Performance Food pany(US:PFGC)2025-02-05 12:00Financial Performance - Net sales for Q2 FY2025 grew 9.4% to $15.6 billion, driven by acquisitions and inflation-related price increases[8]. - Adjusted EBITDA for Q2 FY2025 increased 22.5% to $423.0 million, reflecting strong operational performance[12]. - Net income for Q2 FY2025 decreased 45.8% to $42.4 million, primarily due to increased interest expenses[11]. - For the first six months of FY2025, net sales rose 6.2% to $31.1 billion, supported by recent acquisitions and case volume growth[14]. - Full FY2025 net sales outlook increased to approximately $63 billion to $64 billion, up from the previous estimate[28]. - Adjusted Diluted EPS for Q2 FY2025 increased 8.9% to $0.98 per share, while diluted EPS decreased 46.0% to $0.27 per share[12]. - Gross profit for the six months ended December 28, 2024, was $3,592.0 million, up 10.1% from $3,261.0 million for the same period in 2023[37]. - Operating profit for the three months ended December 28, 2024, was $158.8 million, a decrease of 8.5% from $173.9 million for the same period in 2023[37]. - Net income for the six months ended December 28, 2024, was $150.4 million, down 24.4% from $199.0 million for the same period in 2023[39]. - Adjusted EBITDA for the six months ended December 28, 2024, was $834.9 million, representing a 14.5% increase from $729.2 million in the prior year[49]. - Total Adjusted EBITDA for the three months ended December 28, 2024, increased by $77.6 million, or 22.5%, to $423.0 million compared to the same period in 2023[54]. - Total Adjusted EBITDA for the six months ended December 28, 2024, rose by $105.7 million, or 14.5%, to $834.9 million compared to the same period in 2023[54]. Cash Flow and Debt - Operating cash flow for the first six months of FY2025 was $379.0 million, down from $554.0 million in the prior year[19]. - Free cash flow for the first six months of FY2025 was $175.1 million, compared to $406.9 million in the prior year[20]. - Cash and restricted cash decreased to $18.7 million as of December 28, 2024, from $27.7 million as of June 29, 2024[39]. - Interest expense for the six months ended December 28, 2024, increased to $167.0 million, a 42.1% rise from $117.5 million in the previous year[49]. - Cash paid for interest during the year was $146.3 million for the six months ended December 28, 2024, compared to $122.3 million in the previous year[40]. - Long-term debt rose to $5,691.2 million as of December 28, 2024, up from $3,198.5 million as of June 29, 2024[38]. - Income tax payments net of refunds for the six months ended December 28, 2024, were $84.1 million, down from $109.0 million in the same period of 2023[40]. Segment Performance - Foodservice segment net sales rose by $1,289.0 million, or 18.2%, reaching $8,368.3 million for the three months ended December 28, 2024[53]. - Convenience segment net sales showed a slight increase of $26.1 million, or 0.4%, reaching $5,967.5 million for the three months ended December 28, 2024[53]. - Vistar segment net sales increased by $32.7 million, or 2.7%, totaling $1,234.6 million for the three months ended December 28, 2024[53]. - Corporate & All Other segment reported a net sales increase of $12.5 million, or 5.5%, reaching $240.2 million for the three months ended December 28, 2024[53]. - Corporate & All Other segment Adjusted EBITDA decreased by $12.3 million, or 22.0%, totaling $(68.1) million for the three months ended December 28, 2024[54]. - Segment Adjusted EBITDA is used to evaluate the performance of the three reportable segments: Foodservice, Vistar, and Convenience[52]. Acquisitions and Risks - The acquisition of Cheney Bros., Inc. is expected to enhance the company's market position, although there are risks associated with integration and realization of anticipated synergies[34]. - The company faces various risks including economic downturns, reliance on third-party suppliers, and intense competition in the foodservice distribution industry[34]. - Acquisition, integration, and reorganization expenses for the six months ended December 28, 2024, were $70.4 million, a significant increase from $13.7 million in the prior year[49]. Asset Management - Total assets increased to $17,097.0 million as of December 28, 2024, compared to $13,392.9 million as of June 29, 2024[38]. - Depreciation for the six months ended December 28, 2024, was $211.5 million, an increase of 24.3% from $170.1 million in the previous year[49].