 |
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|
|
i 2,339.2 |
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Operating profit |
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|
i 68.6 |
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|
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i 23.4 |
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|
|
i 174.6 |
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i 120.1 |
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Other expense, net: |
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Interest expense |
|
|
i 45.9 |
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|
i 37.1 |
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|
|
i 135.1 |
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|
i 114.0 |
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Other, net |
|
|
( i 11.3 |
) |
|
|
( i 1.6 |
) |
|
|
( i 11.4 |
) |
|
|
( i 4.7 |
) |
Other expense, net |
|
|
i 34.6 |
|
|
|
i 35.5 |
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|
|
i 123.7 |
|
|
|
i 109.3 |
|
Income (loss) before taxes |
|
|
i 34.0 |
|
|
|
( i 12.1 |
) |
|
|
i 50.9 |
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|
|
i 10.8 |
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Income tax expense (benefit) |
|
|
i 10.6 |
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|
|
( i 4.5 |
) |
|
|
i 14.4 |
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|
i 1.5 |
|
Net income (loss) |
|
$ |
i 23.4 |
|
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$ |
( i 7.6 |
) |
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$ |
i 36.5 |
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$ |
i 9.3 |
|
Weighted-average common shares outstanding: |
|
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||||
Basic |
|
|
i 153.3 |
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|
i 132.3 |
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i 148.6 |
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|
i 132.0 |
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Diluted |
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|
i 154.9 |
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i 132.3 |
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i 150.2 |
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|
i 133.2 |
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Earnings (loss) per common share: |
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||||
Basic |
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$ |
i 0.15 |
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$ |
( i 0.06 |
) |
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$ |
i 0.25 |
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$ |
i 0.07 |
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Diluted |
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$ |
i 0.15 |
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$ |
( i 0.06 |
) |
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$ |
i 0.24 |
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$ |
i 0.07 |
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See accompanying notes, which are an integral part of these unaudited consolidated financial statements.
7
PERFORMANCE FOOD GROUP COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
($ in millions) |
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Three Months Ended |
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Three Months Ended |
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Nine Months Ended |
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Nine Months Ended |
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||||
Net income (loss) |
|
$ |
i 23.4 |
|
|
$ |
( i 7.6 |
) |
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$ |
i 36.5 |
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$ |
i 9.3 |
|
Other comprehensive income, net of tax: |
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||||
Interest rate swaps: |
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||||
Change in fair value, net of tax |
|
|
i 10.5 |
|
|
|
i 2.2 |
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|
|
i 13.6 |
|
|
|
i 2.1 |
|
Reclassification adjustment, net of tax |
|
|
i 0.7 |
|
|
|
i 0.6 |
|
|
|
i 3.4 |
|
|
|
i 2.0 |
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Foreign currency translation adjustment, net of tax |
|
|
i 0.4 |
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|
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— |
|
|
|
i 0.4 |
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|
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— |
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Other comprehensive income |
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|
i 11.6 |
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|
|
i 2.8 |
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|
|
i 17.4 |
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|
|
i 4.1 |
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Total comprehensive income (loss) |
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$ |
i 35.0 |
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|
$ |
( i 4.8 |
) |
|
$ |
i 53.9 |
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$ |
i 13.4 |
|
See accompanying notes, which are an integral part of these unaudited consolidated financial statements.
8
PERFORMANCE FOOD GROUP COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
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Additional |
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Accumulated |
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Total |
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Common Stock |
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Paid-in |
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Comprehensive |
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Retained |
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Shareholders’ |
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(In millions) |
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Shares |
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Amount |
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Capital |
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(Loss) Income |
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Earnings |
|
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Equity |
|
||||||
Balance as of December 26, 2020 |
|
|
i 132.0 |
|
|
$ |
i 1.3 |
|
|
$ |
i 1,721.1 |
|
|
$ |
( i 9.0 |
) |
|
$ |
i 333.5 |
|
|
$ |
i 2,046.9 |
|
Net loss |
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|
— |
|
|
|
— |
|
|
|
— |
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|
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— |
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|
( i 7.6 |
) |
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|
( i 7.6 |
) |
Interest rate swaps |
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— |
|
|
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— |
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|
|
— |
|
|
|
i 2.8 |
|
|
|
— |
|
|
|
i 2.8 |
|
Issuance of common stock under stock-based compensation plans |
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|
i 0.2 |
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|
— |
|
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|
i 1.0 |
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— |
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— |
|
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|
i 1.0 |
|
Issuance of common stock under employee stock purchase plan |
|
|
i 0.1 |
|
|
|
— |
|
|
|
i 8.5 |
|
|
|
— |
|
|
|
— |
|
|
|
i 8.5 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
i 6.1 |
|
|
|
— |
|
|
|
— |
|
|
|
i 6.1 |
|
Balance as of March 27, 2021 |
|
|
i 132.3 |
|
|
$ |
i 1.3 |
|
|
$ |
i 1,736.7 |
|
|
$ |
( i 6.2 |
) |
|
$ |
i 325.9 |
|
|
$ |
i 2,057.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance as of January 1, 2022 |
|
|
i 153.3 |
|
|
$ |
i 1.5 |
|
|
$ |
i 2,788.5 |
|
|
$ |
i 0.5 |
|
|
$ |
i 370.4 |
|
|
$ |
i 3,160.9 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 23.4 |
|
|
|
i 23.4 |
|
Interest rate swaps |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 11.2 |
|
|
|
— |
|
|
|
i 11.2 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 0.4 |
|
|
|
— |
|
|
|
i 0.4 |
|
Issuance of common stock under stock-based compensation plans |
|
|
— |
|
|
|
— |
|
|
|
( i 1.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
( i 1.2 |
) |
Issuance of common stock under employee stock purchase plan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
i 9.8 |
|
|
|
— |
|
|
|
— |
|
|
|
i 9.8 |
|
Balance as of April 2, 2022 |
|
|
i 153.3 |
|
|
$ |
i 1.5 |
|
|
$ |
i 2,797.1 |
|
|
$ |
i 12.1 |
|
|
$ |
i 393.8 |
|
|
$ |
i 3,204.5 |
|
|
|
|
|
|
Additional |
|
|
Accumulated |
|
|
|
|
|
Total |
|
|||||||||
|
|
Common Stock |
|
|
Paid-in |
|
|
Comprehensive |
|
|
Retained |
|
|
Shareholders’ |
|
|||||||||
(In millions) |
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
(Loss) Income |
|
|
Earnings |
|
|
Equity |
|
||||||
Balance as of June 27, 2020 |
|
|
i 131.3 |
|
|
$ |
i 1.3 |
|
|
$ |
i 1,703.0 |
|
|
$ |
( i 10.3 |
) |
|
$ |
i 316.6 |
|
|
$ |
i 2,010.6 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 9.3 |
|
|
|
i 9.3 |
|
Interest rate swaps |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 4.1 |
|
|
|
— |
|
|
|
i 4.1 |
|
Issuance of common stock under stock-based compensation plans |
|
|
i 0.6 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Issuance of common stock under employee stock purchase plan |
|
|
i 0.4 |
|
|
|
— |
|
|
|
i 16.3 |
|
|
|
— |
|
|
|
— |
|
|
|
i 16.3 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
i 17.4 |
|
|
|
— |
|
|
|
— |
|
|
|
i 17.4 |
|
Balance as of March 27, 2021 |
|
|
i 132.3 |
|
|
$ |
i 1.3 |
|
|
$ |
i 1,736.7 |
|
|
$ |
( i 6.2 |
) |
|
$ |
i 325.9 |
|
|
$ |
i 2,057.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance as of July 3, 2021 |
|
|
i 132.5 |
|
|
|
i 1.3 |
|
|
|
i 1,752.8 |
|
|
|
( i 5.3 |
) |
|
|
i 357.3 |
|
|
|
i 2,106.1 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 36.5 |
|
|
|
i 36.5 |
|
Interest rate swaps |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 17.0 |
|
|
|
— |
|
|
|
i 17.0 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 0.4 |
|
|
|
— |
|
|
|
i 0.4 |
|
Issuance of common stock under stock-based compensation plans |
|
|
i 0.6 |
|
|
|
— |
|
|
|
( i 8.0 |
) |
|
|
— |
|
|
|
— |
|
|
|
( i 8.0 |
) |
Issuance of common stock under employee stock purchase plan |
|
|
i 0.3 |
|
|
|
— |
|
|
|
i 12.3 |
|
|
|
— |
|
|
|
— |
|
|
|
i 12.3 |
|
Conversion of Core-Mark shares of common stock |
|
|
i 19.9 |
|
|
|
i 0.2 |
|
|
|
i 998.6 |
|
|
|
— |
|
|
|
— |
|
|
|
i 998.8 |
|
Conversion of Core-Mark stock-based compensation (1) |
|
|
— |
|
|
|
— |
|
|
|
i 9.2 |
|
|
|
— |
|
|
|
— |
|
|
|
i 9.2 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
i 32.2 |
|
|
|
— |
|
|
|
— |
|
|
|
i 32.2 |
|
Balance as of April 2, 2022 |
|
|
i 153.3 |
|
|
$ |
i 1.5 |
|
|
$ |
i 2,797.1 |
|
|
$ |
i 12.1 |
|
|
$ |
i 393.8 |
|
|
$ |
i 3,204.5 |
|
(1) Represents the portion of replacement stock-based compensation awards that relates to pre-combination vesting.
See accompanying notes, which are an integral part of these unaudited consolidated financial statements.
9
PERFORMANCE FOOD GROUP COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
($ in millions) |
|
Nine Months Ended April 2, 2022 |
|
|
Nine Months Ended March 27, 2021 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
i 36.5 |
|
|
$ |
i 9.3 |
|
Adjustments to reconcile net income to net cash provided |
|
|
|
|
|
|
||
Depreciation |
|
|
i 203.2 |
|
|
|
i 158.4 |
|
Amortization of intangible assets |
|
|
i 136.1 |
|
|
|
i 88.7 |
|
Amortization of deferred financing costs |
|
|
i 7.1 |
|
|
|
i 10.5 |
|
Provision for losses on accounts receivables |
|
|
i 8.2 |
|
|
|
( i 7.9 |
) |
Change in LIFO reserve |
|
|
i 55.3 |
|
|
|
i 9.3 |
|
Stock compensation expense |
|
|
i 34.9 |
|
|
|
i 19.3 |
|
Deferred income tax (benefit) expense |
|
|
( i 3.8 |
) |
|
|
i 3.6 |
|
Loss on extinguishment of debt |
|
|
i 3.2 |
|
|
|
i — |
|
Other non-cash activities |
|
|
i 14.4 |
|
|
|
i 2.6 |
|
Changes in operating assets and liabilities, net |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( i 68.4 |
) |
|
|
( i 123.5 |
) |
Inventories |
|
|
( i 171.5 |
) |
|
|
i 1.8 |
|
Income taxes receivable |
|
|
i 18.3 |
|
|
|
i 114.8 |
|
Prepaid expenses and other assets |
|
|
i 1.5 |
|
|
|
( i 31.9 |
) |
Trade accounts payable and outstanding checks in excess of deposits |
|
|
i 177.4 |
|
|
|
( i 95.6 |
) |
Accrued expenses and other liabilities |
|
|
( i 61.8 |
) |
|
|
i 13.7 |
|
Net cash provided by operating activities |
|
|
i 390.6 |
|
|
|
i 173.1 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property, plant and equipment |
|
|
( i 140.8 |
) |
|
|
( i 118.9 |
) |
Net cash paid for acquisitions |
|
|
( i 1,651.1 |
) |
|
|
( i 18.1 |
) |
Proceeds from sale of property, plant and equipment and other |
|
|
i 3.7 |
|
|
|
i 6.6 |
|
Net cash used in investing activities |
|
|
( i 1,788.2 |
) |
|
|
( i 130.4 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Net borrowings (payments) under ABL Facility |
|
|
i 835.7 |
|
|
|
( i 103.8 |
) |
Payment of Additional Junior Term Loan |
|
|
i — |
|
|
|
( i 110.0 |
) |
Borrowing of Notes due 2029 |
|
|
i 1,000.0 |
|
|
|
i — |
|
Repayment of Notes due 2024 |
|
|
( i 350.0 |
) |
|
|
i — |
|
Cash paid for debt issuance, extinguishment and modifications |
|
|
( i 24.9 |
) |
|
|
( i 0.1 |
) |
Payments under finance lease obligations |
|
|
( i 67.4 |
) |
|
|
( i 27.3 |
) |
Payments on financed property, plant and equipment |
|
|
( i 0.1 |
) |
|
|
( i 0.6 |
) |
Cash paid for acquisitions |
|
|
( i 1.4 |
) |
|
|
( i 136.4 |
) |
Proceeds from employee stock purchase plan |
|
|
i 12.3 |
|
|
|
i 16.3 |
|
Proceeds from exercise of stock options |
|
|
i 2.7 |
|
|
|
i 4.2 |
|
Cash paid for shares withheld to cover taxes |
|
|
( i 10.7 |
) |
|
|
( i 4.2 |
) |
Net cash provided by (used in) financing activities |
|
|
i 1,396.2 |
|
|
|
( i 361.9 |
) |
Net decrease in cash and restricted cash |
|
|
( i 1.4 |
) |
|
|
( i 319.2 |
) |
Cash and restricted cash, beginning of period |
|
|
i 22.2 |
|
|
|
i 431.8 |
|
Cash and restricted cash, end of period |
|
$ |
i 20.8 |
|
|
$ |
i 112.6 |
|
The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:
(In millions) |
|
As of April 2, 2022 |
|
|
As of July 3, 2021 |
|
||
Cash |
|
$ |
i 13.7 |
|
|
$ |
i 11.1 |
|
Restricted cash(1) |
|
|
i 7.1 |
|
|
|
i 11.1 |
|
Total cash and restricted cash |
|
$ |
i 20.8 |
|
|
$ |
i 22.2 |
|
10
Supplemental disclosures of non-cash transactions are as follows:
(In millions) |
|
Nine Months Ended April 2, 2022 |
|
|
Nine Months Ended March 27, 2021 |
|
||
Debt assumed through finance lease obligations |
|
$ |
i 96.7 |
|
|
$ |
i 102.9 |
|
Purchases of property, plant and equipment, financed |
|
|
i 0.5 |
|
|
|
i 0.3 |
|
Non-cash issuance of PFG stock in exchange for Core-Mark stock |
|
|
i 1,008.0 |
|
|
|
i — |
|
Supplemental disclosures of cash flow information are as follows:
(In millions) |
|
Nine Months Ended April 2, 2022 |
|
|
Nine Months Ended March 27, 2021 |
|
||
Cash paid (received) during the year for: |
|
|
|
|
|
|
||
Interest |
|
$ |
i 101.8 |
|
|
$ |
i 81.2 |
|
Income tax payments (refunds), net |
|
|
i 3.0 |
|
|
|
( i 117.8 |
) |
See accompanying notes, which are an integral part of these unaudited consolidated financial statements.
11
PERFORMANCE FOOD GROUP COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Business Overview
Performance Food Group Company, through its subsidiaries, markets and distributes primarily national and company-branded food and food-related products to customer locations across the United States and Canada. The Company serves both of the major customer types in the restaurant industry: (i) independent customers, and (ii) multi-unit, or “Chain” customers, which include some of the most recognizable family and casual dining restaurant chains, as well as schools, business and industry locations, healthcare facilities, and retail establishments. The Company also specializes in distributing candy, snacks, beverages, cigarettes, other tobacco products, health and beauty care products and other items within the United States and Canada to vending distributors, big box retailers, theaters, convenience stores, drug stores, grocery stores, travel providers, and hospitality providers.
On September 1, 2021, Performance Food Group Company completed the acquisition of Core-Mark. As a result, the Company expanded its convenience business, which now includes operations in Canada. Refer to Note 5. Business Combinations for additional details regarding the acquisition of Core-Mark.
Basis of Presentation
The consolidated financial statements have been prepared by the Company, without audit, with the exception of the July 3, 2021 consolidated balance sheet, which was derived from the audited consolidated financial statements included in the Form 10-K. The financial statements include consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of shareholders’ equity, and consolidated statements of cash flows. Certain prior period amounts have been reclassified to conform to current period presentation. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income, shareholders’ equity, and cash flows for all periods presented have been made.
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates used by management are related to the accounting for the allowance for doubtful accounts, reserve for inventories, impairment testing of goodwill and other intangible assets, acquisition accounting, reserves for claims and recoveries under insurance programs, vendor rebates and other promotional incentives, bonus accruals, depreciation, amortization, determination of useful lives of tangible and intangible assets, leases, and income taxes. Actual results could differ from these estimates.
The results of operations are not necessarily indicative of the results to be expected for the full fiscal year. Therefore, these financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K. Certain footnote disclosures included in annual financial statements prepared in accordance with GAAP have been condensed or omitted herein pursuant to applicable rules and regulations for interim financial statements.
Foreign Currency Translation
As a result of the Core-Mark acquisition on September 1, 2021, PFG now has operations in Canada. The assets and liabilities of the Company’s Canadian operations, whose functional currency is the Canadian dollar, are translated to U.S. dollars at exchange rates in effect at period-end. Translation gains and losses are recorded in Accumulated Other Comprehensive Income (“AOCI”) as a component of stockholders’ equity. Revenue and expenses from Canadian operations are translated using the monthly average exchange rates in effect during the period in which the transactions occur. The Company also recognizes gains or losses on foreign currency exchange transactions between its Canadian and U.S. operations, net of applicable income taxes, in the consolidated statements of operations. The Company currently does not hedge Canadian foreign currency cash flows.
12
Recently Adopted Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update simplifies the accounting for income taxes by removing certain exceptions for intra-period tax allocations, the recognition of deferred tax liabilities after a foreign subsidiary transitions to or from equity method accounting, and the methodology of calculating income taxes in an interim period with year-to-date losses. Additionally, the guidance provides additional clarification on other areas, including step-up of the tax basis of goodwill recorded as part of an acquisition and the treatment of franchise taxes that are partially based on income. This pronouncement is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. Companies are required to apply the standard on a prospective basis, except for certain sections of the guidance which shall be applied on a retrospective or modified retrospective basis. The Company i adopted this new ASU in the first quarter of fiscal 2022 and concluded that it does i not have a material impact on the Company's consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The update improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payments terms and their effect on subsequent revenue recognized by the acquirer. The guidance requires that an acquiring entity in a business combination recognize and measure contract assets and contract liabilities acquired in accordance with Topic 606 as if it had originated the contract. This pronouncement is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. The amendments in this update should be applied prospectively to business combinations occurring on or after the effective date. The Company is in the process of assessing the impact of this ASU on its future consolidated financial statements, but does not expect it to have a material impact.
In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. The update increases the transparency in financial reporting of government assistance by requiring the disclosure of the types of transactions, an entity’s accounting for the transactions and the effect of those transactions on an entity’s financial statements. This pronouncement is effective for annual periods beginning after December 15, 2021, with early adoption permitted. The amendments in this update should be applied either prospectively to all applicable transactions at the date of initial application and as new transactions occur or retrospectively to all applicable transactions. The Company is in the process of assessing the impact of this ASU on its future consolidated financial statements, but does not expect it to have a material impact.
/
The Company markets and distributes primarily national and Company-branded food and food-related products to customer locations across the United States and Canada. The Foodservice segment primarily services restaurants and supplies a “broad line” of products to its customers, including the Company’s Performance Brands and custom-cut meats and seafood, as well as products that are specific to each customer’s menu requirements. Vistar specializes in distributing candy, snacks, beverages, and other items nationally to vending, office coffee service, theater, retail, hospitality, and other channels. The Convenience segment distributes candy, snacks, beverages, cigarettes, other tobacco products, food and food-service products, and other items to convenience stores across the United States and Canada. The Company disaggregates revenue by customer type and product offerings and determined that disaggregating revenue at the segment level achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 14. Segment Information for external revenue by reportable segment.
The Company has customer contracts in which incentives are paid upfront to certain customers. These payments have become industry practice and are not related to financing the customer’s business, nor are they associated with any distinct good or service to be received from the customer. These incentive payments are capitalized and amortized over the life of the contract or the expected life of the customer relationship on a straight-line basis. The Company’s contract asset for these incentives totaled $ i 24.5 million and $ i 19.9 million as of April 2, 2022 and July 3, 2021, respectively.
During the first nine months of fiscal 2022, the Company made i two acquisitions in cash and stock transactions totaling $ i 2.7 billion and included below is information related to the Company's material acquisition of Core-Mark.
13
Core-Mark Acquisition
On September 1, 2021, the Company acquired Core-Mark in a transaction valued at $ i 2.4 billion, net of cash received. Under the terms of the transaction, Core-Mark shareholders received $ i 23.875 per share in cash and i 0.44 shares of the Company’s stock for each Core-Mark share outstanding as of August 31, 2021. i The following table summarizes the purchase price for the acquisition:
(In millions, except shares, cash per share, exchange ratio, and closing price) |
|
|
|
|
Core-Mark shares outstanding at August 31, 2021 |
|
|
i 45,201,975 |
|
Cash consideration (per Core-Mark share) |
|
$ |
i 23.875 |
|
Cash portion of purchase price |
|
$ |
i 1,079.2 |
|
Core-Mark shares outstanding at August 31, 2021 |
|
|
i 45,201,975 |
|
Exchange ratio (per Core-Mark share) |
|
|
i 0.44 |
|
Total PFGC common shares issued |
|
|
i 19,888,869 |
|
Closing price of PFGC common stock on August 31, 2021 |
|
$ |
i 50.22 |
|
Equity issued |
|
$ |
i 998.8 |
|
Equity compensation (1) |
|
$ |
i 9.2 |
|
Total equity portion of purchase price |
|
$ |
i 1,008.0 |
|
Debt assumed, net of cash |
|
$ |
i 306.9 |
|
Total purchase price |
|
$ |
i 2,394.1 |
|
The $ i 1.1 billion cash portion of the acquisition was financed using borrowings from the ABL Facility (as defined in Note 6. Debt). The Core-Mark acquisition strengthens the Company’s business diversification and expands its presence in the convenience store channel. The Core-Mark acquisition is reported in the Convenience segment.
Assets acquired and liabilities assumed are recognized at their respective fair values as of the acquisition date of September 1, 2021. i The following table summarizes the preliminary purchase price allocation for each major class of assets acquired and liabilities assumed for the Core-Mark acquisition:
(In millions) |
|
Fiscal 2022 |
|
|
Net working capital |
|
$ |
i 979.9 |
|
Goodwill |
|
|
i 867.3 |
|
Intangible assets with definite lives: |
|
|
|
|
Customer relationships |
|
|
i 360.0 |
|
Trade names |
|
|
i 140.0 |
|
Technology |
|
|
i 7.0 |
|
Property, plant and equipment |
|
|
i 391.7 |
|
Operating lease right-of-use assets |
|
|
i 234.4 |
|
Other assets |
|
|
i 26.1 |
|
Deferred tax liabilities |
|
|
( i 239.5 |
) |
Finance lease obligations |
|
|
( i 105.6 |
) |
Operating lease obligations |
|
|
( i 220.7 |
) |
Other liabilities |
|
|
( i 46.5 |
) |
Total purchase price |
|
$ |
i 2,394.1 |
|
Intangible assets consist primarily of customer relationships, trade names, and technology with useful lives of i 11 years, i 5 years, and i 5 years, respectively, and a total weighted-average useful life of i 9.3 years. The excess of the estimated fair value of assets acquired and the liabilities assumed over consideration paid was recorded as $ i 867.3 million of goodwill on the acquisition date. The goodwill reflects the value to the Company associated with the expansion of geographic reach and scale of our distribution footprint and enhancements to the Company’s customer base.
The net sales and net loss related to Core-Mark recorded in the Company’s Consolidated Statements of Operations for the three months ended April 2, 2022 are $ i 4.1 billion and $ i 5.1 million, respectively. The net sales and net loss related to Core-Mark recorded in the Company’s Consolidated Statements of Operations since the acquisition date of September 1, 2021 are $ i 9.9 billion and $ i 9.5 million, respectively. The net loss related to Core-Mark for the third quarter of fiscal 2022 and since the acquisition date was driven by purchase accounting and last-in-first-out (“LIFO”) inventory reserve adjustments.
The following table summarizes the unaudited pro-forma consolidated financial information of the Company as if the acquisition had occurred on June 28, 2020.
14
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(in millions) |
|
|
|
|
|
|
|
|
||||||||
Net sales |
|
$ |
i 13,079.0 |
|
|
$ |
i 11,134.7 |
|
|
$ |
i 39,382.4 |
|
|
$ |
i 33,781.4 |
|
Net income (loss) |
|
|
i 25.0 |
|
|
|
( i 16.7 |
) |
|
|
i 72.3 |
|
|
|
( i 48.7 |
) |
These pro-forma results include nonrecurring pro-forma adjustments related to acquisition costs incurred, including the amortization of the step up in fair value of inventory acquired. The pro-forma net income for the nine months ended March 27, 2021 includes $ i 59.0 million, after-tax, of acquisition costs assuming the acquisition had occurred on June 28, 2020. The recurring pro-forma adjustments include estimates of interest expense for the Company's i 4.250% Senior Notes due 2029 ("Notes due 2029") and estimates of depreciation and amortization associated with fair value adjustments for property, plant and equipment and intangible assets acquired.
These unaudited pro-forma results do not necessarily represent financial results that would have been achieved had the acquisition actually occurred on June 28, 2020 or future consolidated results of operations of the Company.
Other
The acquisition of Eby-Brown Company LLC (“Eby-Brown”) in fiscal 2019 included contingent consideration, including earnout payments in the event certain operating results were achieved during a defined post-closing period. In the first quarter of fiscal 2021, the Company paid the first earnout payment of $ i 185.6 million, which included $ i 68.3 million recorded as a financing activity cash outflow and $ i 117.3 million recorded as an operating activity cash outflow in the consolidated statement of cash flows for the nine months ended March 27, 2021.
/
The Company is a holding company and conducts its operations through its subsidiaries, which have incurred or guaranteed indebtedness as described below.
Debt consisted of the following:
|
|
|
|
|
|
|
||
(In millions) |
|
As of April 2, 2022 |
|
|
As of July 3, 2021 |
|
||
ABL Facility |
|
$ |
i 1,422.0 |
|
|
$ |
i 586.3 |
|
i 5.500% Notes due i 2024 |
|
|
- |
|
|
|
i 350.0 |
|
i 6.875% Notes due i 2025 |
|
|
i 275.0 |
|
|
|
i 275.0 |
|
i 5.500% Notes due i 2027 |
|
|
i 1,060.0 |
|
|
|
i 1,060.0 |
|
i 4.250% Notes due i 2029 |
|
|
i 1,000.0 |
|
|
|
- |
|
Less: Original issue discount and deferred financing costs |
|
|
( i 35.9 |
) |
|
|
( i 30.8 |
) |
Long-term debt |
|
|
i 3,721.1 |
|
|
|
i 2,240.5 |
|
Less: current installments |
|
|
- |
|
|
|
- |
|
Total debt, excluding current installments |
|
$ |
i 3,721.1 |
|
|
$ |
i 2,240.5 |
|
Credit Agreement
PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, was a party to the Fourth Amended and Restated Credit Agreement dated December 30, 2019 (as amended by the First Amendment to Fourth Amended and Restated Credit Agreement dated as of April 29, 2020, and the Second Amendment to Fourth Amended and Restated Credit Agreement dated as of May 15, 2020, the “Prior Credit Agreement”). The Prior Credit Agreement had an aggregate principal amount of $ i 3.0 billion under the revolving loan facility and was scheduled to mature on i December 30, 2024.
On September 17, 2021, PFGC and Performance Food Group, Inc. entered into the Fifth Amended and Restated Credit Agreement (the “ABL Facility”) with Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent, and the other lenders party thereto, which amended the Prior Credit Agreement. The ABL Facility, among other things, (i) increases the aggregate principal amount available under the revolving loan facility from $ i 3.0 billion under the Prior Credit Agreement to $ i 4.0 billion under the ABL Facility, (ii) extends the stated maturity date from i December 30, 2024 under the Prior Credit Agreement to i September 17, 2026 under the ABL Facility, and (iii) includes an alternative reference rate, which provides mechanisms for the use of the Secured Overnight Financing Rate as a replacement rate upon a LIBOR cessation event.
Performance Food Group, Inc., a wholly-owned subsidiary of PFGC, is the lead borrower under the ABL Facility, which is jointly and severally guaranteed by, and secured by the majority of the assets of, PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than the captive insurance subsidiary and other excluded subsidiaries). Availability for
15
loans and letters of credit under the ABL Facility is governed by a borrowing base, determined by the application of specified advance rates against eligible assets, including trade accounts receivable, inventory, owned real properties, and owned transportation equipment. The borrowing base is reduced quarterly by a cumulative fraction of the real properties and transportation equipment values. Advances on accounts receivable and inventory are subject to change based on periodic commercial finance examinations and appraisals, and the real property and transportation equipment values included in the borrowing base are subject to change based on periodic appraisals. Audits and appraisals are conducted at the direction of the administrative agent for the benefit and on behalf of all lenders.
Borrowings under the ABL Facility bear interest, at Performance Food Group, Inc.’s option, at i (a) the Base Rate (defined as the greater of (i) the Federal Funds Rate in effect on such date plus i 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus i 1.0%) plus a spread, or (b) LIBOR plus a spread. / The ABL Facility also provides for an unused commitment fee rate of i 0.25% per annum.
The following table summarizes outstanding borrowings, availability, and the average interest rate under the Company's credit agreements:
(Dollars in millions) |
|
As of April 2, 2022 |
|
|
As of July 3, 2021 |
|
||
Aggregate borrowings |
|
$ |
i 1,422.0 |
|
|
$ |
i 586.3 |
|
Letters of credit under ABL Facility |
|
|
i 203.7 |
|
|
|
i 161.7 |
|
Excess availability, net of lenders’ reserves of $ i 101.9 and $ i 55.1 |
|
|
i 2,374.3 |
|
|
|
i 2,252.0 |
|
Average interest rate |
|
|
i 2.09 |
% |
|
|
i 2.32 |
% |
Senior Notes due 2029
On July 26, 2021, Performance Food Group, Inc. issued and sold $ i 1.0 billion aggregate principal amount of its Notes due i 2029, pursuant to an indenture dated as of July 26, 2021. The Notes due 2029 are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes due 2029 are not guaranteed by the Company.
Initially the Company expected to use the proceeds from the Notes due 2029 to finance the cash consideration payable in connection with the Core-Mark acquisition, to redeem the i 5.500% Notes due i 2024, and to pay the fees, expenses, and other transaction costs incurred in connection with the Notes due 2029. However, since there was no requirement to hold the funds in escrow until the Core-Mark Acquisition closed, a portion of the net proceeds from the Notes due 2029 were used to pay down the outstanding balance of the Prior Credit Agreement on July 26, 2021. The Notes due 2024 were redeemed in full on July 27, 2021. The Company then funded the cash consideration for the Core-Mark Acquisition with borrowings under the Prior Credit Agreement.
The Notes due 2029 were issued at i 100.0% of their par value. The Notes due 2029 mature on i August 1, 2029, and bear interest at a rate of i 4.250% per year, payable semi-annually in arrears.
i Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2029 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2029 at a price equal to i 101% (in the case of a change of control triggering event) or i 100%(in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. / Performance Food Group, Inc. may redeem all or a part of the Notes due 2029 at any time prior to August 1, 2024, at a redemption price equal to i 100% of the principal amount of the Notes due 2029 being redeemed plus a make-whole premium and accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, beginning on August 1, 2024, Performance Food Group, Inc. may redeem all or a part of the Notes due 2029 at a redemption price equal to i 102.125% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to i 101.163% and i 100% of the principal amount redeemed on August 1, 2025, and August 1, 2026, respectively. In addition, at any time prior to August 1, 2024, Performance Food Group, Inc. may redeem up to i 40% of the Notes due 2029 from the proceeds of certain equity offerings at a redemption price equal to i 104.250% of the principal amount thereof, plus accrued and unpaid interest.
The indenture governing the Notes due 2029 contains covenants limiting, among other things, PFGC’s and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications.
16
The Notes due 2029 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2029 to become or be declared due and payable.
Senior Notes due 2024
On May 17, 2016, Performance Food Group, Inc. issued and sold $ i 350.0 million aggregate principal amount of its i 5.500% Senior Notes due 2024 (the “Notes due i 2024”), pursuant to an indenture dated as of May 17, 2016. As described above, on July 26, 2021, Performance Food Group, Inc. issued and sold $ i 1.0 billion aggregate principal of its Notes due i 2029 and used a portion of the proceeds to redeem the Notes due 2024 in full. A significant portion of this redemption was considered an extinguishment, resulting in a $ i 3.2 million loss on extinguishment of debt within interest expense from the write-off of the pro-rata portion of the unamortized original issue discount and deferred financing costs related to the debt extinguishment. A portion of this redemption was considered a modification in accordance with FASB ASC 470-50, Debt-Modifications and Extinguishments, and as a result, $ i i 0.5 / million of unamortized deferred financing costs and original issue discount for the Notes due 2024 was deferred as deferred financing costs of the Notes due 2029.
/The Company determines if an arrangement is a lease at inception and recognizes a financing or operating lease liability and right-of-use asset in the Company’s consolidated balance sheet. Right-of-use assets and lease liabilities for both operating and finance leases are recognized based on present value of lease payments over the lease term at commencement date. Since the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. This rate was determined by using the yield curve based on the Company’s credit rating adjusted for the Company’s specific debt profile and secured debt risk. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The lease expenses for these short-term leases are recognized on a straight-line basis over the lease term. The Company has several lease agreements that contain lease and non-lease components, such as maintenance, taxes, and insurance, which are accounted for separately. The difference between the operating lease right-of-use assets and operating lease liabilities primarily relates to adjustments for deferred rent, favorable leases, and prepaid rent.
Subsidiaries of the Company have entered into numerous operating and finance leases for various warehouses, office facilities, equipment, tractors, and trailers. Our leases have remaining lease terms of i 1 year to i 20 years, some of which include i options to i extend the leases for up to i 10 years / , and some of which include i options to i terminate the leases within 1 year / . Certain full-service fleet lease agreements include variable lease payments associated with usage, which are recorded and paid as incurred. When calculating lease liabilities, lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
Certain of the leases for tractors, trailers, and other vehicles and equipment provide for residual value guarantees to the lessors. Circumstances that would require the subsidiary to perform under the guarantees include either (1) default on the leases with the leased assets being sold for less than the specified residual values in the lease agreements, or (2) decisions not to purchase the assets at the end of the lease terms combined with the sale of the assets, with sales proceeds less than the residual value of the leased assets specified in the lease agreements. Residual value guarantees under these operating lease agreements typically range between i 6% and i 20% of the value of the leased assets at inception of the lease. These leases have original terms ranging from i 5 to i 7 years and are set to expire at various dates ranging from i 2022 to i 2028. As of April 2, 2022, the undiscounted maximum amount of potential future payments for lease residual value guarantees totaled approximately $ i 16.2 million, which would be mitigated by the fair value of the leased assets at lease expiration.
The following table presents the location of the right-of-use assets and lease liabilities in the Company's consolidated balance sheet as of April 2, 2022 and July 3, 2021 (in millions), as well as the weighted-average lease term and discount rate for the Company's leases:
17
Leases |
|
Consolidated Balance Sheet Location |
|
As of |
|
|
As of |
|
||
Assets: |
|
|
|
|
|
|
|
|
||
Operating |
|
Operating lease right-of-use assets |
|
$ |
i 642.8 |
|
|
$ |
i 438.7 |
|
Finance |
|
Property, plant and equipment, net |
|
|
i 456.8 |
|
|
|
i 294.6 |
|
Total lease assets |
|
|
|
$ |
i 1,099.6 |
|
|
$ |
i 733.3 |
|
Liabilities: |
|
|
|
|
|
|
|
|
||
Current |
|
|
|
|
|
|
|
|
||
Operating |
|
Operating lease obligations—current installments |
|
$ |
i 112.8 |
|
|
$ |
i 77.0 |
|
Finance |
|
Finance lease obligations—current installments |
|
|
i 76.2 |
|
|
|
i 48.7 |
|
Non-current |
|
|
|
|
|
|
|
|
||
Operating |
|
Operating lease obligations, excluding current installments |
|
|
i 546.8 |
|
|
|
i 378.0 |
|
Finance |
|
Finance lease obligations, excluding current installments |
|
|
i 362.4 |
|
|
|
i 255.0 |
|
Total lease liabilities |
|
|
|
$ |
i 1,098.2 |
|
|
$ |
i 758.7 |
|
|
|
|
|
|
|
|
|
|
||
Weighted average remaining lease term |
|
|
|
|
|
|
|
|
||
Operating leases |
|
|
|
i 8.5 years |
|
|
i 8.6 years |
|
||
Finance leases |
|
|
|
i 5.8 years |
|
|
i 6.2 years |
|
||
Weighted average discount rate |
|
|
|
|
|
|
|
|
||
Operating leases |
|
|
|
|
i 3.9 |
% |
|
|
i 4.6 |
% |
Finance leases |
|
|
|
|
i 3.6 |
% |
|
|
i 4.5 |
% |
The following table presents the location of lease costs in the Company’s consolidated statement of operations for the periods reported (in millions):
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
Lease Cost |
|
Statement of Operations Location |
|
|
|
|
|
|
|
|
||||||||
Finance lease cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of finance lease assets |
|
Operating expenses |
|
$ |
i 20.6 |
|
|
$ |
i 10.0 |
|
|
$ |
i 51.9 |
|
|
$ |
i 25.8 |
|
Interest on lease liabilities |
|
Interest expense |
|
|
i 4.2 |
|
|
|
i 3.3 |
|
|
|
i 12.4 |
|
|
|
i 9.3 |
|
Total finance lease cost |
|
|
|
$ |
i 24.8 |
|
|
$ |
i 13.3 |
|
|
$ |
i 64.3 |
|
|
$ |
i 35.1 |
|
Operating lease cost |
|
Operating expenses |
|
|
i 43.6 |
|
|
|
i 25.8 |
|
|
|
i 111.9 |
|
|
|
i 81.1 |
|
Short-term lease cost |
|
Operating expenses |
|
|
i 10.9 |
|
|
|
i 5.9 |
|
|
|
i 39.5 |
|
|
|
i 14.9 |
|
Total lease cost |
|
|
|
$ |
i 79.3 |
|
|
$ |
i 45.0 |
|
|
$ |
i 215.7 |
|
|
$ |
i 131.1 |
|
The following table presents the supplemental cash flow information related to leases for the periods reported (in millions):
(In millions) |
|
Nine Months Ended |
|
|
Nine Months Ended |
|
||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
||
Operating cash flows from operating leases |
|
$ |
i 99.0 |
|
|
$ |
i 75.6 |
|
Operating cash flows from finance leases |
|
|
i 12.4 |
|
|
|
i 9.3 |
|
Financing cash flows from finance leases |
|
|
i 67.4 |
|
|
|
i 27.3 |
|
Right-of-use assets obtained in exchange for lease obligations: |
|
|
|
|
|
|
||
Operating leases |
|
|
i 63.5 |
|
|
|
i 81.9 |
|
Finance leases |
|
|
i 96.7 |
|
|
|
i 102.9 |
|
/
The following table presents the future minimum lease payments under non-cancelable leases as of April 2, 2022 (in millions):
18
Fiscal Year |
|
Operating Leases |
|
|
Finance Leases |
|
||
Remainder of 2022 |
|
$ |
i 35.1 |
|
|
$ |
i 22.5 |
|
2023 |
|
|
i 130.9 |
|
|
|
i 90.2 |
|
2024 |
|
|
i 107.2 |
|
|
|
i 88.4 |
|
2025 |
|
|
i 89.4 |
|
|
|
i 81.3 |
|
2026 |
|
|
i 74.1 |
|
|
|
i 76.8 |
|
Thereafter |
|
|
i 349.5 |
|
|
|
i 126.9 |
|
Total future minimum lease payments |
|
$ |
i 786.2 |
|
|
$ |
i 486.1 |
|
Less: Interest |
|
|
i 126.6 |
|
|
|
i 47.5 |
|
Present value of future minimum lease payments |
|
$ |
i 659.6 |
|
|
$ |
i 438.6 |
|
As of April 2, 2022, the Company has additional operating leases that have not yet commenced, which total $ i 428.3 million in future minimum lease payments. i These leases relate primarily to warehouse and vehicle leases and are expected to commence in fiscal 2022 with lease terms of i 1 to i 20 years. /
/
The carrying values of cash, accounts receivable, outstanding checks in excess of deposits, trade accounts payable, and accrued expenses approximate their fair values because of the relatively short maturities of those instruments. The derivative assets and liabilities are recorded at fair value on the balance sheet. The fair value of long-term debt, which has a carrying value of $ i 3,721.1 million and $ i 2,240.5 million, is $ i 3,671.2 million and $ i 2,346.2 million at April 2, 2022 and July 3, 2021, respectively, and is determined by reviewing current market pricing related to comparable debt issued at the time of the balance sheet date, and is considered a Level 2 measurement.
/
The determination of the Company’s overall effective tax rate requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. The effective tax rate reflects the income earned and taxed in various federal, state, and foreign jurisdictions. Tax law changes, increases and decreases in temporary and permanent differences between book and tax items, tax credits, and the Company’s change in income in each jurisdiction all affect the overall effective tax rate. It is the Company’s practice to recognize interest and penalties related to uncertain tax positions in income tax expense.
The Company’s effective tax rate was i 31.3% for the three months ended April 2, 2022 and i 37.1% for the three months ended March 27, 2021. The Company’s effective tax rate was i 28.4% for the nine months ended April 2, 2022 and i 14.2% for the nine months ended March 27, 2021. The effective tax rate varies from the i 21% statutory rate primarily due to state taxes, federal credits, and other permanent items. The excess tax benefit of exercised and vested stock awards is treated as a discrete item. The effective tax rates for periods ended April 2, 2022 differed from the prior year periods due to the increase of state taxes and non-deductible expenses as a percentage of book income and the decrease in deductible discrete items related to stock-based compensation as a percentage of book income.
As of April 2, 2022 and July 3, 2021, the Company had net deferred tax assets of $ i 264.1 million and $ i 159.2 million, respectively, and deferred tax liabilities of $ i 687.9 million and $ i 299.6 million, respectively. As of April 2, 2022 and July 3, 2021, the Company had established a valuation allowance of $ i 1.3 million and $ i 0.7 million, respectively, net of federal benefit, against deferred tax assets related to certain net operating losses which are not likely to be realized due to limitations on utilization. The change in the deferred tax balances and the valuation allowance relates primarily to the fiscal 2022 acquisitions' deferred tax assets and deferred taxes established in purchase accounting. The Company believes that it is more likely than not that the remaining deferred tax assets will be realized.
The Company records a liability for Uncertain Tax Positions in accordance with FASB ASC 740-10-25, Income Taxes – General – Recognition. As of April 2, 2022 and July 3, 2021, the Company had approximately $ i 0.3 million and $ i 0.3 million of unrecognized tax benefits, respectively. The Company does not expect a material decrease in unrecognized tax benefits will occur in the next twelve months.
/
Purchase Obligations
The Company had outstanding contracts and purchase orders of $ i 168.8 million related to capital projects and services including purchases of compressed natural gas for its trucking fleet at April 2, 2022. Amounts due under these contracts were not included on the Company’s consolidated balance sheet as of April 2, 2022.
19
Guarantees
The Company from time to time enters into certain types of contracts that contingently require it to indemnify various parties against claims from third parties. These contracts primarily relate to: (i) certain real estate leases under which subsidiaries of the Company may be required to indemnify property owners for environmental and other liabilities and other claims arising from their use of the applicable premises; (ii) certain agreements with the Company’s officers, directors, and employees under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship; and (iii) customer agreements under which the Company may be required to indemnify customers for certain claims brought against them with respect to the supplied products. Generally, a maximum obligation under these contracts is not explicitly stated. Because the obligated amounts associated with these types of agreements are not explicitly stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, the Company has not been required to make payments under these obligations and, therefore, no liabilities have been recorded for these obligations in the Company’s consolidated balance sheets.
Litigation
The Company is engaged in various legal proceedings that have arisen but have not been fully adjudicated. The likelihood of loss arising from these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible to probable. When losses are probable and reasonably estimable, they have been accrued. Based on estimates of the range of potential losses associated with these matters, management does not believe that the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect upon the consolidated financial position or results of operations of the Company. However, the final results of legal proceedings cannot be predicted with certainty and, if the Company failed to prevail in one or more of these legal matters, and the associated realized losses were to exceed the Company’s current estimates of the range of potential losses, the Company’s consolidated financial position or results of operations could be materially adversely affected in future periods.
JUUL Labs, Inc. Marketing Sales Practices, and Products Liability Litigation. In October 2019, a Multidistrict Litigation action (“MDL”) was initiated in order to centralize litigation against JUUL Labs, Inc. (“JUUL”) and other parties in connection with JUUL’s e-cigarettes and related devices and components in the United States District Court for the Northern District of California. On March 11, 2020, counsel for plaintiffs and the Plaintiffs’ Steering Committee filed a Master Complaint in the MDL ("master Complaint") naming, among several other entities and individuals including JUUL, Altria Group, Inc., Philip Morris USA, Inc., Altria Client Services LLC, Altria Group Distribution Company, Altria Enterprises LLC, certain members of management and/or individual investors in JUUL, various e-liquid manufacturers, and various retailers, including the Company’s subsidiaries Eby-Brown and Core-Mark, as defendants. The Master Complaint also named additional distributors of JUUL products (collectively with Eby-Brown and Core-Mark, the “Distributor Defendants”). The Master Complaint contains various state law claims and alleges that the Distributor Defendants: (i) failed to disclose JUUL’s nicotine contents or the risks associated; (ii) pushed a product designed for a youth market; (iii) engaged with JUUL in planning and marketing its product in a manner designed to maximize the flow of JUUL products; (iv) met with JUUL management in San Francisco, California to further these business dealings; and (v) received incentives and business development funds for marketing and efficient sales. Individual plaintiffs may also file separate and abbreviated Short Form Complaints (“SFC”) that incorporate the allegations in the Master Complaint. JUUL, and Eby-Brown are parties to a Domestic Wholesale Distribution Agreement dated March 10, 2020 (the "Distribution Agreement"), and JUUL has agreed to defend and indemnify Eby-Brown under the terms of that agreement and is paying Eby-Brown’s outside counsel fees directly. In addition, Core-Mark and JUUL have entered into a Defense and Indemnity Agreement dated March 8, 2021 (the "Defense Agreement") pursuant to which JUUL has agreed to defend and indemnify Core-Mark, and JUUL is paying Core-Mark’s outside counsel fees directly.
On May 29, 2020, JUUL filed a motion to dismiss on the basis that the alleged state law claims are preempted by federal law and a motion to stay/dismiss the litigation based on the Food and Drug Administration’s (“FDA”) primary jurisdiction to regulate e-cigarette and related vaping products and pending FDA review of JUUL’s Pre-Market Tobacco Application (“PMTA”). On June 29, 2020, Eby-Brown and Core-Mark, along with the other Distributor Defendants, filed similar motions incorporating JUUL’s arguments. The court denied these motions on October 23, 2020.
The court has also selected the first round of bellwether cases. Bellwether trials are test cases generally intended to try a contested issue common to several plaintiffs in mass tort litigation. The results of these proceedings are used to shape the litigation process for the remaining cases and to aid the parties in assessing potential settlement values of the remaining claims. Here, the court authorized a pool of 24 bellwether plaintiffs, with plaintiffs selecting six cases, the combined defendants selecting six cases, and the court selecting 12 cases at random. The court and the parties have completed the initial bellwether selection process, and the first of these four bellwether trials has been set for June 21, 2022, with the remaining three trials set for the third and fourth calendar quarters of 2022. Eby-Brown and Core-Mark have been dismissed from each of the 2022 bellwether cases and will not be parties or participants to those trials. The Distributor Defendants and the retailers do, however, remain named defendants in various SFCs that were not selected as bellwether trial plaintiffs for 2022. The litigation of those claims is not scheduled to occur until after the 2022
20
bellwether trials conclude. The second round of bellwether cases will be chosen in May 2022, with trials proceeding for those cases in 2023. In the meantime, discovery related to the claims in the Master Complaint continues as to the Distributor Defendants.
On September 3, 2020, the Cherokee Nation filed a parallel lawsuit in Oklahoma state court against several entities including JUUL, e-liquid manufacturers, various retailers, and various distributors, including Eby-Brown and Core-Mark, alleging similar claims to the claims at issue in the MDL (the “Oklahoma Litigation”). The defendants in the Oklahoma Litigation attempted to transfer the case into the MDL, but a federal court in Oklahoma remanded the case to Oklahoma state court before the Judicial Panel on Multidistrict Litigation effectuated the transfer of the MDL, which means the Oklahoma Litigation is no longer eligible for transfer to the MDL. Since then, parties agreed to stay the Oklahoma Litigation and proceed to mediation after the Oklahoma Supreme Court held that public nuisance claims cannot be brought in consumer products cases. JUUL attempted mediation with the Cherokee Nation in March 2022, which did not result in resolution. The parties now await the Cherokee Nation’s anticipated motion to lift the stay. If the stay is lifted, discovery will recommence, and the parties will litigate the various discovery disputes that were outstanding prior to the stay.
On September 10, 2021, Michael Lumpkins filed a parallel lawsuit in Illinois state court against several entities including JUUL, e-liquid manufacturers, various retailers, and various distributors, including the Company’s subsidiaries, Eby-Brown and Core-Mark, alleging similar claims to the claims at issue in the MDL (the “Illinois Litigation”). Because there is no federal jurisdiction for this case, it will proceed in Illinois state court. Plaintiff alleges as damages that his use of JUUL products caused a brain injury which was later exacerbated by medical negligence. The Court has entered a case management schedule, with a trial tentatively scheduled to take place in the first calendar quarter of 2024. Core-Mark has filed a motion to dismiss for lack of personal jurisdiction. Eby-Brown has filed a substantive motion to dismiss. Plaintiff has served discovery on Core-Mark and Eby-Brown in an effort to challenge both motions to dismiss and has opted to withdraw the current iteration of the complaint with plans to file an amended complaint in May 2022. The defense and indemnity of Eby-Brown and Core-Mark for the Illinois Litigation is indicated by the plain language within the Distribution Agreement and the Defense Agreement.
At this time, the Company is unable to predict whether the FDA will approve JUUL’s PMTA, nor is the Company able to estimate any potential loss or range of loss in the event of an adverse finding against it in the MDL, the Oklahoma litigation, the Illinois litigation, or any subsequent litigation which may occur related to the individual SFCs. The Company will continue to vigorously defend itself.
Tax Liabilities
The Company is subject to customary audits by authorities in the jurisdictions where it conducts business in the United States and Canada, which may result in assessments of additional taxes.
/
The Company participates in, and has an equity method investment in, a purchasing alliance that was formed to obtain better pricing, to expand product options, to reduce internal costs, and to achieve greater inventory turnover. The Company’s investment in the purchasing alliance was $ i 8.0 million as of April 2, 2022 and $ i 6.0 million as of July 3, 2021. For the three-month periods ended April 2, 2022 and March 27, 2021, the Company recorded purchases of $ i 441.8 million and $ i 296.5 million, respectively, through the purchasing alliance. During the nine-month periods ended April 2, 2022 and March 27, 2021, the Company recorded purchases of $ i 1,342.6 million and $ i 804.6 million, respectively, through the purchasing alliance.
/
Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is calculated using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. The Company’s potential common shares include outstanding stock-based compensation awards and expected issuable shares under the employee stock purchase plan. In computing diluted earnings per common share, the average closing stock price for the period is used in determining the number of shares assumed to be purchased with the assumed proceeds under the treasury stock method. i i No / potential common shares were considered antidilutive for the three and nine months ended April 2, 2022. For the three months ended March 27, 2021, diluted loss per common share is the same as basic loss per common share because the inclusion of potential common shares is antidilutive. Potential common shares of i 0.2 million for the nine months ended March 27, 2021, were not included in computing diluted earnings per common share because the effect would have been antidilutive.
21
A reconciliation of the numerators and denominators for the basic and diluted earnings per common share computations is as follows:
(In millions, except per share amounts) |
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
i 23.4 |
|
|
$ |
( i 7.6 |
) |
|
$ |
i 36.5 |
|
|
$ |
i 9.3 |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding |
|
|
i 153.3 |
|
|
|
i 132.3 |
|
|
|
i 148.6 |
|
|
|
i 132.0 |
|
Dilutive effect of potential common shares |
|
|
i 1.6 |
|
|
|
i - |
|
|
|
i 1.6 |
|
|
|
i 1.2 |
|
Weighted-average dilutive shares outstanding |
|
|
i 154.9 |
|
|
|
i 132.3 |
|
|
|
i 150.2 |
|
|
|
i 133.2 |
|
Basic earnings per common share |
|
$ |
i 0.15 |
|
|
$ |
( i 0.06 |
) |
|
$ |
i 0.25 |
|
|
$ |
i 0.07 |
|
Diluted earnings per common share |
|
$ |
i 0.15 |
|
|
$ |
( i 0.06 |
) |
|
$ |
i 0.24 |
|
|
$ |
i 0.07 |
|
13. Stock-Based Compensation
In connection with the Core-Mark acquisition, the Company assumed the outstanding stock-based compensation awards from Core-Mark’s 2010 Long-Term Incentive Plan and 2019 Long-Term Incentive Plan. On September 1, 2021, each outstanding time-based restricted stock unit (“RSU”) held by a non-employee director of Core-Mark was cancelled and converted into the right to receive i 0.44 shares of PFGC common stock (“Exchange Ratio”) and $ i 23.875 in cash, without interest (“Per-Share Cash Amount”). Time-based RSUs held by Core-Mark employees were converted to PFG RSUs based on the prescribed ratio in the merger agreement. The ratio was calculated as the sum of the Exchange Ratio plus the quotient of the Per-Share Cash Amount divided by the volume weighted average sale price of PFGC common stock for the i ten full consecutive trading days ending on August 31, 2021 (“Stock Award Exchange Ratio”). Each performance-based restricted stock unit (“PSU”) of Core-Mark was converted into a PFG RSU based on the greater of the actual performance as of the acquisition date or the target performance level multiplied by the Stock Award Exchange Ratio. The pro-rata actual level of performance for the applicable performance metrics were greater than target, therefore, the PSUs were converted based on actual performance. The PFG RSUs granted as a result of the conversion are subject to the same terms and conditions, such as vesting schedule and termination related vesting provisions, as the Core-Mark awards were subject to prior to their conversion.
On September 1, 2021, the Company granted i 614,056 RSUs with a grant date fair value of $ i 49.55 per share. With the assistance of a specialist, the total $ i 30.4 million grant date fair value was bifurcated with $ i 9.2 million recognized as pre-combination vesting within the purchase price as consideration transferred and $ i 21.2 million is post-combination expense to be recognized over the weighted average remaining vesting period of i 1.80 years.
/14. Segment Information
In the second quarter of fiscal 2022, the Company changed its operating segments to reflect the manner in which the chief operating decision maker (“CODM”) manages the business. Based on the Company’s organization structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company now has i three reportable segments: Foodservice, Vistar, and Convenience.
The Foodservice segment distributes a broad line of national brands, customer brands, and our proprietary-branded food and food-related products, or “Performance Brands.” Foodservice sells to independent and multi-unit “Chain” restaurants and other institutions such as schools, healthcare facilities, business and industry locations, and retail establishments. Our Chain customers are multi-unit restaurants with five or more locations and include some of the most recognizable family and casual dining restaurant chains. Our Vistar segment specializes in distributing candy, snacks, beverages, and other items nationally to vending, office coffee service, theater, retail, hospitality, and other channels. Our Convenience channel distributes candy, snacks, beverages, cigarettes, other tobacco products, food and foodservice products, and other items to convenience stores across the United States and Canada. Intersegment sales represent sales between the segments, which are eliminated in consolidation. Management evaluates the performance of each operating segment based on various operating and financial metrics, including total sales and EBITDA.
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 the Company’s internal logistics unit responsible for managing and allocating inbound logistics revenue and expense. Beginning in the second quarter of fiscal 2022, this also includes the operating results from certain recent immaterial acquisitions. Corporate & All Other may also include capital expenditures for certain information technology projects that are transferred to the segments once placed in service.
22
The presentation and amounts for the three and nine months ended March 27, 2021 and as of July 3, 2021 have been restated to reflect the segment changes described above.
(In millions) |
|
Foodservice |
|
|
Vistar |
|
|
Convenience |
|
|
Corporate |
|
|
Eliminations |
|
|
Consolidated |
|
||||||
For the three months ended April 2, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net external sales |
|
$ |
i 6,600.4 |
|
|
$ |
i 891.6 |
|
|
$ |
i 5,574.6 |
|
|
$ |
i 12.4 |
|
|
$ |
— |
|
|
$ |
i 13,079.0 |
|
Inter-segment sales |
|
|
i 4.5 |
|
|
|
i 0.6 |
|
|
|
— |
|
|
|
i 122.3 |
|
|
|
( i 127.4 |
) |
|
|
— |
|
Total sales |
|
|
i 6,604.9 |
|
|
|
i 892.2 |
|
|
|
i 5,574.6 |
|
|
|
i 134.7 |
|
|
|
( i 127.4 |
) |
|
|
i 13,079.0 |
|
Depreciation and amortization |
|
|
i 67.3 |
|
|
|
i 13.3 |
|
|
|
i 37.3 |
|
|
|
i 6.2 |
|
|
|
— |
|
|
|
i 124.1 |
|
Capital expenditures |
|
|
i 49.2 |
|
|
|
i 9.1 |
|
|
|
i 10.3 |
|
|
|
i 3.7 |
|
|
|
— |
|
|
|
i 72.3 |
|
For the three months ended March 27, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net external sales |
|
$ |
i 5,184.2 |
|
|
$ |
i 589.9 |
|
|
$ |
i 1,418.9 |
|
|
$ |
i 9.5 |
|
|
$ |
— |
|
|
$ |
i 7,202.5 |
|
Inter-segment sales |
|
|
i 2.3 |
|
|
|
i 0.4 |
|
|
|
- |
|
|
|
i 90.5 |
|
|
|
( i 93.2 |
) |
|
|
— |
|
Total sales |
|
|
i 5,186.5 |
|
|
|
i 590.3 |
|
|
|
i 1,418.9 |
|
|
|
i 100.0 |
|
|
|
( i 93.2 |
) |
|
|
i 7,202.5 |
|
Depreciation and amortization |
|
|
i 57.9 |
|
|
|
i 12.5 |
|
|
|
i 3.6 |
|
|
|
i 6.8 |
|
|
|
— |
|
|
|
i 80.8 |
|
Capital expenditures |
|
|
i 29.9 |
|
|
|
i 6.2 |
|
|
|
i 2.1 |
|
|
|
( i 2.3 |
) |
|
|
— |
|
|
|
i 35.9 |
|
(In millions) |
|
Foodservice |
|
|
Vistar |
|
|
Convenience |
|
|
Corporate |
|
|
Eliminations |
|
|
Consolidated |
|
||||||
For the nine months ended April 2, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net external sales |
|
$ |
i 19,168.1 |
|
|
$ |
i 2,644.3 |
|
|
$ |
i 14,455.8 |
|
|
$ |
i 35.9 |
|
|
$ |
— |
|
|
$ |
i 36,304.1 |
|
Inter-segment sales |
|
|
i 13.2 |
|
|
|
i 1.7 |
|
|
|
- |
|
|
|
i 340.8 |
|
|
|
( i 355.7 |
) |
|
|
— |
|
Total sales |
|
|
i 19,181.3 |
|
|
|
i 2,646.0 |
|
|
|
i 14,455.8 |
|
|
|
i 376.7 |
|
|
|
( i 355.7 |
) |
|
|
i 36,304.1 |
|
Depreciation and amortization |
|
|
i 192.3 |
|
|
|
i 39.5 |
|
|
|
i 89.0 |
|
|
|
i 18.5 |
|
|
|
— |
|
|
|
i 339.3 |
|
Capital expenditures |
|
|
i 95.9 |
|
|
|
i 14.4 |
|
|
|
i 20.3 |
|
|
|
i 10.2 |
|
|
|
— |
|
|
|
i 140.8 |
|
For the nine months ended March 27, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net external sales |
|
$ |
i 15,104.6 |
|
|
$ |
i 1,737.5 |
|
|
$ |
i 4,228.4 |
|
|
$ |
i 24.0 |
|
|
$ |
— |
|
|
$ |
i 21,094.5 |
|
Inter-segment sales |
|
|
i 5.7 |
|
|
|
i 1.6 |
|
|
|
- |
|
|
|
i 275.1 |
|
|
|
( i 282.4 |
) |
|
|
— |
|
Total sales |
|
|
i 15,110.3 |
|
|
|
i 1,739.1 |
|
|
|
i 4,228.4 |
|
|
|
i 299.1 |
|
|
|
( i 282.4 |
) |
|
|
i 21,094.5 |
|
Depreciation and amortization |
|
|
i 182.4 |
|
|
|
i 33.8 |
|
|
|
i 7.8 |
|
|
|
i 23.1 |
|
|
|
— |
|
|
|
i 247.1 |
|
Capital expenditures |
|
|
i 49.9 |
|
|
|
i 41.3 |
|
|
|
i 21.5 |
|
|
|
i 6.2 |
|
|
|
— |
|
|
|
i 118.9 |
|
EBITDA for each reportable segment and Corporate & All Other is presented below along with a reconciliation to consolidated income before taxes.
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Foodservice EBITDA |
|
$ |
i 169.6 |
|
|
$ |
i 138.3 |
|
|
$ |
i 487.5 |
|
|
$ |
i 449.8 |
|
Vistar EBITDA |
|
|
i 48.0 |
|
|
|
i 14.9 |
|
|
|
i 126.9 |
|
|
|
i 42.0 |
|
Convenience EBITDA |
|
|
i 42.7 |
|
|
|
i 2.0 |
|
|
|
i 119.4 |
|
|
|
i 25.0 |
|
Corporate & All Other EBITDA |
|
|
( i 56.3 |
) |
|
|
( i 49.4 |
) |
|
|
( i 208.5 |
) |
|
|
( i 144.9 |
) |
Depreciation and amortization |
|
|
( i 124.1 |
) |
|
|
( i 80.8 |
) |
|
|
( i 339.3 |
) |
|
|
( i 247.1 |
) |
Interest expense |
|
|
( i 45.9 |
) |
|
|
( i 37.1 |
) |
|
|
( i 135.1 |
) |
|
|
( i 114.0 |
) |
Income before taxes |
|
$ |
i 34.0 |
|
|
$ |
( i 12.1 |
) |
|
$ |
i 50.9 |
|
|
$ |
i 10.8 |
|
Total assets by reportable segment, excluding intercompany receivables between segments, are as follows:
(In millions) |
|
As of |
|
|
As of |
|
||
Foodservice |
|
$ |
i 6,365.5 |
|
|
$ |
i 5,791.7 |
|
Vistar |
|
|
i 1,086.7 |
|
|
|
i 1,049.7 |
|
Convenience |
|
|
i 4,177.2 |
|
|
|
i 681.9 |
|
Corporate & All Other |
|
|
i 350.2 |
|
|
|
i 322.4 |
|
Total assets |
|
$ |
i 11,979.6 |
|
|
$ |
i 7,845.7 |
|
23
/
The following table presents the changes in the carrying amount of goodwill for each reportable segment:
(In millions) |
|
Foodservice |
|
|
Vistar |
|
|
Convenience |
|
|
Other |
|
|
Total |
|
|||||
Balance as of July 3, 2021 |
|
|
i 1,199.4 |
|
|
|
i 93.9 |
|
|
|
i 20.9 |
|
|
|
i 40.5 |
|
|
|
i 1,354.7 |
|
Acquisitions—current year |
|
|
i 69.5 |
|
|
|
- |
|
|
|
i 867.3 |
|
|
|
- |
|
|
|
i 936.8 |
|
Balance as of April 2, 2022 |
|
$ |
i 1,268.9 |
|
|
$ |
i 93.9 |
|
|
$ |
i 888.2 |
|
|
$ |
i 40.5 |
|
|
$ |
i 2,291.5 |
|
The sales mix for the Company’s principal product and service categories is as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(In millions) |
|
|
|
|
|
|
|
|
||||||||
Cigarettes |
|
$ |
i 3,522.2 |
|
|
$ |
i 1,003.8 |
|
|
$ |
i 9,361.0 |
|
|
$ |
i 3,039.0 |
|
Center of the plate |
|
|
i 2,671.6 |
|
|
|
i 2,021.3 |
|
|
|
i 7,947.9 |
|
|
|
i 5,829.7 |
|
Canned and dry groceries |
|
|
i 1,148.5 |
|
|
|
i 776.4 |
|
|
|
i 3,260.4 |
|
|
|
i 2,292.1 |
|
Frozen foods |
|
|
i 1,082.0 |
|
|
|
i 768.7 |
|
|
|
i 2,922.0 |
|
|
|
i 2,238.7 |
|
Refrigerated and dairy products |
|
|
i 1,065.9 |
|
|
|
i 731.8 |
|
|
|
i 2,916.1 |
|
|
|
i 2,151.3 |
|
Candy/snack/theater and concession |
|
|
i 1,001.8 |
|
|
|
i 366.5 |
|
|
|
i 2,673.6 |
|
|
|
i 1,104.4 |
|
Paper products and cleaning supplies |
|
|
i 662.0 |
|
|
|
i 520.2 |
|
|
|
i 1,907.9 |
|
|
|
i 1,521.1 |
|
Other tobacco products |
|
|
i 702.6 |
|
|
|
i 179.5 |
|
|
|
i 1,773.7 |
|
|
|
i 503.0 |
|
Beverage |
|
|
i 619.1 |
|
|
|
i 352.3 |
|
|
|
i 1,751.0 |
|
|
|
i 1,039.0 |
|
Other miscellaneous goods and services |
|
|
i 346.0 |
|
|
|
i 292.4 |
|
|
|
i 1,037.1 |
|
|
|
i 782.1 |
|
Produce |
|
|
i 257.3 |
|
|
|
i 189.6 |
|
|
|
i 753.4 |
|
|
|
i 594.1 |
|
Total |
|
$ |
i 13,079.0 |
|
|
$ |
i 7,202.5 |
|
|
$ |
i 36,304.1 |
|
|
$ |
i 21,094.5 |
|
Cigarette sales represented i 26.9% and i 25.8% of net sales for the three and nine months ended April 2, 2022 compared to i 13.9% and i 14.4% for the three and nine months ended March 27, 2021, respectively. The Company’s significant suppliers include Altria Group, Inc. (parent company of Philip Morris USA, Inc.) and R.J. Reynolds Tobacco Company, which, in the aggregate, represents approximately i 20.3% of products purchased for the nine months ended April 2, 2022. Although cigarettes represent a significant portion of the Company’s total net sales and cost of goods sold, the majority of the Company's gross profit is generated from the sales of food and food-related products.
/24
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited consolidated financial statements and notes thereto included elsewhere in this quarterly report on Form 10-Q and the audited consolidated financial statements and the notes thereto included in the Form 10-K. In addition to historical consolidated financial information, this discussion contains forward-looking statements that reflect our plans, estimates, and beliefs and involve numerous risks and uncertainties, including but not limited to those described in the “Item 1A. Risk Factors” section of the Form 10-K. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Special Note Regarding Forward-Looking Statements” in this quarterly report on Form 10-Q.
We market and distribute over 250,000 food and food-related products to customers across the United States and Canada from approximately 150 distribution facilities to over 300,000 customer locations in the “food-away-from-home” industry. We offer our customers a broad assortment of products including our proprietary-branded products, nationally branded products, and products bearing our customers’ brands. Our product assortment ranges from “center-of-the-plate” items (such as beef, pork, poultry, and seafood), frozen foods, and groceries to candy, snacks, and beverages. We also sell disposables, cleaning and kitchen supplies, and related products used by our customers, as well as cigarettes and other tobacco products. In addition to the products we offer to our customers, we provide value-added services by allowing our customers to benefit from our industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and operational strategy.
In the second quarter of fiscal 2022, the Company changed its operating segments to reflect the manner in which the business is managed. Based on the Company’s organization structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company now has three reportable segments: Foodservice, Vistar, and Convenience. Our Foodservice segment distributes a broad line of national brands, customer brands, and our proprietary-branded food and food-related products, or “Performance Brands.” Foodservice sells to independent and multi-unit “Chain” restaurants and other institutions such as schools, healthcare facilities, business and industry locations, and retail establishments. Our Chain customers are multi-unit restaurants with five or more locations and include some of the most recognizable family and casual dining restaurant chains. Our Vistar segment specializes in distributing candy, snacks, beverages, and other items nationally to vending, office coffee service, theater, retail, hospitality, and other channels. Our Convenience channel distributes candy, snacks, beverages, cigarettes, other tobacco products, food and foodservice products and other items to convenience stores across the United States and Canada. We believe that there are substantial synergies across our segments. Cross-segment synergies include procurement, operational best practices such as the use of new productivity technologies, and supply chain and network optimization, as well as shared corporate functions such as accounting, treasury, tax, legal, information systems, and human resources.
On September 1, 2021, Performance Food Group Company completed the acquisition of Core-Mark. As a result, the Company expanded its convenience business, which now includes operations in Canada. Refer to Note 5. Business Combinations for additional details regarding the acquisition of Core-Mark.
Key Factors Affecting Our Business
We believe that our short-term performance has been, and is expected to continue to be, adversely affected by the ongoing COVID-19 pandemic.
Our business, our industry and the U.S. economy continue to be adversely affected by the ongoing COVID-19 pandemic and related supply chain disruptions and labor shortages. The Company continues to actively monitor the impacts of the ongoing COVID-19 pandemic on all aspects of our business including related actions taken by government authorities.
During the first nine months of fiscal 2022, economic and operating conditions for our business improved significantly. As governmental restrictions are eased, consumers are returning to consuming food away from home, traveling, and attending events at entertainment venues. However, the Company and our industry may continue to face challenges as the recovery continues, such as availability of product supply, increased product and logistics costs, access to labor supply, lower disposable incomes, and the emergence of COVID-19 variants. The extent to which these challenges will affect our future financial position, liquidity, and results of operations remains uncertain.
Despite the near-term impact of the ongoing COVID-19 pandemic, we believe that our long-term performance is principally affected by the following key factors:
25
How We Assess the Performance of Our Business
In assessing the performance of our business, we consider a variety of performance and financial measures. The key measures used by our management are discussed below. The percentages on the results presented below are calculated based on rounded numbers.
Net Sales
Net sales is equal to gross sales, plus excise taxes, minus sales returns; sales incentives that we offer to our customers, such as rebates and discounts that are offsets to gross sales; and certain other adjustments. Our net sales are driven by changes in case volumes, product inflation that is reflected in the pricing of our products, and mix of products sold.
Gross Profit
Gross profit is equal to our net sales minus our cost of goods sold. Cost of goods sold primarily includes inventory costs (net of supplier consideration), inbound freight, and remittances of excise tax. Cost of goods sold generally changes as we incur higher or lower costs from our suppliers and as our customer and product mix changes.
EBITDA and Adjusted EBITDA
Management measures operating performance based on our EBITDA, defined as net income before interest expense, interest income, income taxes, and depreciation and amortization. EBITDA is not defined under GAAP and is not a measure of operating income, operating performance, or liquidity presented in accordance with GAAP and is subject to important limitations. Our definition of EBITDA may not be the same as similarly titled measures used by other companies.
We believe that the presentation of EBITDA enhances an investor’s understanding of our performance. We use this measure to evaluate the performance of our segments and for business planning purposes. We present EBITDA in order to provide supplemental information that we consider relevant for the readers of our consolidated financial statements included elsewhere in this report, and such information is not meant to replace or supersede GAAP measures.
In addition, our management uses 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 that 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 our ABL Facility and indentures (other than certain pro forma adjustments permitted under our ABL Facility and indentures governing the Notes due 2025, Notes due 2027, and Notes due 2029 relating to the Adjusted EBITDA contribution of acquired entities or businesses prior to the acquisition date). Under our ABL Facility and indentures, our ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments, and making restricted payments is tied to ratios based on Adjusted EBITDA (as defined in the ABL Facility and indentures). Our definition of Adjusted EBITDA may not be the same as similarly titled measures used by other companies.
26
Adjusted EBITDA is not defined under GAAP and is subject to important limitations. We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors, and other interested parties, including our lenders under the ABL Facility and holders of our Notes due 2025, Notes due 2027, and Notes due 2029 in their evaluation of the operating performance of companies in industries similar to ours. 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.
EBITDA and Adjusted EBITDA have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. For example, EBITDA and Adjusted EBITDA:
In calculating Adjusted EBITDA, we add back certain non-cash, non-recurring, and other items as permitted or required by our ABL Facility and indentures. Adjusted EBITDA among other things:
We have included the calculations of EBITDA and Adjusted EBITDA for the periods presented.
Results of Operations, EBITDA, and Adjusted EBITDA
The following table sets forth a summary of our results of operations, EBITDA, and Adjusted EBITDA for the periods indicated (in millions, except per share data):
|
|
Three Months Ended |
|
|||||||||||||
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
Net sales |
|
$ |
13,079.0 |
|
|
$ |
7,202.5 |
|
|
$ |
5,876.5 |
|
|
|
81.6 |
|
Cost of goods sold |
|
|
11,733.4 |
|
|
|
6,369.8 |
|
|
|
5,363.6 |
|
|
|
84.2 |
|
Gross profit |
|
|
1,345.6 |
|
|
|
832.7 |
|
|
|
512.9 |
|
|
|
61.6 |
|
Operating expenses |
|
|
1,277.0 |
|
|
|
809.3 |
|
|
|
467.7 |
|
|
|
57.8 |
|
Operating profit |
|
|
68.6 |
|
|
|
23.4 |
|
|
|
45.2 |
|
|
|
193.2 |
|
Other expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
45.9 |
|
|
|
37.1 |
|
|
|
8.8 |
|
|
|
23.7 |
|
Other, net |
|
|
(11.3 |
) |
|
|
(1.6 |
) |
|
|
(9.7 |
) |
|
|
606.3 |
|
Other expense, net |
|
|
34.6 |
|
|
|
35.5 |
|
|
|
(0.9 |
) |
|
|
(2.5 |
) |
Income (loss) before income taxes |
|
|
34.0 |
|
|
|
(12.1 |
) |
|
|
46.1 |
|
|
|
381.0 |
|
Income tax expense (benefit) |
|
|
10.6 |
|
|
|
(4.5 |
) |
|
|
15.1 |
|
|
|
335.6 |
|
Net income (loss) |
|
$ |
23.4 |
|
|
$ |
(7.6 |
) |
|
$ |
31.0 |
|
|
|
407.9 |
|
EBITDA |
|
$ |
204.0 |
|
|
$ |
105.8 |
|
|
$ |
98.2 |
|
|
|
92.8 |
|
Adjusted EBITDA |
|
$ |
237.9 |
|
|
$ |
121.2 |
|
|
$ |
116.7 |
|
|
|
96.3 |
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
153.3 |
|
|
|
132.3 |
|
|
|
21.0 |
|
|
|
15.9 |
|
Diluted |
|
|
154.9 |
|
|
|
132.3 |
|
|
|
22.6 |
|
|
|
17.1 |
|
Earnings (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.15 |
|
|
$ |
(0.06 |
) |
|
$ |
0.21 |
|
|
|
350.0 |
|
Diluted |
|
$ |
0.15 |
|
|
$ |
(0.06 |
) |
|
$ |
0.21 |
|
|
|
350.0 |
|
27
|
|
Nine Months Ended |
|
|||||||||||||
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
Net sales |
|
$ |
36,304.1 |
|
|
$ |
21,094.5 |
|
|
$ |
15,209.6 |
|
|
|
72.1 |
|
Cost of goods sold |
|
|
32,537.4 |
|
|
|
18,635.2 |
|
|
|
13,902.2 |
|
|
|
74.6 |
|
Gross profit |
|
|
3,766.7 |
|
|
|
2,459.3 |
|
|
|
1,307.4 |
|
|
|
53.2 |
|
Operating expenses |
|
|
3,592.1 |
|
|
|
2,339.2 |
|
|
|
1,252.9 |
|
|
|
53.6 |
|
Operating profit |
|
|
174.6 |
|
|
|
120.1 |
|
|
|
54.5 |
|
|
|
45.4 |
|
Other expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
135.1 |
|
|
|
114.0 |
|
|
|
21.1 |
|
|
|
18.5 |
|
Other, net |
|
|
(11.4 |
) |
|
|
(4.7 |
) |
|
|
(6.7 |
) |
|
|
142.6 |
|
Other expense, net |
|
|
123.7 |
|
|
|
109.3 |
|
|
|
14.4 |
|
|
|
13.2 |
|
Income before income taxes |
|
|
50.9 |
|
|
|
10.8 |
|
|
|
40.1 |
|
|
|
371.3 |
|
Income tax expense |
|
|
14.4 |
|
|
|
1.5 |
|
|
|
12.9 |
|
|
|
860.0 |
|
Net income |
|
$ |
36.5 |
|
|
$ |
9.3 |
|
|
$ |
27.2 |
|
|
|
292.5 |
|
EBITDA |
|
$ |
525.3 |
|
|
$ |
371.9 |
|
|
$ |
153.4 |
|
|
|
41.2 |
|
Adjusted EBITDA |
|
$ |
662.7 |
|
|
$ |
414.4 |
|
|
$ |
248.3 |
|
|
|
59.9 |
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
148.6 |
|
|
|
132.0 |
|
|
|
16.6 |
|
|
|
12.6 |
|
Diluted |
|
|
150.2 |
|
|
|
133.2 |
|
|
|
17.0 |
|
|
|
12.8 |
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.25 |
|
|
$ |
0.07 |
|
|
$ |
0.18 |
|
|
|
257.1 |
|
Diluted |
|
$ |
0.24 |
|
|
$ |
0.07 |
|
|
$ |
0.17 |
|
|
|
242.9 |
|
We believe that the most directly comparable GAAP measure to EBITDA and Adjusted EBITDA is net income. The following table reconciles EBITDA and Adjusted EBITDA to net income for the periods presented:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(In millions) |
|
|
(In millions) |
|
||||||||||
Net income (loss) |
|
$ |
23.4 |
|
|
$ |
(7.6 |
) |
|
$ |
36.5 |
|
|
$ |
9.3 |
|
Interest expense (1) |
|
|
45.9 |
|
|
|
37.1 |
|
|
|
135.1 |
|
|
|
114.0 |
|
Income tax expense (benefit) |
|
|
10.6 |
|
|
|
(4.5 |
) |
|
|
14.4 |
|
|
|
1.5 |
|
Depreciation |
|
|
75.8 |
|
|
|
50.7 |
|
|
|
203.2 |
|
|
|
158.4 |
|
Amortization of intangible assets |
|
|
48.3 |
|
|
|
30.1 |
|
|
|
136.1 |
|
|
|
88.7 |
|
EBITDA |
|
|
204.0 |
|
|
|
105.8 |
|
|
|
525.3 |
|
|
|
371.9 |
|
Non-cash items (2) |
|
|
32.9 |
|
|
|
13.0 |
|
|
|
93.6 |
|
|
|
31.1 |
|
Acquisition, integration and reorganization (3) |
|
|
9.7 |
|
|
|
3.6 |
|
|
|
47.0 |
|
|
|
13.0 |
|
Productivity initiatives and other adjustment items (4) |
|
|
(8.7 |
) |
|
|
(1.2 |
) |
|
|
(3.2 |
) |
|
|
(1.6 |
) |
Adjusted EBITDA |
|
$ |
237.9 |
|
|
$ |
121.2 |
|
|
$ |
662.7 |
|
|
$ |
414.4 |
|
28
Consolidated Results of Operations
Three and nine months ended April 2, 2022 compared to the three and nine months ended March 27, 2021
Net Sales
Net sales growth is a function of case growth, pricing (which is primarily based on product inflation/deflation), and a changing mix of customers, channels, and product categories sold. Net sales increased $5.9 billion, or 81.6%, for the third quarter of fiscal 2022 compared to the third quarter of fiscal 2021 and increased $15.2 billion, or 72.1%, for the first nine months of fiscal 2022 compared to the first nine months of fiscal 2021.
The increase in net sales was primarily attributable to the acquisition of Core-Mark on September 1, 2021, which contributed $4,149.6 million of net sales for the third quarter of fiscal 2022, and $9,948.9 million of net sales since the acquisition date. The increase in net sales was also driven by growth in cases sold due to the declining effects of the COVID-19 pandemic on the restaurant industry, and an increase in selling price per case as a result of inflation. Overall product cost inflation was approximately 13.6% for the third quarter of fiscal 2022 and 11.2% for the first nine months of fiscal 2022. Total case volume increased 35.3% and 34.0% in the third quarter and first nine months of fiscal 2022, respectively, compared to the same periods of fiscal 2021.Organic case volume increased 8.3% and 13.9% in the third quarter and first nine months of fiscal 2022, respectively, compared to the same periods of fiscal 2021.
Gross Profit
Gross profit increased $512.9 million, or 61.6%, for the third quarter of fiscal 2022 compared to the third quarter of fiscal 2021 and increased $1.3 billion, or 53.2%, for the first nine months of fiscal 2022 compared to the first nine months of fiscal 2021. The increase in gross profit was primarily driven by the acquisition of Core-Mark. The Core-Mark acquisition contributed gross profit of $243.1 million in the third quarter of fiscal 2022, and $577.4 million since the acquisition date, which includes $8.8 million of amortization of the step up in fair value of inventory acquired. Also, gross profit increased due to case growth in Foodservice and an increase in the gross profit per case driven by growth in the independent channel. Independent customers typically receive more services from us, cost more to serve, and pay a higher gross profit per case than other customers.
Operating Expenses
Operating expenses increased $467.7 million, or 57.8%, for the third quarter of fiscal 2022 compared to the third quarter of fiscal 2021 and increased $1.3 billion, or 53.6%, for the first nine months of fiscal 2022 compared to the first nine months of fiscal 2021. The increase in operating expenses for both the third quarter and first nine months of fiscal 2022 was primarily driven by the acquisition of Core-Mark. Core-Mark contributed $216.6 million of operating expenses in the third quarter of fiscal 2022 and $512.0 million of operating expenses since the acquisition date. Operating expenses also increased as a result of an increase in case volume and the resulting impact on variable operational and selling expenses, as well as an increase in personnel expenses. The increases in personnel expense includes increases of $16.0 million and $102.3 million in temporary contract labor costs, including travel expense associated with the contract workers, for the third quarter and first nine months of fiscal 2022, respectively, compared to the prior year periods, as a result of the current labor market’s impact on the Company’s ability to hire and retain qualified labor. Operating expenses also experienced increases in fuel expenses of $22.0 million and $56.1 million, due to higher fuel prices in the third quarter and first nine months of fiscal 2022 as compared to prior year periods, increases in workers compensation and automobile insurance expense of $6.3 million and $15.2 million, and increases in professional fees of $2.8 million and $23.7 million related to recent acquisition during the third quarter and first nine months of fiscal 2022, respectively, compared to the prior year periods.
Depreciation and amortization of intangible assets increased from $80.8 million in the third quarter of fiscal 2021 to $124.1 million in the third quarter of fiscal 2022. Depreciation and amortization of intangible assets increased from $247.1 million for the first nine months of fiscal 2021 to $339.3 million in the first nine months of fiscal 2022. Depreciation of fixed assets and amortization of intangible assets increased as a result of the Core-Mark acquisition and another recent acquisition, along with the accelerated amortization of certain customer relationships and trade names.
Net Income
Net income increased $31.0 million, or 407.9%, for the third quarter of fiscal 2022 compared to the third quarter of fiscal 2021. Net income increased $27.2 million, or 292.5%, for the first nine months of fiscal 2022 compared to the first nine months of fiscal 2021. The increase in net income was primarily attributable to the increase in operating profit and an increase in other income, partially offset by an increase in interest expense. The increase in other income primarily relates to realized and unrealized gains on fuel hedging instruments. The increase in interest expense was primarily the result of an increase in average borrowings outstanding during fiscal 2022, partially offset by a decrease in the average interest rate compared to the prior year periods.
The Company reported income tax expense of $10.6 million and $14.4 million for the third quarter and first nine months of fiscal 2022 , respectively, compared to income tax benefit of $(4.5) million and income tax expense of $1.5 million for the third quarter and first nine months of fiscal 2021, respectively. Our effective tax rates for the third quarter and first nine months of fiscal 2022 were 31.3% and 28.4%, respectively, compared to 37.1% and 14.2% for the third quarter and nine months of fiscal 2021, respectively. The effective tax rates for periods ended April 2, 2022 differed from the prior year periods due to the increase of state
29
taxes and non-deductible expense as a percentage of book income and the decrease in deductible discrete items related to stock-based compensation as a percentage of book income.
Segment Results
In the second quarter of fiscal 2022, the Company changed its operating segments to reflect the manner in which the business is managed. Based on the Company’s organization structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company now 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 EBITDA.
Corporate & All Other is comprised of unallocated 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. Beginning in the second quarter of fiscal 2022, this also includes the operating results from certain recent immaterial acquisitions.
The presentation and amounts for the three and nine months ended March 27, 2021 have been restated to reflect the segment changes described above.
The following tables set forth net sales and EBITDA by segment for the periods indicated (dollars in millions):
Net Sales
|
|
Three Months Ended |
|
|||||||||||||
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
Foodservice |
|
$ |
6,604.9 |
|
|
$ |
5,186.5 |
|
|
$ |
1,418.4 |
|
|
|
27.3 |
|
Vistar |
|
|
892.2 |
|
|
|
590.3 |
|
|
|
301.9 |
|
|
|
51.1 |
|
Convenience |
|
|
5,574.6 |
|
|
|
1,418.9 |
|
|
|
4,155.7 |
|
|
|
292.9 |
|
Corporate & All Other |
|
|
134.7 |
|
|
|
100.0 |
|
|
|
34.7 |
|
|
|
34.7 |
|
Intersegment Eliminations |
|
|
(127.4 |
) |
|
|
(93.2 |
) |
|
|
(34.2 |
) |
|
|
(36.7 |
) |
Total net sales |
|
$ |
13,079.0 |
|
|
$ |
7,202.5 |
|
|
$ |
5,876.5 |
|
|
|
81.6 |
|
|
|
Nine Months Ended |
|
|||||||||||||
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
Foodservice |
|
$ |
19,181.3 |
|
|
$ |
15,110.3 |
|
|
$ |
4,071.0 |
|
|
|
26.9 |
|
Vistar |
|
|
2,646.0 |
|
|
|
1,739.1 |
|
|
|
906.9 |
|
|
|
52.1 |
|
Convenience |
|
|
14,455.8 |
|
|
|
4,228.4 |
|
|
|
10,227.4 |
|
|
|
241.9 |
|
Corporate & All Other |
|
|
376.7 |
|
|
|
299.1 |
|
|
|
77.6 |
|
|
|
25.9 |
|
Intersegment Eliminations |
|
|
(355.7 |
) |
|
|
(282.4 |
) |
|
|
(73.3 |
) |
|
|
(26.0 |
) |
Total net sales |
|
$ |
36,304.1 |
|
|
$ |
21,094.5 |
|
|
$ |
15,209.6 |
|
|
|
72.1 |
|
EBITDA
|
|
Three Months Ended |
|
|||||||||||||
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
Foodservice |
|
$ |
169.6 |
|
|
$ |
138.3 |
|
|
$ |
31.3 |
|
|
|
22.6 |
|
Vistar |
|
|
48.0 |
|
|
|
14.9 |
|
|
|
33.1 |
|
|
|
222.1 |
|
Convenience |
|
|
42.7 |
|
|
|
2.0 |
|
|
|
40.7 |
|
|
|
2,035.0 |
|
Corporate & All Other |
|
|
(56.3 |
) |
|
|
(49.4 |
) |
|
|
(6.9 |
) |
|
|
(14.0 |
) |
Total EBITDA |
|
$ |
204.0 |
|
|
$ |
105.8 |
|
|
$ |
98.2 |
|
|
|
92.8 |
|
|
|
Nine Months Ended |
|
|||||||||||||
|
|
|
|
|
|
Change |
|
|
% |
|
||||||
Foodservice |
|
$ |
487.5 |
|
|
$ |
449.8 |
|
|
$ |
37.7 |
|
|
|
8.4 |
|
Vistar |
|
|
126.9 |
|
|
|
42.0 |
|
|
|
84.9 |
|
|
|
202.1 |
|
Convenience |
|
|
119.4 |
|
|
|
25.0 |
|
|
|
94.4 |
|
|
|
377.6 |
|
Corporate & All Other |
|
|
(208.5 |
) |
|
|
(144.9 |
) |
|
|
(63.6 |
) |
|
|
(43.9 |
) |
Total EBITDA |
|
$ |
525.3 |
|
|
$ |
371.9 |
|
|
$ |
153.4 |
|
|
|
41.2 |
|
30
Segment Results—Foodservice
Three and nine months ended April 2, 2022, compared to the three and nine months ended March 27, 2021
Net Sales
Net sales for Foodservice increased $1.4 billion, or 27.3%, from the third quarter of fiscal 2021 to the third quarter of fiscal 2022 and increased $4.1 billion, or 26.9%, from the first nine months of fiscal 2021 to the first nine months of fiscal 2022. This increase in net sales was driven by growth in cases sold due to the declining effects of the COVID-19 pandemic on the restaurant industry, an increase in selling price per case as a result of inflation, and a recent acquisition. Overall product cost inflation was approximately 19.2% for the third quarter of fiscal 2022 and 15.8% for the first nine months of fiscal 2022, compared to the prior year periods, which was driven primarily by price increases for disposable items and center-of-the plate items such as meat, poultry, and seafood. Securing new and expanding business with independent customers resulted in organic independent case growth of approximately 13.7% in the third quarter of fiscal 2022 and approximately 18.5% in the first nine months of fiscal 2022, compared to the prior year periods. For the quarter, independent sales as a percentage of total Foodservice segment sales were 37.6%.
EBITDA
EBITDA for Foodservice increased $31.3 million, or 22.6%, from the third quarter of fiscal 2021 to the third quarter of fiscal 2022 and increased $37.7 million, or 8.4%, from the first nine months of fiscal 2021 to the first nine months of fiscal 2022. These increases were the result of an increase in gross profit, partially offset by an increase in operating expenses excluding depreciation and amortization. Gross profit increased 27.3% in the third quarter of fiscal 2022 and 24.9% in the first nine months of fiscal 2022, compared to the prior year periods, driven by an increase in the gross profit per case, as well as an increase in cases sold. The increase in gross profit per case was driven by a favorable shift in the mix of cases sold to independent customers, including more Performance Brands products sold to our independent customers. Cases sold to independent businesses result in higher gross margins within this segment.
Operating expenses, excluding depreciation and amortization, for Foodservice increased by $151.5 million, or 28.5%, from the third quarter of fiscal 2021 to the third quarter of fiscal 2022 and increased by $453.8 million, or 29.8%, from the first nine months of fiscal 2021 to the first nine months of fiscal 2022. Operating expenses increased primarily as a result of an increase in case volume and the resulting impact on variable operational and selling expenses, as well as increases in personnel expense. The increases in personnel expense includes $15.0 million and $94.1 million increases in temporary contract labor costs, including travel expense associated with the contract workers, for the third quarter and first nine months of fiscal 2022, respectively, compared to the prior year periods as a result of the current labor market’s impact on the Company’s ability to hire and retain qualified labor. Operating expenses also experienced increases in fuel expenses of $15.5 million and $38.2 million primarily as a result of an increase in fuel prices compared to the prior year periods. Additionally, workers compensation and automobile insurance expense increased $2.8 million and $7.4 million during the third quarter and first nine months of fiscal 2022, respectively, compared to the prior year periods.
Depreciation and amortization of intangible assets recorded in this segment increased from $57.9 million in the third quarter of fiscal 2021 to $67.3 million in the third quarter of fiscal 2022 and increased from $182.4 million in the first nine months of fiscal 2021 to $192.3 million in the first nine months of fiscal 2022. Depreciation of fixed assets and amortization of intangible assets increased during the third quarter and first nine months of fiscal 2022 as a result of a recent acquisition and capital outlays for transportation equipment.
Segment Results—Vistar
Three and nine months ended April 2, 2022, compared to the three and nine months ended March 27, 2021
Net Sales
Net sales for Vistar increased $301.9 million, or 51.1%, from the third quarter of fiscal 2021 to the third quarter of fiscal 2022 and increased $906.9 million, or 52.1%, from the first nine months of fiscal 2021 to the first nine months of fiscal 2022. The increases in net sales were driven primarily by the declining effects of the COVID-19 pandemic. All channels, including those significantly impacted by the COVID-19 pandemic, such as vending, theater, office coffee service, hospitality, and travel, experienced case volume growth in the third quarter and first nine months of fiscal 2022 compared to the prior year period.
EBITDA
EBITDA for Vistar increased $33.1 million, or 222.1%, from the third quarter of fiscal 2021 to the third quarter of fiscal 2022 and increased $84.9 million, or 202.1%, from the first nine months of fiscal 2021 to the first nine months of fiscal 2022. The increases were the result of increases in gross profit, partially offset by increases in operating expenses excluding depreciation and amortization. Gross profit increased $58.1 million, or 61.0%, for the third quarter fiscal 2022 and $156.6 million, or 55.3%, for the first nine months
31
of fiscal 2022 compared to the respective prior year periods. Additionally, for the third quarter and first nine months of fiscal 2022, Vistar experienced an increase in procurement gains, as well as a favorable shift in the channel mix that impacted the segment.
Operating expenses, excluding depreciation and amortization, increased $24.9 million, or 31.0%, for the third quarter of fiscal 2022 and $71.7 million, or 29.7%, for the first nine months of fiscal 2022 compared to the prior year periods. Operating expenses increased primarily as a result of increased sales volume described above, and the resulting impact on variable operational and selling expenses. Operating expenses also increased as a result of increases in personnel expense and fuel expense.
Depreciation and amortization of intangible assets recorded in this segment increased from $12.5 million in the third quarter of fiscal 2021 to $13.3 million in the third quarter of fiscal 2022 and increased from $33.8 million in the first nine months of fiscal 2021 to $39.5 million in the first nine months of fiscal 2022. These increases were the result of the accelerated amortization of certain trade names and recent capital outlays for transportation equipment, warehouse expansion, and information technology.
Segment Results—Convenience
Three and nine months ended April 2, 2022, compared to the three and nine months ended March 27, 2021
Net Sales
Net sales for Convenience increased $4.2 billion, or 292.9%, from $1.4 billion for the third quarter of fiscal 2021 to $5.6 billion for the third quarter of fiscal 2022. Net sales for Convenience increased $10.2 billion, or 241.9%, from $4.2 billion for the first nine months of fiscal 2021 to $14.5 billion for the first nine months of fiscal 2022. Net sales related to cigarettes for the third quarter of fiscal 2022 was $3,522.2 million, which includes $981.6 million of excise taxes, compared to net sales of cigarettes of $1,003.8 million, which includes $276.9 million of excise taxes, for the third quarter of fiscal 2021. Net sales related to cigarettes for the first nine months of fiscal 2022 was $9,361.0 million, which includes $2,627.1 million of excise taxes, compared to net sales of cigarettes of $3,039.0 million, which includes $863.6 million of excise taxes, for the first nine months of fiscal 2021.
The increase in net sales for Convenience was driven primarily by the Core-Mark acquisition. The Core-Mark acquisition contributed $4,149.6 million of net sales for the third quarter of fiscal 2022, which includes $725.7 million related to tobacco excise taxes, and $9,948.9 million of net sales since the acquisition date, which includes $1,795.1 million related to tobacco excise taxes.
EBITDA
EBITDA for Convenience increased $40.7 million, or 2,035.0%, from the third quarter of fiscal 2021 to the third quarter of fiscal 2022 and increased $94.4 million, or 377.6%, from the first nine months of fiscal 2021 to the first nine months of fiscal 2022. These increases were a result of an increase in gross profit, partially offset by an increase in operating expenses excluding depreciation and amortization driven by the acquisition of Core-Mark. Gross profit increased $269.4 million, or 436.9%, for the third quarter fiscal 2022 and $651.2 million, or 348.7%, for the first nine months of fiscal 2022 compared to the respective prior year periods. Core-Mark contributed gross profit of $243.1 million in the third quarter of fiscal 2022, and $577.4 million since the acquisition date, which includes $8.8 million of amortization of the step up in fair value of inventory acquired. Gross profit as a percentage of net sales increased from 4.3% for the third quarter of fiscal 2021 to 5.9% for the third quarter of fiscal 2022 and from 4.4% for the first nine months of fiscal 2021 to 5.8% the first nine months of fiscal 2022 as a result of the Core-Mark acquisition.
Operating expenses, excluding depreciation and amortization, increased $229.3 million, or 384.9%, for the third quarter of fiscal 2022 and increased $557.4 million, or 344.6%, for the first nine months of fiscal 2022 compared to the prior year periods. Operating expenses increased primarily as a result of the acquisition of Core-Mark, which contributed an additional $214.0 million of operating expenses in the third quarter of fiscal 2022 and an additional $504.5 million of operating expenses since the acquisition date. Operating expenses also experienced increases in personnel expense, fuel expense and reserves related to expected credit losses in the third quarter and first nine months of fiscal 2022 as compared to prior year periods.
Depreciation and amortization of intangible assets recorded in this segment increased from $3.6 million in the third quarter of fiscal 2021 to $37.3 million in the third quarter of fiscal 2022 and increased from $7.8 million in the first nine months of fiscal 2021 to $89.0 million in the first nine months of fiscal 2022. Depreciation of fixed assets and amortization of intangible assets increased as a result of the Core-Mark acquisition. Total depreciation and amortization related to the acquisition of Core-Mark was $33.5 million and $77.6 million in the third quarter and the period since the acquisition date, respectively. The remaining increase was the result of recent capital outlays for transportation and warehouse equipment and information technology.
32
Segment Results—Corporate & All Other
Three and nine months ended April 2, 2022, compared to the three and nine months ended March 27, 2021
Net Sales
Net sales for Corporate & All Other increased $34.7 million from the third quarter of fiscal 2021 to the third quarter of fiscal 2022 and increased $77.6 million from the first nine months of fiscal 2021 to the first nine months of fiscal 2022. The increases were primarily attributable to an increase in logistics services provided to our other segments for increased case volume.
EBITDA
EBITDA for Corporate & All Other was a negative $56.3 million for the third quarter of fiscal 2022 compared to a negative $49.4 million for the third quarter of fiscal 2021 and was a negative $208.5 million for the first nine months of fiscal 2022 compared to a negative $144.9 million for the first nine months of fiscal 2021. The decline in EBITDA was primarily driven by increases in personnel expense, increases in stock-based compensation expense of $3.7 million and $15.7 million, and increases in professional fees of $2.3 million and $24.1 million related to recent acquisitions for the third quarter of fiscal 2022 and first nine months of fiscal 2022, respectively, as compared to the respective prior year periods.
Depreciation and amortization of intangible assets recorded in this segment decreased from $6.8 million in the third quarter of fiscal 2021 to $6.2 million in the third quarter of fiscal 2022 and decreased from $23.1 million in the first nine months of fiscal 2021 to $18.5 million in the first nine months of fiscal 2022 as a result of accelerated depreciation for abandoned information technology projects in the prior year.
Liquidity and Capital Resources
We have historically financed our operations and growth primarily with cash flows from operations, borrowings under our credit facility, operating and finance leases, and normal trade credit terms. We have typically funded our acquisitions with additional borrowings under our credit facility. Our working capital and borrowing levels are subject to seasonal fluctuations, typically with the lowest borrowing levels in the third and fourth fiscal quarters and the highest borrowing levels occurring in the first and second fiscal quarters. We borrow under our credit facility or pay it down regularly based on our cash flows from operating and investing activities. Our practice is to minimize interest expense while maintaining reasonable liquidity.
As market conditions warrant, we may from time to time seek to repurchase our securities or loans in privately negotiated or open market transactions, by tender offer or otherwise. Any such repurchases may be funded by incurring new debt, including additional borrowings under our credit facility. In addition, depending on conditions in the credit and capital markets and other factors, we will, from time to time, consider other financing transactions, the proceeds of which could be used to refinance our indebtedness, make investments or acquisitions or for other purposes. Any new debt may be secured debt.
Our cash requirements over the next 12 months and beyond relate to our long-term debt and associated interest payments, operating and finance leases, and purchase obligations. For information regarding the Company’s expected cash requirements related to long-term debt and operating and finance leases, see Note 6. Debt and Note 7. Leases, respectively, of the consolidated financial statements. As of April 2, 2022, the Company had total purchase obligations of $168.8 million, which includes agreements for purchases related to capital projects and services in the normal course of business, for which all significant terms have been confirmed, as well as a minimum amount due for various Company meetings and conferences. Purchase obligations also include amounts committed to various capital projects in process or scheduled to be completed in the coming fiscal years. As of April 2, 2022, the Company had commitments of $108.5 million for capital projects related to warehouse expansion and improvements and warehouse equipment. The Company anticipates using cash flows from operations or borrowings under the ABL Facility to fulfill these commitments. Amounts due under these agreements were not included in the Company’s consolidated balance sheet as of April 2, 2022.
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
We believe that our cash flows from operations and available borrowing capacity will be sufficient both to meet our anticipated cash requirements over at least the next 12 months and to maintain sufficient liquidity for normal operating purposes and to fund capital expenditures.
As of April 2, 2022, our cash balance totaled $20.8 million, including restricted cash of $7.1 million, as compared to a cash balance totaling $22.2 million, including restricted cash of $11.1 million, as of July 3, 2021.
33
Nine months ended April 2, 2022 compared to the nine months ended March 27, 2021
Operating Activities
During the first nine months of fiscal 2022 and fiscal 2021, our operating activities provided cash flow of $390.6 million and $173.1 million, respectively. The increase in cash flow provided by operating activities in the first nine months of fiscal 2022 compared to the first nine months of fiscal 2021 was largely driven by improvements in working capital and the prior year payment of $117.3 million of contingent consideration related to the acquisition of Eby-Brown.
Investing Activities
Cash used in investing activities totaled $1,788.2 million in the first nine months of fiscal 2022 compared to $130.4 million in the first nine months of fiscal 2021. These investments consisted primarily of cash paid for recent acquisitions of $1,651.1 million in the first nine months of fiscal 2022 compared to $18.1 million of payments for two acquisitions in the first nine months of fiscal 2021, along with capital purchases of property, plant, and equipment of $140.8 million and $118.9 million for the first nine months of fiscal 2022 and the first nine months of fiscal 2021, respectively. For the first nine months of fiscal 2022, purchases of property, plant, and equipment primarily consisted of outlays for information technology, warehouse equipment, warehouse expansions and improvements, and transportation equipment. The following table presents the capital purchases of property, plant, and equipment by segment. Capital expenditures for the nine months ended March 27, 2021 have been restated to reflect the segment changes discussed above.
|
|
Nine Months Ended |
|
|||||
(Dollars in millions) |
|
|
|
|
||||
Foodservice |
|
$ |
95.9 |
|
|
$ |
49.9 |
|
Vistar |
|
|
14.4 |
|
|
|
41.3 |
|
Convenience |
|
|
20.3 |
|
|
|
21.5 |
|
Corporate & All Other |
|
|
10.2 |
|
|
|
6.2 |
|
Total capital purchases of property, plant and equipment |
|
$ |
140.8 |
|
|
$ |
118.9 |
|
Financing Activities
During the first nine months of fiscal 2022, our financing activities provided cash flow of $1,396.2 million, which consisted primarily of $1.0 billion in cash received from the issuance and sale of the Notes due 2029 and $835.7 million in net borrowings under our Prior Credit Agreement and ABL facility, partially offset by $350.0 million in cash used for the repayment of the Notes due 2024.
During the first nine months of fiscal 2021, our financing activities used cash flow of $361.9 million, which consisted primarily of $103.8 million in net payments under our ABL facility, $136.4 million in payments related to recent acquisitions, and $110.0 million repayment of a 364-day maturity loan that was junior to the other obligations owed under the Prior Credit Agreement.
The following describes our financing arrangements as of April 2, 2022:
Credit Facility: PFGC, a wholly-owned subsidiary of the Company, was a party to the Prior Credit Agreement. The Prior Credit Agreement had an aggregate principal amount of $3.0 billion under the revolving loan facility and was scheduled to mature on December 20, 2024.
On September 17, 2021, PFGC and Performance Food Group, Inc. entered into the ABL Facility with Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent, and the other lenders party thereto, which amended the Prior Credit Agreement. The ABL Facility, among other things, (i) increases the aggregate principal amount available under the revolving loan facility from $3.0 billion under the Prior Credit Agreement to $4.0 billion under the ABL Facility, (ii) extends the stated maturity date from December 30, 2024 under the Prior Credit Agreement to September 17, 2026 under the ABL Facility, and (iii) includes an alternative reference rate, which provides mechanisms for the use of the Secured Overnight Financing Rate as a replacement rate upon a LIBOR cessation event.
Performance Food Group, Inc., a wholly-owned subsidiary of PFGC, is the lead borrower under the ABL Facility, which is jointly and severally guaranteed by, and secured by the majority of the assets of, PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). Availability for loans and letters of credit under the ABL Facility is governed by a borrowing base, determined by the application of specified advance rates against eligible assets, including trade accounts receivable, inventory, owned real properties, and owned transportation equipment. The borrowing base is reduced quarterly by a cumulative fraction of the real properties and transportation equipment values. Advances on accounts receivable and inventory are subject to change based on periodic commercial finance examinations and appraisals, and the
34
real property and transportation equipment values included in the borrowing base are subject to change based on periodic appraisals. Audits and appraisals are conducted at the direction of the administrative agent for the benefit and on behalf of all lenders.
Borrowings under the ABL Facility bear interest, at Performance Food Group, Inc.’s option, at (a) the Base Rate (defined as the greater of (i) the Federal Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus 1.0%) plus a spread, or (b) LIBOR plus a spread. The ABL Facility also provides for an unused commitment fee rate of 0.25% per annum.
The following table summarizes outstanding borrowings, availability, and the average interest rate under the Company's credit agreements:
(Dollars in millions) |
|
As of April 2, 2022 |
|
|
As of July 3, 2021 |
|
||
Aggregate borrowings |
|
$ |
1,422.0 |
|
|
$ |
586.3 |
|
Letters of credit under ABL Facility |
|
|
203.7 |
|
|
|
161.7 |
|
Excess availability, net of lenders’ reserves of $101.9 and $55.1 |
|
|
2,374.3 |
|
|
|
2,252.0 |
|
Average interest rate |
|
|
2.09 |
% |
|
|
2.32 |
% |
The ABL Facility contains covenants requiring the maintenance of a minimum consolidated fixed charge coverage ratio if excess availability falls below the greater of (i) $320.0 million and (ii) 10% of the lesser of the borrowing base and the revolving credit facility amount for five consecutive business days. The ABL Facility also contains customary restrictive covenants that include, but are not limited to, restrictions on PFGC’s and certain of its subsidiary's ability to incur additional indebtedness, pay dividends, create liens, make investments or specified payments, and dispose of assets. The ABL Facility provides for customary events of default, including payment defaults and cross-defaults on other material indebtedness. If an event of default occurs and is continuing, amounts due under such agreement may be accelerated and the rights and remedies of the lenders under the ABL Facility may be exercised, including rights with respect to the collateral securing the obligations under such agreement.
Senior Notes due 2027: On September 27, 2019, PFG Escrow Corporation (which merged with and into Performance Food Group, Inc.) issued and sold $1,060.0 million aggregate principal amount of the Noted due 2027. The Notes due 2027 are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes due 2027 are not guaranteed by Performance Food Group Company.
The proceeds from the Notes due 2027, along with an offering of shares of the Company’s common stock and borrowings under the Prior Credit Agreement, were used to fund the cash consideration for the acquisition of Reinhart Foodservice, L.L.C. and to pay related fees and expenses.
The Notes due 2027 were issued at 100.0% of their par value. The Notes due 2027 mature on October 15, 2027 and bear interest at a rate of 5.500% per year, payable semi-annually in arrears.
Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2027 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2027 at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. may redeem all or a part of the Notes due 2027 at any time prior to October 15, 2022 at a redemption price equal to 100% of the principal amount of the Notes due 2027 being redeemed plus a make-whole premium and accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, beginning on October 15, 2022, Performance Food Group, Inc. may redeem all or a part of the Notes due 2027 at a redemption price equal to 102.750% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 101.375% and 100% of the principal amount redeemed on October 15, 2023 and October 15, 2024, respectively. In addition, at any time prior to October 15, 2022, Performance Food Group, Inc. may redeem up to 40% of the Notes due 2027 from the proceeds of certain equity offerings at a redemption price equal to 105.500% of the principal amount thereof, plus accrued and unpaid interest.
The indenture governing the Notes due 2027 contains covenants limiting, among other things, PFGC and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications.
35
The Notes due 2027 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2027 to become or be declared due and payable.
Senior Notes due 2025: On April 24, 2020, Performance Food Group, Inc. issued and sold $275.0 million aggregate principal amount of the Notes due 2025, pursuant to an indenture dated as of April 24, 2020. The Notes due 2025 are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes due 2025 are not guaranteed by Performance Food Group Company.
The proceeds from the Notes due 2025 were used for working capital and general corporate purposes and to pay the fees, expenses, and other transaction costs incurred in connection with the Notes due 2025.
The Notes due 2025 were issued at 100.0% of their par value. The Notes due 2025 mature on May 1, 2025 and bear interest at a rate of 6.875% per year, payable semi-annually in arrears.
Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2025 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2025 at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. may redeem all or a part of the Notes due 2025 at any time prior to May 1, 2022 at a redemption price equal to 100% of the principal amount of the Notes due 2025 being redeemed plus a make-whole premium and accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, beginning on May 1, 2022, Performance Food Group, Inc. may redeem all or a part of the Notes due 2025 at a redemption price equal to 103.438% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 101.719% and 100% of the principal amount redeemed on May 1, 2023 and May 1, 2024, respectively. In addition, at any time prior to May 1, 2022, Performance Food Group, Inc. may redeem up to 40% of the Notes due 2025 from the proceeds of certain equity offerings at a redemption price equal to 106.875% of the principal amount thereof, plus accrued and unpaid interest.
The indenture governing the Notes due 2025 contains covenants limiting, among other things, PFGC’s and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes due 2025 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2025 to become or be declared due and payable.
Senior Notes due 2029: On July 26, 2021, Performance Food Group, Inc. issued and sold $1.0 billion aggregate principal amount of its Notes due 2029, pursuant to an indenture dated as of July 26, 2021. The Notes due 2029 are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes due 2029 are not guaranteed by Performance Food Group Company.
The proceeds from the Notes due 2029 were used to pay down the outstanding balance of the Prior Credit Agreement, to redeem the Senior Notes due 2024, and to pay the fees, expenses, and other transaction costs incurred in connection with the Notes due 2029.
The Notes due 2029 were issued at 100.0% of their par value. The Notes due 2029 mature on August 1, 2029 and bear interest at a rate of 4.250% per year, payable semi-annually in arrears.
Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2029 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2029 at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. may redeem all or a part of the Notes due 2029 at any time prior to August 1, 2024 at a redemption price equal to 100% of the principal amount of the Notes due 2029 being redeemed plus a make-whole premium and accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, beginning on August 1, 2024, Performance Food Group, Inc. may redeem all or a part of the Notes due 2029 at a redemption price equal to 102.125% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 101.163% and 100% of the principal amount redeemed on August 1, 2025 and August 1, 2026, respectively. In addition, at any time prior to August 1, 2024, Performance Food Group, Inc. may redeem up to 40% of the Notes due
36
2029 from the proceeds of certain equity offerings at a redemption price equal to 104.250% of the principal amount thereof, plus accrued and unpaid interest.
The indenture governing the Notes due 2029 contains covenants limiting, among other things, PFGC’s and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes due 2029 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2029 to become or be declared due and payable.
As of April 2, 2022, the Company was in compliance with all of the covenants under the ABL Facility and the indentures governing the Notes due 2025, the Notes due 2027 and the Notes due 2029.
Total Assets by Segment
Total assets by segment discussed below exclude intercompany receivables between segments and amounts in prior periods have been restated to reflect the changes to our reportable segments that occurred in the second quarter of fiscal 2022.
Total assets for Foodservice increased $876.8 million from $5,488.7 million as of March 27, 2021 to $6,365.5 million as of April 2, 2022. Total assets for Foodservice increased $573.8 million from $5,791.7 million as of July 3, 2021 to $6,365.5 million as of April 2, 2022. During both time periods, this segment increased its inventory, accounts receivable, property, plant and equipment, and goodwill, primarily due to a recent acquisition partially offset by decreases in intangible assets and operating lease right-of-use assets.
Total assets for Vistar increased $156.9 million from $929.8 million as of March 27, 2021 to $1,086.7 million as of April 2, 2022. Total assets for Vistar increased $37.0 million from $1,049.7 million as of July 3, 2021 to $1,086.7 million as of April 2, 2022. During both time periods, this segment increased its accounts receivable, inventory, and property, plant and equipment, partially offset by a decrease in intangible assets and operating lease right-of-use assets.
Total assets for Convenience increased $3,539.9 million from $637.3 million as of March 27, 2021 to $4,177.2 million as of April 2, 2022. Total assets for Convenience increased $3,495.3 million from $681.9 million as of July 3, 2021 to $4,177.2 million as of April 2, 2022. During both time periods, the segment increased its inventory, goodwill, intangible assets, accounts receivable, property, plant and equipment, operating lease right-of-use assets, prepaid expenses, and other assets as a result of the Core-Mark acquisition.
Critical Accounting Policies and Estimates
Critical accounting policies and estimates are those that are most important to portraying our financial position and results of operations. These policies require our most subjective or complex judgments, often employing the use of estimates about the effect of matters that are inherently uncertain. Our most critical accounting policies and estimates include those that pertain to the allowance for doubtful accounts receivable, inventory valuation, insurance programs, income taxes, vendor rebates and promotional incentives, leases, and goodwill and other intangible assets, which are described in the Form 10-K. There have been no material changes to our critical accounting policies and estimates as compared to our critical accounting policies and estimates described in the Form 10-K.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Our market risks consist of interest rate risk and fuel price risk. There have been no material changes to our market risks since July 3, 2021. For a discussion on our exposure to market risk, see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risks” in the Form 10-K.
37
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Regulations under the Exchange Act require public companies, including us, to maintain “disclosure controls and procedures,” which are defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required or necessary disclosures. In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’s management, including its principal executive officer and principal financial officer, of the effectiveness of its disclosure controls and procedures. Based on that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Form 10-Q, were effective to accomplish their objectives at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as that term is defined in Rule 13a-15(f) under the Exchange Act), that occurred during the fiscal quarter ended April 2, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
38
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are subject to various allegations, claims, and legal actions arising in the ordinary course of business. While it is impossible to determine with certainty the ultimate outcome of any of these proceedings, lawsuits, and claims, management believes that adequate provisions have been made or insurance secured for all currently pending proceedings so that the ultimate outcomes will not have a material adverse effect on our financial position. Refer to Note 10. Commitments and Contingencies within Part I, Item 1. Financial Statements for disclosure of ongoing litigation.
Item 1A. Risk Factors
There have been no material changes to our principal risks that we believe are material to our business, results of operations, and financial condition from the risk factors previously disclosed in the Form 10-K, which is accessible on the SEC’s website at www.sec.gov.
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information relating to our purchases of the Company’s common stock during the third quarter of fiscal 2022.
Period |
|
Total Number |
|
|
Average Price |
|
|
Total Number of |
|
|
Maximum Dollar Value |
|
||||
|
|
2,034 |
|
|
$ |
41.24 |
|
|
|
— |
|
|
$ |
235.7 |
|
|
|
|
33,521 |
|
|
$ |
43.58 |
|
|
|
— |
|
|
$ |
235.7 |
|
|
|
|
643 |
|
|
$ |
48.18 |
|
|
|
— |
|
|
$ |
235.7 |
|
|
Total |
|
|
36,198 |
|
|
$ |
43.53 |
|
|
|
— |
|
|
|
|
|
Item 3: Defaults Upon Senior Securities
None
Item 4: Mine Safety Disclosures
Not applicable
Item 5: Other Information
None
39
Item 6: Exhibits
Exhibit |
|
Description |
|
|
|
10.1 |
||
|
|
|
31.1 |
|
CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
31.2 |
|
CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.1 |
|
CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.2 |
|
CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
101.INS |
|
Inline XBRL Instance Document |
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
|
|
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
40
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE FOOD GROUP COMPANY (Registrant) |
||
|
|
|
|
|||
Dated: May 11, 2022 |
|
|
|
By: |
|
/s/ James D. Hope |
|
|
|
|
Name: |
|
|
|
|
|
|
Title: |
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Authorized Signatory) |
41
| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 8/1/29 | ||||
| 10/15/27 | ||||
| 9/17/26 | ||||
| 8/1/26 | ||||
| 8/1/25 | ||||
| 5/1/25 | ||||
| 12/30/24 | ||||
| 12/20/24 | ||||
| 10/15/24 | ||||
| 8/1/24 | ||||
| 5/1/24 | ||||
| 10/15/23 | ||||
| 5/1/23 | ||||
| 12/15/22 | ||||
| 10/15/22 | ||||
| 6/21/22 | ||||
| Filed on: | 5/11/22 | 8-K | ||
| 5/4/22 | ||||
| 5/1/22 | ||||
| For Period end: | 4/2/22 | |||
| 2/27/22 | ||||
| 2/26/22 | ||||
| 1/30/22 | ||||
| 1/29/22 | ||||
| 1/2/22 | ||||
| 1/1/22 | 10-Q, 4 | |||
| 12/15/21 | ||||
| 9/17/21 | 8-K | |||
| 9/10/21 | 4 | |||
| 9/1/21 | 3, 8-K, 8-K/A, S-8 | |||
| 8/31/21 | ||||
| 7/27/21 | ||||
| 7/26/21 | 8-K | |||
| 7/3/21 | 10-K | |||
| 3/27/21 | 10-Q | |||
| 3/8/21 | ||||
| 12/26/20 | 10-Q | |||
| 12/15/20 | ||||
| 10/23/20 | ||||
| 9/3/20 | ||||
| 6/29/20 | ||||
| 6/28/20 | ||||
| 6/27/20 | 10-K | |||
| 5/29/20 | ||||
| 5/15/20 | ||||
| 4/29/20 | 8-K | |||
| 4/24/20 | 8-K | |||
| 3/23/20 | ||||
| 3/11/20 | ||||
| 3/10/20 | ||||
| 9/27/19 | 8-K | |||
| 11/13/18 | 4, 4/A, 8-K, DEF 14A, PRE 14A | |||
| 5/17/16 | 8-K, S-1/A | |||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 8/16/23 Performance Food Group Co. 10-K 7/01/23 116:21M Donnelley … Solutions/FA 8/19/22 Performance Food Group Co. 10-K 7/02/22 112:21M Donnelley … Solutions/FA |