Acquisition and Investments - The company entered into a definitive Stock Purchase Agreement to acquire Cheney Bros., Inc. for a transaction valued at $2.1 billion, subject to customary conditions and regulatory approvals[10]. - The Company paid $307.7 million for two acquisitions in fiscal year 2024, compared to $63.8 million for one acquisition in fiscal year 2023[256]. - The Company is in the process of acquiring Cheney Bros., Inc. for $2.1 billion, expected to be financed through borrowing and new senior unsecured notes[256]. - The total purchase price allocation for the two acquisitions in fiscal 2024 includes $22.5 million in net working capital and $116.4 million in goodwill[257]. - The Core-Mark acquisition, valued at $2.4 billion, resulted in net sales of $14.5 billion and a net loss of $17.6 million for the fiscal year ended July 2, 2022[261]. Financial Performance - Net sales for the fiscal year ended June 29, 2024, were $58,281.2 million, an increase of 1.8% from $57,254.7 million in the previous fiscal year[206]. - Gross profit for the fiscal year ended June 29, 2024, was $6,577.1 million, up from $6,254.9 million, reflecting a gross margin increase[206]. - Operating profit increased to $826.4 million for the fiscal year ended June 29, 2024, compared to $765.8 million in the prior year, indicating a growth of 7.9%[206]. - Net income for the fiscal year ended June 29, 2024, was $435.9 million, representing a 9.7% increase from $397.2 million in the previous year[207]. - Total assets as of June 29, 2024, were $13,392.9 million, up from $12,499.0 million as of July 1, 2023, showing a growth of 7.1%[205]. - Total liabilities increased to $9,266.0 million as of June 29, 2024, compared to $8,753.5 million in the prior year, reflecting a rise of 5.9%[205]. - Retained earnings rose significantly to $1,302.9 million as of June 29, 2024, compared to $867.0 million in the previous year, marking an increase of 50.2%[205]. - The company reported a diluted earnings per share of $2.79 for the fiscal year ended June 29, 2024, compared to $2.54 in the previous year, an increase of 9.8%[206]. - Cash increased to $20.0 million as of June 29, 2024, from $12.7 million as of July 1, 2023, indicating a growth of 57.5%[205]. - Cash provided by operating activities reached $1,163.0 million, significantly up from $832.1 million in the prior year[212]. Segment Performance - The Foodservice segment operates 78 distribution centers and serves over 175,000 customer locations, focusing on increasing sales to independent customers who typically generate higher gross profit per case[12][13]. - Vistar, a national distributor, serves over 75,000 customer locations from 27 distribution centers, expanding its reach to various channels including hospitality venues and college bookstores[14][15]. - The Convenience segment serves approximately 50,000 customer locations in the U.S. and Canada, operating 39 distribution centers and offering a full range of products including food, beverages, and health and beauty care products[16]. - Net external sales for the Foodservice segment reached $29,002.4 million for the year ended June 29, 2024, an increase from $28,467.5 million in the previous year[331]. - Foodservice Adjusted EBITDA for the fiscal year ended June 29, 2024, was $1,001.2 million, up from $943.6 million in the previous year, representing a growth of 6.5%[333]. - Vistar Adjusted EBITDA increased to $340.6 million for the fiscal year ended June 29, 2024, compared to $325.3 million in the prior year, reflecting a growth of 4.3%[333]. Regulatory and Compliance - The company’s operations are subject to various regulations, including those from the USDA and FDA, which impose standards for product quality and sanitation[30]. - The company is subject to various federal, state, and local laws, including those related to environmental, health, and safety requirements, which may incur material costs for compliance[34]. - The company’s customer relationships with U.S. federal and state governmental entities subject it to additional regulations applicable to government contractors[32]. Risk Management - The company manages economic risks primarily through the management of its debt funding and the use of derivative financial instruments[280]. - The entire change in the fair value of derivatives designated as cash flow hedges is recorded in other comprehensive income and reclassified into earnings when the hedged transaction occurs[281]. - As of June 29, 2024, Performance Food Group, Inc. had three interest rate swaps with a combined notional amount of $500.0 million[282]. - A hypothetical 100 bps increase in SOFR on variable-rate debt would lead to an increase of approximately $9.2 million in annual interest expense[190]. - The company incurred interest payments of $242.1 million during the fiscal year ended June 29, 2024, compared to $218.5 million in the previous year[215]. Shareholder Equity and Stock Compensation - The total shareholders' equity as of July 1, 2023, was $3,745.5 million, reflecting growth from $3,299.5 million as of July 2, 2022[210]. - Stock-based compensation expense was $37.4 million for the fiscal year ended June 29, 2024, slightly down from $39.2 million in the prior year[212]. - The intrinsic value of exercised options was $4.3 million for fiscal 2024, compared to $3.6 million for fiscal 2023, indicating an increase of approximately 19.4%[319]. - Total unrecognized compensation cost for all awards under the 2015 Incentive Plan is $45.0 million as of June 29, 2024, expected to be recognized over a weighted-average period of 1.7 years[323]. Legal and Contingencies - The Company is engaged in various legal proceedings, but management does not believe that the ultimate resolution will have a material adverse effect on its financial position[308]. - JUUL reached settlements in the multidistrict litigation, with the first settlement payment made on October 27, 2023, which may impact the Company’s future financial obligations[310]. Inventory and Assets - As of June 29, 2024, the Company's inventory balance was $3,314.7 million, with $2,164.4 million valued at FIFO and $1,150.3 million valued at LIFO[226]. - The Company’s inventories were adjusted by approximately $16.5 million for slow-moving, excess, and obsolete inventories as of June 29, 2024[226]. - As of June 29, 2024, total intangible assets with definite lives amounted to $2,322.5 million, with a net value of $945.5 million after accumulated amortization[265]. - The investment in wholly owned subsidiary increased to $4,227.9 million as of June 29, 2024, from $3,826.3 million as of July 1, 2023[336].

Key Takeaways Performance Food Group acquired Cheney Bros., a foodservice distribution company with a footprint in the Southeast. Cheney Bros. generates about $3.2 billion in annual revenue. PFG also posted fourth-quarter adjusted EPS that exceeded analysts' expectations. Performance Food Group Co. (PFGC) shares surged in intraday trading Wednesday after announcing a $2.1 billion cash acquisition of foodservice distributor Cheney Bros. and posting fourth-quarter adjusted earnings per share (EPS) that topped ...

Performance Food Group (PFGC) came out with quarterly earnings of $1.45 per share, beating the Zacks Consensus Estimate of $1.35 per share. This compares to earnings of $1.14 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 7.41%. A quarter ago, it was expected that this food distributor would post earnings of $0.83 per share when it actually produced earnings of $0.80, delivering a surprise of -3.61%. Over the last four quart ...

The market expects Performance Food Group (PFGC) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on August 14, 2024, might help the stock move higher if these key n ...

☐ 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 001-37578 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 30, 2024 Performance Food Group Company (Exact name of registrant as specified in its charter) Delaware 43-1983182 (State ...

Performance Food Group Co (NYSE:PFGC) Q3 2024 Earnings Conference Call May 8, 2024 9:00 AM ET Company Participants Bill Marshall - VP, IR George Holm - Chairman & CEO Patrick Hatcher - EVP & CFO Conference Call Participants Mark Carden - UBS Jake Bartlett - Truist Securities Edward Kelly - Wells Fargo Securities Kelly Bania - BMO Capital Markets Brian Harbour - Morgan Stanley Jeffrey Bernstein - Barclays Bank Lauren Silberman - Deutsche Bank Peter Saleh - BTIG Alexander Slagle - Jefferies John Heinbockel - ...

[Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) This section provides an overview of Performance Food Group Company's financial performance for the third quarter and first nine months of fiscal 2024, including key financial highlights and CEO commentary [Third-Quarter Fiscal 2024 Highlights](index=1&type=section&id=Third-Quarter%20Fiscal%202024%20Highlights) Performance Food Group Company reported mixed results for the third quarter of fiscal 2024, with slight net sales growth and improved gross profit, but a decrease in net income and diluted EPS. Adjusted EBITDA saw a modest increase, while total case volume slightly declined Third-Quarter Fiscal 2024 Key Financial Highlights | Metric | Value | Change YoY | Source | | :-------------------------------- | :---------- | :--------- | :----- | | Total case volume | -0.2% | Decrease | [5] | | Organic Independent Foodservice case volume | 4.3% | Increase | [5] | | Net sales | $13.9 billion | 0.6% Increase | [5] | | Gross profit | $1.6 billion | 3.8% Improvement | [5] | | Net income | $70.4 million | 12.3% Decrease | [5] | | Adjusted EBITDA | $320.7 million | 1.9% Increase | [5] | | Diluted EPS | $0.45 | 11.8% Decrease | [5] | | Adjusted Diluted EPS | $0.80 | 3.6% Decrease | [5] | [First-Nine Months Fiscal 2024 Highlights](index=1&type=section&id=First-Nine%20Months%20Fiscal%202024%20Highlights) For the first nine months of fiscal 2024, PFG demonstrated overall growth in total case volume, net sales, gross profit, net income, and Adjusted EBITDA, alongside strong cash flow generation First-Nine Months Fiscal 2024 Key Financial Highlights | Metric | Value | Change YoY | Source | | :-------------------------------- | :---------- | :--------- | :----- | | Total case volume | 1.7% | Growth | [5] | | Organic Independent Foodservice case volume | 6.9% | Increase | [5] | | Net sales | $43.1 billion | 1.7% Increase | [5] | | Gross profit | $4.8 billion | 5.3% Improvement | [5] | | Net income | $269.4 million | 9.0% Increase | [5] | | Adjusted EBITDA | $1,049.9 million | 7.3% Increase | [5] | | Diluted EPS | $1.72 | 8.9% Increase | [5] | | Adjusted Diluted EPS | $2.85 | 4.4% Increase | [5] | | Operating Cash Flow | $956.7 million | N/A | [5] | | Free cash flow | $712.3 million | N/A | [5] | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO George Holm acknowledged a challenging operating environment in Q3, particularly in January due to weather, but highlighted sequential improvement in February and March, strong independent restaurant case growth, and solid Adjusted EBITDA execution. The company is raising the lower end of its full-year 2024 Adjusted EBITDA guidance - **Independent restaurant case growth** **recovered nicely**, **increasing nearly 6%** in the final two months of the quarter, indicating **market share gains**[4](index=4&type=chunk) - **Adjusted EBITDA** **reached the midpoint** of guidance, and the company reported **strong cash flow**[4](index=4&type=chunk) - The **bottom-end** of full year 2024 **Adjusted EBITDA guidance** was **raised** to a **$1.48 billion** to **$1.5 billion** range[4](index=4&type=chunk) [Detailed Financial Performance](index=3&type=section&id=Detailed%20Financial%20Performance) This section details Performance Food Group Company's financial performance for the third quarter and first nine months of fiscal 2024, along with cash flow and capital allocation activities [Third-Quarter Fiscal 2024 Financial Summary](index=3&type=section&id=Third-Quarter%20Fiscal%202024%20Financial%20Summary) The third quarter of fiscal 2024 saw a slight decrease in total case volume due to weather, but net sales and gross profit increased, driven by independent Foodservice growth and procurement efficiencies. Operating expenses rose, leading to a decrease in net income, though Adjusted EBITDA still saw a modest increase [Total Company Performance](index=3&type=section&id=Total%20Company%20Performance_Q3) Total case volume decreased slightly, impacted by adverse weather, while organic independent cases grew. Net sales increased due to independent Foodservice growth and acquisitions, despite declines in the Convenience business. Gross profit improved from a favorable sales mix and cost optimization, but rising operating expenses led to a decline in net income - **Total case volume** **decreased 0.2% YoY**, with **organic case volume** **down 0.6%**, **primarily due to** bad weather. **Organic independent cases** **increased 4.3%**[6](index=6&type=chunk) - **Net sales** **grew 0.6%** to **$13.9 billion**, **driven by** **independent Foodservice case volume growth** and acquisitions, partially offset by Convenience business declines. **Product cost inflation** was approximately **3.6%**[7](index=7&type=chunk) - **Gross profit** **increased 3.8%** to **$1.6 billion**, **attributed to** a **favorable mix shift** towards independent and Performance Brands cases, and **procurement efficiencies**[8](index=8&type=chunk) - **Operating expenses** **rose 5.3%** to **$1.4 billion**, **mainly due to increases** in **personnel, insurance, and repairs and maintenance expenses**[9](index=9&type=chunk) - **Net income** **decreased 12.3%** to **$70.4 million**, **primarily due to** a **$13.9 million decrease** in **operating profit**, partially offset by lower income tax expense (**effective tax rate 27.3%** vs **28.1%** prior year)[10](index=10&type=chunk) - **Adjusted EBITDA** **increased 1.9%** to **$320.7 million**. **Diluted EPS** **decreased 11.8%** to **$0.45**, and **Adjusted Diluted EPS** **decreased 3.6%** to **$0.80**[11](index=11&type=chunk) [Segment Results](index=5&type=section&id=Segment%20Results_Q3) In Q3, Foodservice net sales increased due to independent business growth, but Adjusted EBITDA slightly decreased due to higher operating expenses. Vistar saw net sales growth from an acquisition, but Adjusted EBITDA also slightly declined due to increased operating expenses. Convenience experienced declines in both net sales and Adjusted EBITDA, primarily from reduced cigarette carton sales and expected decreases in inventory holding gains [Foodservice Segment](index=5&type=section&id=Foodservice%20Segment_Q3) Foodservice net sales increased 1.0% to $7.0 billion, driven by independent business case volume growth (4.3% organic independent case growth). However, Adjusted EBITDA decreased 0.3% to $219.3 million due to a 4.0% increase in operating expenses, partially offset by a 3.0% increase in gross profit from a favorable mix shift to independent customers and Performance Brands Foodservice Segment Q3 FY2024 Performance | Metric | Value | Change YoY | Source | | :-------------------- | :---------- | :--------- | :----- | | Net Sales | $7.0 billion | 1.0% Increase | [20] | | Organic Independent Case Growth | 4.3% | Increase | [20] | | Independent Sales % of Total Segment Sales | 38.8% | N/A | [20] | | Adjusted EBITDA | $219.3 million | 0.3% Decrease | [21] | | Gross Profit Contribution to Adj. EBITDA | 3.0% | Increase | [21] | | Operating Expenses Impacting Adj. EBITDA | 4.0% | Increase | [21] | [Vistar Segment](index=5&type=section&id=Vistar%20Segment_Q3) Vistar's net sales increased 1.7% to $1.1 billion, primarily due to a recent acquisition. Adjusted EBITDA decreased 0.3% to $72.9 million, as an 8.5% increase in operating expenses (driven by acquisition and building rent) largely offset a 5.4% increase in gross profit (from acquisition and procurement efficiencies) Vistar Segment Q3 FY2024 Performance | Metric | Value | Change YoY | Source | | :-------------------- | :---------- | :--------- | :----- | | Net Sales | $1.1 billion | 1.7% Increase | [22] | | Adjusted EBITDA | $72.9 million | 0.3% Decrease | [23] | | Gross Profit Contribution to Adj. EBITDA | 5.4% | Increase | [23] | | Operating Expenses Impacting Adj. EBITDA | 8.5% | Increase | [23] | [Convenience Segment](index=5&type=section&id=Convenience%20Segment_Q3) Convenience net sales decreased 0.7% to $5.6 billion, mainly due to declines in cigarette carton sales and food/foodservice related cases, partially offset by price increases. Adjusted EBITDA decreased 3.1% to $70.9 million, driven by a 2.1% decrease in gross profit (due to expected decreases in inventory holding gains), despite a $7.6 million decrease in operating expenses Convenience Segment Q3 FY2024 Performance | Metric | Value | Change YoY | Source | | :-------------------- | :---------- | :--------- | :----- | | Net Sales | $5.6 billion | 0.7% Decrease | [24] | | Adjusted EBITDA | $70.9 million | 3.1% Decrease | [25] | | Gross Profit Contribution to Adj. EBITDA | 2.1% | Decrease | [25] | | Operating Expenses Impacting Adj. EBITDA | $7.6 million | Decrease | [25] | [First-Nine Months Fiscal 2024 Financial Summary](index=3&type=section&id=First-Nine%20Months%20Fiscal%202024%20Financial%20Summary) For the first nine months of fiscal 2024, PFG achieved growth across key financial metrics, including total case volume, net sales, gross profit, net income, and Adjusted EBITDA, driven by increased cases sold, procurement efficiencies, and operating profit improvements [Total Company Performance](index=3&type=section&id=Total%20Company%20Performance_9M) Total case volume and organic case volume increased, with strong growth in organic independent cases. Net sales and gross profit rose, benefiting from increased cases sold and procurement efficiencies. Operating expenses also increased, but a significant rise in operating profit led to a 9.0% increase in net income and a 7.3% increase in Adjusted EBITDA - **Total case volume** **increased 1.7%** and **organic case volume** **increased 1.4%**, with **organic independent cases** **up 6.9%**[12](index=12&type=chunk) - **Net sales** **grew 1.7%** to **$43.1 billion**, **primarily due to** an **increase in cases sold**[13](index=13&type=chunk) - **Gross profit** **increased 5.3%** to **$4.8 billion**, **driven by** **cost of goods sold optimization** through **procurement efficiencies** and **growth in cases sold**[14](index=14&type=chunk) - **Operating expenses** **rose 5.0%** to **$4.3 billion**, **mainly due to increases** in **personnel, insurance, and repairs and maintenance expenses**, plus a **$42.7 million increase** in **depreciation and amortization from acquisitions**[15](index=15&type=chunk) - **Net income** **increased 9.0%** to **$269.4 million**, **resulting from** a **$41.0 million increase** in **operating profit**, partially offset by **higher interest and income tax expenses**[16](index=16&type=chunk) - **Adjusted EBITDA** **rose 7.3%** to **$1,049.9 million**. **Diluted EPS** **increased 8.9%** to **$1.72**, and **Adjusted Diluted EPS** **increased 4.4%** to **$2.85**[17](index=17&type=chunk) [Segment Results](index=18&type=section&id=Segment%20Results_9M) For the first nine months, Foodservice net sales increased 0.9% to $21.4 billion, with Adjusted EBITDA up 2.8% to $689.4 million. Vistar showed strong growth, with net sales up 7.9% to $3.6 billion and Adjusted EBITDA up 6.4% to $255.1 million. Convenience net sales increased 0.5% to $17.9 billion, and Adjusted EBITDA saw a modest 0.4% increase to $249.1 million Segment Net Sales (Nine Months Ended March 30, 2024) | Segment | Net Sales ($M) | Change YoY (%) | Source | | :------------------ | :------------- | :------------- | :----- | | Foodservice | 21,371.8 | 0.9 | [52] | | Vistar | 3,586.1 | 7.9 | [52] | | Convenience | 17,918.5 | 0.5 | [52] | | Corporate & All Other | 699.7 | 42.7 | [52] | | Intersegment Eliminations | (484.1) | (12.6) | [52] | | **Total Net Sales** | **43,092.0** | **1.7** | [52] | Segment Adjusted EBITDA (Nine Months Ended March 30, 2024) | Segment | Adjusted EBITDA ($M) | Change YoY (%) | Source | | :------------------ | :------------------- | :------------- | :----- | | Foodservice | 689.4 | 2.8 | [53] | | Vistar | 255.1 | 6.4 | [53] | | Convenience | 249.1 | 0.4 | [53] | | Corporate & All Other | (143.7) | 20.1 | [53] | | **Total Adjusted EBITDA** | **1,049.9** | **7.3** | [53] | [Cash Flow and Capital Allocation](index=5&type=section&id=Cash%20Flow%20and%20Capital%20Allocation) PFG generated significantly higher cash flow from operating activities and free cash flow in the first nine months of fiscal 2024, driven by working capital improvements and increased operating income. The company also continued its share repurchase program, repurchasing 1.3 million shares [Cash Flow from Operations and Investing](index=5&type=section&id=Cash%20Flow%20from%20Operations%20and%20Investing) Cash flow from operating activities increased substantially to $956.7 million, up from $657.2 million in the prior year, primarily due to improvements in working capital and higher operating income. Capital expenditures increased to $244.4 million, resulting in free cash flow of $712.3 million, a significant increase from $480.0 million Cash Flow Highlights (First Nine Months FY2024) | Metric | FY2024 ($M) | FY2023 ($M) | Change ($M) | Source | | :-------------------------------- | :---------- | :---------- | :---------- | :----- | | Cash flow from operating activities | 956.7 | 657.2 | 299.5 | [18] | | Capital expenditures | 244.4 | 177.2 | 67.2 | [19] | | Free cash flow | 712.3 | 480.0 | 232.3 | [19] | [Share Repurchase Program](index=5&type=section&id=Share%20Repurchase%20Program) During the first nine months of fiscal 2024, PFG repurchased and retired 1.3 million shares of common stock for $78.1 million, at an average cost of $58.83 per share. As of March 30, 2024, approximately $210.6 million remained available for additional repurchases - **Repurchased 1.3 million shares of common stock for $78.1 million** during the nine months ended March 30, 2024, at an **average cost of $58.83 per share**[19](index=19&type=chunk) - **Approximately $210.6 million remained available for additional share repurchases** as of March 30, 2024[19](index=19&type=chunk) [Outlook and Company Information](index=7&type=section&id=Outlook%20and%20Company%20Information) This section presents Performance Food Group Company's fiscal 2024 and long-term outlook, company overview, and a discussion of forward-looking statements and associated risk factors [Fiscal 2024 & Long-Term Outlook](index=7&type=section&id=Fiscal%202024%20%26%20Long-Term%20Outlook) PFG provided updated guidance for fiscal year 2024, narrowing its net sales expectation and raising the lower end of its Adjusted EBITDA range. The company is also reviewing and updating its fiscal 2025 net sales and Adjusted EBITDA targets, expecting to be comfortably within its long-term Adjusted EBITDA range Fiscal 2024 Outlook | Metric | Q4 FY2024 Expectation | Full Year FY2024 Expectation (New) | Full Year FY2024 Expectation (Prior) | Source | | :---------------- | :-------------------- | :--------------------------------- | :--------------------------------- | :----- | | Net Sales | $15 billion to $15.4 billion | $58.1 billion to $58.5 billion | $59 billion to $60 billion | [26, 27] | | Adjusted EBITDA | $430 million to $450 million | $1.48 billion to $1.5 billion | $1.45 billion to $1.5 billion | [26, 27] | - **PFG is reviewing and updating its 3-year, fiscal 2025 net sales and Adjusted EBITDA targets**, with additional details expected in August[28](index=28&type=chunk) - Given the **updated 2024 Adjusted EBITDA range**, the Company is **on pace to be comfortably within the $1.5 billion to $1.7 billion range for fiscal 2025**[28](index=28&type=chunk) [About Performance Food Group Company](index=7&type=section&id=About%20Performance%20Group%20Company) Performance Food Group is a Fortune 100 industry leader in food and foodservice distribution across North America, serving over 300,000 locations with a network of more than 150 facilities and over 35,000 associates - **PFG is one of the largest food and foodservice distribution companies in North America**, operating **over 150 locations**[31](index=31&type=chunk) - The company serves **over 300,000 locations**, including independent and chain restaurants, businesses, schools, healthcare facilities, vending distributors, and big box retailers[31](index=31&type=chunk) - **PFG is a Fortune 100 company** with **more than 35,000 dedicated associates**[31](index=31&type=chunk) [Forward-Looking Statements & Risk Factors](index=8&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) This section outlines various forward-looking statements and potential risks that could cause actual results to differ materially from expectations. Key risks include economic factors (inflation, downturns), reliance on third-party suppliers, labor costs, cybersecurity incidents, intense industry competition, low industry margins, and risks related to acquisitions and regulatory compliance - **Forward-looking statements are subject to various risks and uncertainties**, including **economic factors like inflation or downturns affecting consumer spending**[33](index=33&type=chunk) - **Key operational risks include reliance on third-party suppliers, labor relations and costs, cybersecurity incidents, and intense competition in a low-margin industry**[33](index=33&type=chunk) - **Strategic risks involve the inability to realize benefits from cost reduction efforts or acquisitions, and challenges in increasing sales in high-margin segments**[33](index=33&type=chunk) - **Regulatory and environmental risks include compliance with laws, changes in eating habits, and the impact of declining cigarette and tobacco product sales**[33](index=33&type=chunk) - **Financial risks include the impact of amortization charges from acquisitions, uncollectibility of accounts receivable, increased excise taxes, and risks related to substantial outstanding indebtedness and interest rate increases**[35](index=35&type=chunk) [Consolidated Financial Statements](index=11&type=section&id=Consolidated%20Financial%20Statements) This section provides Performance Food Group Company's consolidated statements of operations, balance sheets, and cash flows for the reported periods [Consolidated Statements of Operations](index=11&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations provide a detailed breakdown of PFG's revenues, costs, and profits for the three and nine months ended March 30, 2024, compared to the prior year periods, showing changes in net sales, gross profit, operating profit, and net income Consolidated Statements of Operations (Unaudited) | (In millions, except per share data) | Three Months Ended March 30, 2024 ($M) | Three Months Ended April 1, 2023 ($M) | Nine Months Ended March 30, 2024 ($M) | Nine Months Ended April 1, 2023 ($M) | | :----------------------------------- | :------------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | | Net sales | $13,857.7 | $13,771.3 | $43,092.0 | $42,389.5 | | Cost of goods sold | 12,288.8 | 12,259.4 | 38,262.1 | 37,802.9 | | Gross profit | 1,568.9 | 1,511.9 | 4,829.9 | 4,586.6 | | Operating expenses | 1,414.0 | 1,343.1 | 4,284.9 | 4,082.6 | | Operating profit | 154.9 | 168.8 | 545.0 | 504.0 | | Interest expense, net | 57.1 | 55.9 | 174.6 | 162.0 | | Income before taxes | 96.8 | 111.8 | 371.8 | 337.9 | | Income tax expense | 26.4 | 31.5 | 102.4 | 90.8 | | Net income | $70.4 | $80.3 | $269.4 | $247.1 | | Diluted EPS | $0.45 | $0.51 | $1.72 | $1.58 | [Condensed Consolidated Balance Sheets](index=12&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The Condensed Consolidated Balance Sheets present PFG's financial position as of March 30, 2024, compared to July 1, 2023, detailing assets, liabilities, and shareholders' equity. Total assets increased to $12.87 billion, driven by increases in property, plant and equipment, and operating lease right-of-use assets Condensed Consolidated Balance Sheets (Unaudited) | ($ in millions) | As of March 30, 2024 ($M) | As of July 1, 2023 ($M) | | :------------------------------------------------ | :------------------------ | :---------------------- | | **ASSETS** | | | | Total current assets | $5,822.8 | $6,071.5 | | Goodwill | 2,418.7 | 2,301.0 | | Other intangible assets, net | 1,022.7 | 1,028.4 | | Property, plant and equipment, net | 2,571.4 | 2,264.0 | | Operating lease right-of-use assets | 861.0 | 703.6 | | Total assets | **$12,873.9** | **$12,499.0** | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Total current liabilities | $3,540.5 | $3,553.1 | | Long-term debt | 3,215.4 | 3,460.1 | | Total liabilities | 8,920.5 | 8,753.5 | | Total shareholders' equity | 3,953.4 | 3,745.5 | | Total liabilities and shareholders' equity | **$12,873.9** | **$12,499.0** | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The Condensed Consolidated Statements of Cash Flows highlight a significant increase in net cash provided by operating activities for the nine months ended March 30, 2024, driven by higher net income and favorable changes in working capital. Net cash used in investing activities increased due to higher capital expenditures and acquisitions, while net cash used in financing activities decreased Condensed Consolidated Statements of Cash Flows (Unaudited) | ($ in millions) | Nine Months Ended March 30, 2024 ($M) | Nine Months Ended April 1, 2023 ($M) | | :------------------------------------------ | :------------------------------------ | :----------------------------------- | | Net cash provided by operating activities | $956.7 | $657.2 | | Net cash used in investing activities | (533.0) | (219.5) | | Net cash used in financing activities | (419.6) | (441.0) | | Net increase (decrease) in cash and restricted cash | 4.1 | (3.3) | | Cash and restricted cash, end of period | $24.1 | $15.4 | - **Net cash provided by operating activities** **increased by $299.5 million**, **largely driven by improvements in working capital** and **higher operating income**[18](index=18&type=chunk)[38](index=38&type=chunk) - **Purchases of property, plant and equipment** **increased to $244.4 million** from **$177.2 million** in the prior year[38](index=38&type=chunk) - **Net cash paid for acquisitions** **significantly increased to $307.9 million** from **$63.9 million** in the prior year[38](index=38&type=chunk) [Non-GAAP Financial Measures](index=15&type=section&id=Non-GAAP%20Financial%20Measures) This section defines Performance Food Group Company's non-GAAP financial measures and provides detailed reconciliations to their most comparable GAAP measures [Statement Regarding Non-GAAP Financial Measures](index=15&type=section&id=Statement%20Regarding%20Non-GAAP%20Financial%20Measures) This section defines and explains the rationale behind PFG's use of non-GAAP financial measures, including Adjusted EBITDA, Adjusted Diluted EPS, and Free Cash Flow. These measures are used by management to evaluate business performance, for planning, and for incentive compensation, as they provide insight into core operations by excluding certain non-recurring or non-cash items - **Adjusted EBITDA is defined as net income before interest, taxes, depreciation, and amortization**, further adjusted for items not considered part of core operating results (e.g., LIFO reserve changes, acquisition expenses)[42](index=42&type=chunk) - **Adjusted Diluted EPS excludes the same items as Adjusted EBITDA**, plus amortization of intangible assets, which management believes is not reflective of ongoing operations[43](index=43&type=chunk) - **Free Cash Flow is defined as net cash provided by operating activities less capital expenditures**, used to assess the company's ability to make strategic investments and manage debt[44](index=44&type=chunk) - These **non-GAAP measures are used by management for performance evaluation, business planning, and incentive compensation**, and are believed to be **useful to investors for understanding underlying business trends**[41](index=41&type=chunk)[45](index=45&type=chunk) [Non-GAAP Reconciliations](index=16&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures (Adjusted EBITDA, Adjusted Diluted EPS, and Free Cash Flow) to their most comparable GAAP financial measures for both the third quarter and the first nine months of fiscal 2024 [Third-Quarter Non-GAAP Reconciliation](index=16&type=section&id=Third-Quarter%20Non-GAAP%20Reconciliation) The reconciliation for the third quarter shows the adjustments made to GAAP net income and diluted EPS to arrive at Adjusted EBITDA and Adjusted Diluted EPS, including add-backs for interest, taxes, depreciation, amortization, LIFO reserve changes, stock-based compensation, and acquisition-related expenses Third-Quarter Non-GAAP Reconciliation (Unaudited) | ($ in millions, except share and per share data) | March 30, 2024 ($) | April 1, 2023 ($) | Change ($) | Change (%) | | :----------------------------------------------- | :----------------- | :---------------- | :--------- | :--------- | | Net income (GAAP) | $70.4 | $80.3 | $(9.9) | (12.3) | | Interest expense, net | 57.1 | 55.9 | 1.2 | 2.1 | | Income tax expense | 26.4 | 31.5 | (5.1) | (16.2) | | Depreciation | 90.7 | 78.7 | 12.0 | 15.2 | | Amortization of intangible assets | 48.6 | 46.1 | 2.5 | 5.4 | | Change in LIFO reserve | 9.5 | 16.5 | (7.0) | (42.4) | | Stock-based compensation expense | 10.0 | 10.2 | (0.2) | (2.0) | | Acquisition, integration & reorganization expenses | 5.4 | 1.4 | 4.0 | 285.7 | | Other adjustments | 3.2 | (8.6) | 11.8 | 137.2 | | **Adjusted EBITDA (Non-GAAP)** | **$320.7** | **$314.7** | **$6.0** | **1.9** | | Diluted earnings per share (GAAP) | $0.45 | $0.51 | $(0.06) | (11.8) | | Impact of amortization of intangible assets | 0.31 | 0.29 | 0.02 | 6.9 | | Impact of change in LIFO reserve | 0.06 | 0.11 | (0.05) | (45.5) | | Impact of acquisition, integration & reorganization charges | 0.04 | 0.01 | 0.03 | 300.0 | | Tax impact of above adjustments | (0.14) | (0.12) | (0.02) | (16.7) | | **Adjusted Diluted Earnings per Share (Non-GAAP)** | **$0.80** | **$0.83** | **$(0.03)** | **(3.6)** | [Nine-Months Non-GAAP Reconciliation](index=17&type=section&id=Nine-Months%20Non-GAAP%20Reconciliation) The reconciliation for the first nine months details the adjustments from GAAP net income and diluted EPS to Adjusted EBITDA and Adjusted Diluted EPS, showing the impact of various non-operating items. Additionally, the Free Cash Flow reconciliation highlights the conversion of operating cash flow into free cash flow Nine-Months Non-GAAP Reconciliation (Unaudited) | ($ in millions, except share and per share data) | March 30, 2024 ($) | April 1, 2023 ($) | Change ($) | Change (%) | | :----------------------------------------------- | :----------------- | :---------------- | :--------- | :--------- | | Net income (GAAP) | $269.4 | $247.1 | $22.3 | 9.0 | | Interest expense, net | 174.6 | 162.0 | 12.6 | 7.8 | | Income tax expense | 102.4 | 90.8 | 11.6 | 12.8 | | Depreciation | 260.8 | 232.2 | 28.6 | 12.3 | | Amortization of intangible assets | 151.1 | 137.0 | 14.1 | 10.3 | | Change in LIFO reserve | 50.5 | 68.3 | (17.8) | (26.1) | | Stock-based compensation expense | 31.7 | 33.1 | (1.4) | (4.2) | | Acquisition, integration & reorganization expenses | 19.1 | 7.2 | 11.9 | 165.3 | | Other adjustments | (7.4) | (4.7) | (2.7) | (57.4) | | **Adjusted EBITDA (Non-GAAP)** | **$1,049.9** | **$978.2** | **$71.7** | **7.3** | | Diluted earnings per share (GAAP) | $1.72 | $1.58 | $0.14 | 8.9 | | Impact of amortization of intangible assets | 0.97 | 0.88 | 0.09 | 10.2 | | Impact of change in LIFO reserve | 0.32 | 0.44 | (0.12) | (27.3) | | Impact of acquisition, integration & reorganization charges | 0.12 | 0.05 | 0.07 | 140.0 | | Tax impact of above adjustments | (0.42) | (0.43) | 0.01 | 2.3 | | **Adjusted Diluted Earnings per Share (Non-GAAP)** | **$2.85** | **$2.73** | **$0.12** | **4.4** | Free Cash Flow Reconciliation (Nine Months Ended March 30, 2024) | (In millions) | March 30, 2024 ($M) | April 1, 2023 ($M) | | :------------------------------------------ | :------------------ | :----------------- | | Net cash provided by operating activities (GAAP) | $956.7 | $657.2 | | Purchases of property, plant and equipment | (244.4) | (177.2) | | **Free cash flow (Non-GAAP)** | **$712.3** | **$480.0** |

UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the quarterly period ended December 30, 2023 ☐ 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 001-37578 Performance Food Group Company (Exact name of registrant as specified in its charter) Delaware 43-1983182 (State or other jurisdiction of incorporation or organization) Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO ...

Performance Food Group Company (NYSE:PFGC) Q2 2024 Earnings Conference Call February 7, 2024 9:00 AM ET Company Participants William S. Marshall - Vice President, Investor Relations George Holm - Chairman and Chief Executive Officer Patrick Hatcher - Executive Vice President and Chief Financial Officer Conference Call Participants Jake Bartlett - Truist Securities Mark Carden - UBS Edward Kelly - Wells Fargo Kelly Bania - BMO Capital Markets Alex Slagle - Jefferies Brian Harbour - Morgan Stanley Joshua Long ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 ☐ 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 001-37578 Performance Food Group Company (Exact name of registrant as specified in its charter) (State or other jurisdi ...