Press Releases
The Chefs' Warehouse, Inc. Reports Second Quarter 2011 Financial Results
Financial highlights for the second quarter of 2011 compared to the second quarter of 2010:
-
Net sales increased 18.7% to
$99.3 million for the second quarter of 2011 from$83.6 million for the second quarter of 2010. -
Gross profit increased 19.7% to
$26.2 million for the second quarter of 2011 from$21.9 million for the second quarter of 2010. -
Earnings per diluted share increased 30.8% to
$0.17 per diluted share for the second quarter of 2011 from$0.13 per diluted share for the second quarter of 2010. -
Adjusted EBITDA1 increased 31.3% to
$8.1 million for the second quarter of 2011 from$6.2 million for the second quarter of 2010. -
Modified pro forma earnings per diluted share1, or EPS, increased 33.3% to
$0.20 per diluted share for the second quarter of 2011 from$0.15 per diluted share for the second quarter of 2010.
"We are very pleased with our second quarter results," said
Second Quarter Fiscal 2011 Results
Net sales for the quarter ended
Gross profit increased approximately 19.7% to
Operating income increased approximately 37.5% to
Net income available to common stockholders was
1 Please see the Consolidated Statements of Operations at the end of this earnings release for a reconciliation of EBITDA, Adjusted EBITDA, modified pro forma net income and modified pro forma EPS to GAAP net income.
26 Weeks Ended
Net sales for the 26 weeks ended
Gross profit increased approximately 21% to
Net income available to common stockholders was
Recent Business Highlights
On
On
2011 Outlook
-
Revenue between
$384 million and $392 million . -
Net income per diluted share between
$0.41 and $0.44 . -
Modified pro forma net income per diluted share between
$0.76 and $0.79 .
Conference Call
The Company will host a conference call to discuss second quarter 2011 financial results today at
Forward-Looking Statements
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the Company's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties and are based on current expectations and management estimates; actual results may differ materially. The risks and uncertainties which could impact these statements include, but are not limited to, the Company's sensitivity to general economic conditions, including the current economic environment, changes in disposable income levels and consumer discretionary spending on food-away-from-home purchases; the Company's vulnerability to economic and other developments in the geographic markets in which it operates; the risks of supply chain interruptions due to lack of long-term contracts, severe weather or more prolonged climate change, work stoppages or otherwise; changes in the availability or cost of the Company's specialty food products; the ability to effectively price the Company's specialty food products and reduce the Company's expenses; the relatively low margins of the foodservice distribution industry and the Company's sensitivity to inflationary pressures; the Company's ability to successfully identify, obtain financing for and complete acquisitions of other foodservice distributors and to realize expected synergies from those acquisitions; increased fuel costs and expectations regarding the use of fuel surcharges; the loss of key members of the Company's management team and the Company's ability to replace such personnel; and the strain on the Company's infrastructure and resources caused by its growth. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by applicable laws. Any projections of future results of operations are based on a number of assumptions, many of which are outside the Company's control and should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. The Company may from time to time update these publicly announced projections, but it is not obligated to do so.
About
| THE CHEFS' WAREHOUSE, INC. | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| GAAP PRESENTATION WITH RECONCILIATION TO MODIFIED PRO FORMA | ||||
| THIRTEEN AND TWENTY SIX WEEKS ENDED JUNE 24, 2011 AND JUNE 25, 2010 | ||||
| (unaudited; in thousands except share amounts and per share data) | ||||
| 13 Weeks Ended | 26 Weeks Ended | |||
| 24-Jun-11 | 25-Jun-10 | 24-Jun-11 | 25-Jun-10 | |
| Sales | $ 99,255 | $ 83,613 | $ 182,438 | $ 153,614 |
| Cost of Sales | 73,000 | 61,670 | 134,148 | 113,687 |
| Gross Profit | 26,255 | 21,943 | 48,290 | 39,927 |
| Operating Expenses | 18,551 | 16,340 | 35,530 | 31,293 |
| Operating Income | 7,704 | 5,603 | 12,760 | 8,634 |
| Gain on Interest Rate Swap | -- | 248 | 81 | 430 |
| Interest Expense | 3,343 | 512 | 6,793 | 1,139 |
| Loss on Sale of Assets | -- | -- | 3 | -- |
| Pretax Income | 4,361 | 5,339 | 6,045 | 7,925 |
| Provision for taxes | 1,708 | 1,050 | 2,372 | 2,100 |
| Net Income | $ 2,653 | $ 4,289 | $ 3,673 | $ 5,825 |
| Deemed Dividend Accretion on Class A Units | -- | 1,180 | -- | 2,360 |
| Net Income attributable to common stockholders | 2,653 | 3,109 | 3,673 | 3,465 |
| Net Income per share to common stockholders | ||||
| Basic | $ 0.17 | $ 0.14 | $ 0.24 | $ 0.15 |
| Diluted | $ 0.17 | $ 0.13 | $ 0.23 | $ 0.15 |
| Weighted average shares outstanding | ||||
| Basic | 15,489,100 | 22,524,424 | 15,472,461 | 22,528,170 |
| Diluted | 16,000,000 | 23,356,827 | 16,000,000 | 23,377,172 |
| Adjustments to Reconcile GAAP to Modified Pro Forma Results (9) | ||||
| Net Income attributable to common stockholders | $ 2,653 | $ 3,109 | $ 3,673 | $ 3,465 |
| Management Fee(1) | -- | 88 | 0 | 175 |
| Incremental Public Company Costs(2) | (300) | (350) | (650) | (700) |
| Stock Compensation Charges(3) | (115) | -- | (230) | -- |
| Interest Expense(4) | 2,926 | -- | 5,943 | -- |
| Effective Tax Rate @ 39%(5) | -- | (930) | -- | (785) |
| Tax Effect Adjustments(6) | (979) | -- | (1,975) | -- |
| Deemed Dividend Accretion on Class A Units(7) | -- | 1,180 | -- | 2,360 |
| Total Adjustments | 1,532 | (12) | 3,088 | 1,050 |
| Modified Pro Forma Net Income | 4,185 | 3,097 | 6,761 | 4,515 |
| Diluted EPS — Modified Pro Forma | $ 0.20 | $ 0.15 | $ 0.32 | $ 0.22 |
| Diluted Shares Outstanding - Modified Pro Forma (8) | 20,834,938 | 20,834,938 | 20,834,938 | 20,834,938 |
1. Represents management fee paid to our former private equity investor.
2. Represents an estimate of recurring incremental legal, accounting, insurance and other compliance costs we expect to incur as a public company.
3. Represents the compensation charge on vesting equity grants provided at the time of the IPO.
4. Represents an adjustment to interest expense assuming post-IPO leverage levels under our new credit facility.
5. Represents a tax adjustment to normalize the 2010 effective tax rate.
6. Represents the tax impact of adjustments 1 through 4 above.
7. Represents the deemed dividend accretion on our Class A units, which we redeemed in
8. Represents diluted shares outstanding after giving effect to the initial public offering and the equity grants described in note 3.
9. We are presenting modified pro forma net income and modified pro forma EPS, which are not measurements determined in accordance with U.S. generally accepted accounting principles, or GAAP, because we believe these measures provide additional metrics to evaluate our operations and which we believe, when considered with both our GAAP results and the reconciliation to net income, provide a more complete understanding of our business than could be obtained absent this disclosure. We use modified pro forma net income and modified pro forma EPS, together with financial measures prepared in accordance with GAAP, such as revenue and cash flows from operations, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. The use of modified pro forma net income and modified pro forma EPS as performance measures permits a comparative assessment of our operating performance relative to our performance based upon our GAAP results while isolating the effects of our recent IPO and some items that vary from period to period without any correlation to core operating performance.
| THE CHEFS' WAREHOUSE, INC. | ||
|
2011 FULLY DILUTED EPS GAAP GUIDANCE RECONCILIATION TO 2011 MODIFIED PRO FORMA FULLY DILUTED EPS GUIDANCE |
||
| Low-End Guidance | High-End Guidance | |
| Net Income per diluted share | $ 0.41 | $ 0.44 |
| Incremental Public Company Costs (1) | (0.04) | (0.04) |
| Stock Compensation Charges (2) | (0.02) | (0.02) |
| Initial Stock Compensation Charge (3) | 0.09 | 0.09 |
| Write Off of Original Issue Discount (4) | 0.08 | 0.08 |
| Write Off of Deferred Financing Fee (5) | 0.13 | 0.13 |
| Call Premium Paid on Retirement of PIK Notes (6) | 0.04 | 0.04 |
| Interest Expense (7) | 0.30 | 0.30 |
| Tax Effect Adjustments (8) | (0.23) | (0.23) |
| Total Adjustments | $ 0.35 | $ 0.35 |
| Modified pro forma net income per diluted share | $ 0.76 | $ 0.79 |
1. Represents an estimate of recurring incremental legal, accounting, insurance and other compliance costs we expect to incur as a public company.
2. Represents the compensation charge on vesting equity grants provided at the time of the IPO.
3. Represents the initial compensation charge taken on common shares issued at the time of the IPO.
4. Represents the write off of the original issue discount associated with the company's senior secured credit facilities and PIK Notes.
5. Represents the write off of deferred financing fees incurred to acquire the company's senior secured credit facilities and PIK Notes.
6. Represents the call premium paid on the redemption of the company's PIK Notes.
7. Represents an adjustment to interest expense assuming post- IPO leverage levels under our new credit facility.
8. Represents the tax impact of adjustments 1 through 7 above.
| THE CHEFS' WAREHOUSE, INC. | ||||
| RECONCILIATION OF EBITDA AND ADJUSTED EBITDA TO NET INCOME | ||||
| THIRTEEN AND TWENTY SIX WEEKS ENDED JUNE 24, 2011 AND JUNE 25, 2010 | ||||
| (unaudited; in thousands except share amounts and per share data) | ||||
| 13 Weeks Ended | 26 Weeks Ended | |||
| 24-Jun-11 | 25-Jun-10 | 24-Jun-11 | 25-Jun-10 | |
| Net Income: | $ 2,653 | $ 4,289 | $ 3,673 | $ 5,825 |
| Interest Expense | 3,343 | 512 | 6,793 | 1,139 |
| Deprecation & amortization | 393 | 502 | 781 | 965 |
| Provision for income taxes | 1,708 | 1,050 | 2,372 | 2,100 |
| EBITDA (7) | $ 8,097 | $ 6,353 | $ 13,619 | $ 10,029 |
| Adjustments: | ||||
| (Gain) on fluctuation of interest | ||||
| rate swap (1) | -- | (247) | (81) | (430) |
| (Gain) / loss on the marking to market | ||||
| of foreign exchange contracts (2) | 67 | 0 | (243) | 0 |
| BGCP annual management fee (3) | 0 | 88 | 0 | 175 |
| Prior years customs duty refund (4) | (202) | 0 | (202) | 0 |
| Harry Wils & Co. acquisition legal fees (5) | 55 | 0 | 55 | 0 |
| Workers Compensation trust settlement (6) | 116 | 0 | 116 | 0 |
| Adjusted EBITDA (7) | $ 8,133 | $ 6,194 | $ 13,264 | $ 9,774 |
1. Represents the gain or loss we experienced on our interest rate swap in each period. When we entered into our interest rate swap in 2005, we did not elect to account for it under hedge accounting rules. As such, the mark to market movement of the swap is recorded through our statement of operations. This interest rate swap expired
2. Represents the unrealized gain or loss we experienced on our Eurodollar collar we entered into in the first quarter of 2011 as a hedge against imported products denominated and paid for in Euros.
3. Represents the management fee paid to our former private equity investor.
4. Represents a refund received for the overpayment of import tariffs since 2007.
5. Represents legal fees incurred for the acquisition of
6. Represents the settlement recorded with the
7. We are presenting EBITDA and Adjusted EBITDA, which are not measurements determined in accordance with the U.S. generally accepted accounting principles, or GAAP, because we believe these measures provide additional metrics to evaluate our operations and which we believe, when considered with both our GAAP results and the reconciliation to net income, provide a more complete understanding of our business than could be obtained absent this disclosure. We use EBITDA and Adjusted EBITDA, together with financial measures prepared in accordance with GAAP, such as revenue and cash flows from operations, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. The use of EBITDA and Adjusted EBITDA as performance measures permits a comparative assessment of our operating performance relative to our performance based upon our GAAP results while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies.
CONTACT: Investor Relations
Don Duffy /Dara Dierks , (718) 684-8415
Media Relations
Ted Lowen , (646) 277-1238
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