Performance Food pany(US:PFGC)2023-05-11 17:51Financial Performance - Net sales for the three months ended April 1, 2023, were $13,771.3 million, an increase of 5.3% compared to $13,079.0 million for the same period in 2022[111]. - Gross profit for the three months ended April 1, 2023, was $1,511.9 million, reflecting a 12.4% increase from $1,345.6 million in the prior year[111]. - Adjusted EBITDA for the three months ended April 1, 2023, was $314.7 million, up 32.3% from $237.9 million in the same period last year[111]. - Net income for the three months ended April 1, 2023, was $80.3 million, a significant increase of 243.2% compared to $23.4 million in the prior year[111]. - For the nine months ended April 1, 2023, net sales reached $42,389.5 million, representing a 16.8% increase from $36,304.1 million in the same period of 2022[113]. - The company reported a gross profit of $4,586.6 million for the nine months ended April 1, 2023, which is a 21.8% increase from $3,766.7 million in the previous year[113]. - Operating profit for the nine months ended April 1, 2023, was $504.0 million, reflecting a substantial increase of 188.7% from $174.6 million in the same period last year[113]. - Net income for the third quarter of fiscal 2023 increased to $80.3 million, compared to $23.4 million in the same period of fiscal 2022, representing a growth of 242.8%[114]. - Net sales for the third quarter of fiscal 2023 increased by $692.3 million, or 5.3%, reaching $13.77 billion, driven by higher selling prices and case growth[116]. - Adjusted EBITDA for the third quarter of fiscal 2023 was $314.7 million, a 32.3% increase from $237.9 million in the same quarter of fiscal 2022[128]. - Gross profit for the third quarter of fiscal 2023 rose by $166.3 million, or 12.4%, primarily due to a favorable shift in the mix of cases sold[117]. Operational Highlights - The company completed the acquisition of Core-Mark on September 1, 2021, which is expected to enhance its market position and operational efficiencies[97]. - The company is focused on expanding its customer base and geographic reach while leveraging synergies across its segments to drive growth[96]. - The company continues to monitor macroeconomic factors such as inflation and labor shortages that may impact its future financial performance[99]. - Total case volume increased by 3.1% in the third quarter of fiscal 2023 compared to the same period in fiscal 2022, with independent case growth at 8.3%[116]. - Operating expenses increased by $66.1 million, or 5.2%, for the third quarter of fiscal 2023, largely due to higher case volume and personnel expenses[118]. Segment Performance - Foodservice segment net sales increased by $341.3 million, or 5.2%, in the third quarter of fiscal 2023, driven by inflation and a favorable mix[129]. - Adjusted EBITDA for Foodservice increased by $39.9 million, or 22.2%, from Q3 fiscal 2022 to Q3 fiscal 2023, and by $152.6 million, or 29.5%, for the first nine months of fiscal 2023 compared to the prior year[130]. - Net sales for Vistar increased by $222.6 million, or 24.9%, from Q3 fiscal 2022 to Q3 fiscal 2023, and by $677.8 million, or 25.6%, for the first nine months of fiscal 2023 compared to the prior year[134]. - Adjusted EBITDA for Vistar increased by $25.1 million, or 52.3%, from Q3 fiscal 2022 to Q3 fiscal 2023, and by $111.8 million, or 87.4%, for the first nine months of fiscal 2023 compared to the prior year[135]. - Net sales for Convenience increased by $106.7 million, or 1.9%, from Q3 fiscal 2022 to Q3 fiscal 2023, and by $3.4 billion, or 23.4%, for the first nine months of fiscal 2023 compared to the prior year[138][139]. - Adjusted EBITDA for Convenience increased by $11.3 million, or 18.3%, from Q3 fiscal 2022 to Q3 fiscal 2023, and by $78.3 million, or 46.1%, for the first nine months of fiscal 2023 compared to the prior year[140][141]. Cash Flow and Investments - Cash flow from operating activities increased to $657.2 million in the first nine months of fiscal 2023, compared to $390.6 million in the same period of fiscal 2022[153]. - Cash used in investing activities totaled $219.5 million in the first nine months of fiscal 2023, significantly lower than $1,788.2 million in the same period of fiscal 2022[154]. - Total purchase obligations as of April 1, 2023, amounted to $142.3 million, including commitments for capital projects and services[150]. - The company had a cash balance of $15.4 million as of April 1, 2023, compared to $18.7 million as of July 2, 2022[152]. Debt and Interest Rates - Cash flow from financing activities for the first nine months of fiscal 2022 was $1,396.2 million, primarily from $1.0 billion in cash from the issuance of Notes due 2029 and $835.7 million in net borrowings under the ABL Facility[157]. - As of April 1, 2023, aggregate borrowings under the ABL Facility were $1,227.8 million, down from $1,608.4 million as of July 2, 2022[160]. - Average interest rate under the ABL Facility increased to 6.27% as of April 1, 2023, compared to 2.89% as of July 2, 2022[160]. - The ABL Facility has an aggregate principal amount of $4.0 billion and is scheduled to mature on September 17, 2026[157]. - The First Amendment transitioned the benchmark interest rate for the Amended ABL Facility from LIBOR to SOFR, affecting the interest calculation options[162]. - The Notes due 2025 were issued at a principal amount of $275.0 million with a 6.875% interest rate, maturing on May 1, 2025[163]. - The Notes due 2027 were issued at a principal amount of $1,060.0 million with a 5.500% interest rate, maturing on October 15, 2027[167]. - The Notes due 2029 were issued at a principal amount of $1.0 billion with a 4.250% interest rate, maturing on August 1, 2029[171]. Asset Management - Total assets for the Foodservice segment increased by $34.5 million from $6,365.5 million as of April 2, 2022, to $6,400.0 million as of April 1, 2023[178]. - Total assets for the Vistar segment increased by $139.2 million from $1,086.7 million as of April 2, 2022, to $1,225.9 million as of April 1, 2023[179]. - Total assets for the Convenience segment decreased by $112.4 million from $4,177.2 million as of April 2, 2022, to $4,064.8 million as of April 1, 2023[180]. - Total assets for Corporate & All Other increased by $148.6 million from $350.2 million as of April 2, 2022, to $498.8 million as of April 1, 2023[181]. - As of April 1, 2023, Performance Food Group, Inc. had three interest rate swaps with a combined notional amount of $500.0 million designated as cash flow hedges[186]. Interest Rate Sensitivity - A hypothetical 100 bps increase in SOFR on variable-rate debt would lead to an increase of approximately $8.8 million in annual interest expense[190]. - Estimated gains of approximately $13.3 million will be reclassified as a decrease to interest expense over the next twelve months[187]. - A hypothetical 100 bps decrease in SOFR would result in a loss of $7.5 million, while a 100 bps increase would result in a gain of $7.3 million within accumulated other comprehensive income[188]. - Approximately $351.1 million of outstanding long-term debt is fixed through interest rate swap agreements over the next 12 months[190]. - The benchmark interest rate for the Amended ABL Facility was transitioned from LIBOR to SOFR on April 17, 2023[189]. - Total assets for the Convenience segment decreased by $346.8 million from $4,411.6 million as of July 2, 2022, to $4,064.8 million as of April 1, 2023[180]. - Corporate & All Other primarily increased its assets due to a recent immaterial acquisition during both reported periods[181].