Performance Food pany(US:PFGC)2025-11-05 21:16Financial Performance - Net sales for the three months ended September 27, 2025, increased to $17,075.9 million, up 10.8% from $15,415.5 million for the same period in 2024[19] - Gross profit for the same period rose to $2,016.6 million, representing a 14.3% increase compared to $1,764.2 million in the prior year[19] - Operating profit was $224.7 million, slightly up from $215.3 million, indicating a growth of 6.5% year-over-year[19] - Net income decreased to $93.6 million, down 13.3% from $108.0 million in the previous year[19] - Adjusted EBITDA rose by $68.2 million, or 16.6%, to $480.1 million for the first three months of fiscal 2026 compared to $411.9 million in the prior year[115] - Basic earnings per common share for the three months ended September 27, 2025, was $0.60, down from $0.70 for the same period in 2024[84] Assets and Liabilities - Total assets as of September 27, 2025, were $18,351.8 million, an increase from $17,881.2 million as of June 28, 2025[17] - Total liabilities increased to $13,778.3 million from $13,408.8 million, reflecting a rise of 2.7%[17] - The company reported long-term debt of $5,636.8 million as of September 27, 2025, an increase from $5,388.8 million as of June 28, 2025[3] - The company’s total shareholders' equity increased to $4,573.5 million as of September 27, 2025, up from $4,472.4 million[17] - As of September 27, 2025, total lease liabilities amounted to $2,664.9 million, with operating lease obligations at $998.1 million and finance lease obligations at $1,666.8 million[66] Cash Flow and Investments - Cash and restricted cash at the end of the period was $46.4 million, down from $50.3 million a year earlier[26] - The company reported a net cash used in operating activities of $145.2 million for the three months ended September 27, 2025, compared to a net cash provided of $53.5 million in the same period last year[26] - Cash used in investing activities totaled $78.0 million in the first three months of fiscal 2026, significantly lower than $669.8 million in the same period of fiscal 2025[150] - The company had total purchase obligations of $324.6 million as of September 27, 2025, including $198.3 million for capital projects[145] Debt and Interest - Interest expense for the quarter was $104.4 million, significantly higher than $66.8 million in the prior year, marking a 56.3% increase[19] - Interest expense rose by $37.6 million, or 56.3%, to $104.4 million, primarily due to increased average borrowings[123] - The average interest rate on borrowings under the ABL Facility was 5.78% as of September 27, 2025, slightly down from 5.86% as of June 28, 2025[5] Acquisitions - The company acquired Cheney Bros., Inc. for $2.0 billion, financed through borrowings under its asset-based revolving credit facility[4] - The Cheney Brothers Acquisition contributed $852.5 million to net sales in the first three months of fiscal 2026[127] Taxation - The Company's effective tax rate was 23.0% for the three months ended September 27, 2025, compared to 26.5% for the same period in 2024[71] - The effective tax rate for the first three months of fiscal 2026 was 23.0%, down from 26.5% in the prior year, due to increased deductible items and tax credits[124] Segments Performance - The Foodservice segment reported an Adjusted EBITDA of $324.4 million for Q3 2025, up from $274.6 million in Q3 2024, indicating a growth of about 18.1%[96] - The Convenience segment's Adjusted EBITDA increased to $121.0 million in Q3 2025 from $105.3 million in Q3 2024, marking a growth of approximately 14.9%[96] - The Specialty segment's Adjusted EBITDA rose to $94.0 million for Q3 2025, compared to $83.2 million in Q3 2024, representing an increase of about 13.5%[96] Operational Insights - The company continues to monitor macroeconomic factors, including inflationary pressures and supply chain disruptions, which could impact future sales and profitability[103] - The company serves both independent and multi-unit customers in the restaurant industry, distributing a broad range of food and food-related products across North America[8] - The company emphasizes cross-segment collaboration to enhance customer service and operational efficiency, leveraging its diverse segments[101] Shareholder Actions - The company authorized a share repurchase program for up to $500 million, replacing a previous $300 million program, with $500 million remaining available for repurchases as of September 27, 2025[2] - The company repurchased a total of 247,843 shares of common stock during the first quarter of fiscal 2026 at an average price of $100.30 per share[171] Compliance and Controls - There were no material changes in the company's internal control over financial reporting during the fiscal quarter ended September 27, 2025[165] - The company's disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of the end of the reporting period[164] - The company is subject to various legal proceedings but believes that adequate provisions have been made to avoid material adverse effects on its financial position[168]