Press Releases
The Chefs' Warehouse, Inc. Reports Second Quarter 2013 Financial Results
Financial highlights for the second quarter of 2013 compared to the second quarter of 2012:
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Net sales increased 48.2% to
$170.2 million for the second quarter of 2013 from$114.8 million for the second quarter of 2012. -
Earnings per diluted share available to common stockholders was
$0.25 for the second quarter of 2013 compared to$0.21 for the second quarter of 2012. -
Modified pro forma earnings per diluted share available to common stockholders1 was
$0.26 for the second quarter of 2013 compared to$0.23 for the second quarter of 2012. -
Adjusted EBITDA1 increased 41.5% to
$13.6 million for the second quarter of 2013 from$9.6 million for the second quarter of 2012.
"The second quarter was in line with our expectations as we continued to see sequential improvement from our customers this quarter," said
Second Quarter Fiscal 2013 Results
Net sales for the quarter ended
Gross profit increased approximately 44.5% to
Total operating expenses increased by approximately 50.3% to
Operating income for the second quarter of 2013 was
Net income available to common stockholders was
On a non-GAAP basis, adjusted EBITDA increased approximately 41.5% to
2013 Guidance
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Revenue between
$650.0 million and$690.0 million . -
Adjusted EBITDA between
$46.5 million and$51.0 million . -
Net income between
$18.0 million and$19.8 million . -
Net income per diluted share between
$0.86 and$0.94 . -
Modified pro forma net income per diluted share between
$0.90 and$0.98 .
The above guidance is based upon an estimated effective tax rate of approximately 41.5% and an estimated fully diluted share count of 21.1 million shares.
Conference Call
The Company will host a conference call to discuss second quarter 2013 financial results today at
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 available to common stockholders and modified pro forma EPS to these measures' most directly comparable GAAP measure.
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; the risk of loss of customers due to the fact that the Company does not customarily have long-term contracts with its customers; 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 and deflationary pressures; the Company's ability to successfully identify, obtain financing for and complete acquisitions of other foodservice distributors and to successfully integrate those businesses and realize expected synergies from those acquisitions; increased fuel costs and expectations regarding the use of fuel surcharges; fluctuations in the wholesale prices of beef, poultry and seafood, including increases in these prices as a
result of increases in the cost of feeding and caring for livestock; 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. A more detailed description of these and other risk factors is contained in the Company's most recent annual report on Form 10-K filed with the
About
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CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
THIRTEEN AND TWENTY-SIX WEEKS ENDED |
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(unaudited; in thousands except share amounts and per share data) | ||||
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||
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Net Sales | $ 170,157 | $ 114,825 | $ 309,576 | $ 212,894 |
Cost of Sales | 126,115 | 84,354 | 230,380 | 156,374 |
Gross Profit | 44,042 | 30,471 | 79,196 | 56,520 |
Operating Expenses | 32,987 | 21,954 | 62,243 | 42,945 |
Operating Income | 11,055 | 8,517 | 16,953 | 13,575 |
Interest Expense | 1,903 | 895 | 3,270 | 1,444 |
Loss on Disposal of Assets | 4 | -- | 4 | -- |
Income Before Income Taxes | 9,148 | 7,622 | 13,679 | 12,131 |
Provision for Income Tax Expense | 3,803 | 3,163 | 5,686 | 5,039 |
Net Income Available to Common Stockholders | $ 5,345 | $ 4,459 | $ 7,993 | $ 7,092 |
Net Income Per Share Available to Common Stockholders: | ||||
Basic | $ 0.26 | $ 0.22 | $ 0.38 | $ 0.35 |
Diluted | $ 0.25 | $ 0.21 | $ 0.38 | $ 0.34 |
Weighted Average Common Shares Outstanding: | ||||
Basic | 20,781,745 | 20,541,234 | 20,764,739 | 20,526,293 |
Diluted | 21,018,602 | 20,884,977 | 21,006,260 | 20,876,995 |
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CONDENSED CONSOLIDATED BALANCE SHEET | ||
AS OF |
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(in thousands) | ||
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(unaudited) | 2012 | |
Cash | $ 2,310 | $ 118 |
Accounts receivable, net | 65,507 | 56,694 |
Inventories, net | 55,855 | 40,402 |
Deferred taxes, net | 3,714 | 2,839 |
Prepaid expenses and other current assets | 6,035 | 5,452 |
Total current assets | 133,421 | 105,505 |
Restricted cash | 7,587 | 11,008 |
Equipment and leasehold improvements, net | 15,554 | 9,365 |
Software costs, net | 214 | 328 |
Goodwill | 69,073 | 45,359 |
Intangible assets, net | 45,601 | 35,708 |
Other assets | 3,872 | 2,861 |
Total assets | 275,322 | 210,134 |
Accounts payable | 44,200 | 33,718 |
Accrued liabilities | 8,213 | 5,291 |
Accrued compensation | 3,941 | 3,519 |
Current portion of long-term debt | 7,091 | 5,175 |
Total current liabilities | 63,445 | 47,703 |
Long-term debt, net of current portion | 154,921 | 119,352 |
Deferred taxes, net | 6,911 | 2,552 |
Other liabilities | 2,581 | 1,245 |
Total liabilities | 227,858 | 170,852 |
Preferred stock | -- | -- |
Common stock | 212 | 210 |
Additional paid in capital | 21,530 | 21,006 |
Cumulative foreign currency translation adjustment | (337) | -- |
Retained earnings | 26,059 | 18,066 |
Stockholders' equity | 47,464 | 39,282 |
Total liabilities and stockholders' equity | $ 275,322 | $ 210,134 |
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CONDENSED CONSOLIDATED CASH FLOW STATEMENT | ||
FOR THE TWENTY-SIX WEEKS ENDED JUNE 28, 2013 AND |
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(unaudited; in thousands) | ||
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Cash flows from operating activities: | ||
Net Income | $ 7,993 | $ 7,092 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 3,573 | 1,382 |
Provision for allowance for doubtful accounts | 374 | 344 |
Deferred credits | 229 | 117 |
Deferred taxes | 338 | 418 |
Write-off of deferred financing fees | -- | 237 |
Amortization of deferred financing fees | 205 | 154 |
Stock compensation | 589 | 360 |
Change in fair value of earnout | 30 | -- |
Loss on asset disposal | 4 | -- |
Changes in assets and liabilities, net of acquisitions: | ||
Accounts receivable | (618) | (208) |
Inventories | 554 | (1,680) |
Prepaid expenses and other current assets | 839 | (515) |
Accounts payable and accrued liabilities | 6,917 | (187) |
Other assets | (209) | (7) |
Net cash provided by operating activities | 20,818 | 7,507 |
Cash flows from investing activities: | ||
Capital expenditures | (3,301) | (1,968) |
Cash paid for acquisitions | (54,028) | (19,548) |
Net cash used in investing activities | (57,329) | (21,516) |
Cash flows from financing activities: | ||
Change in restricted cash | 3,421 | (2) |
Proceeds from senior secured term loan | -- | 40,000 |
Proceeds from senior secured notes | 100,000 | -- |
Payment of debt | (3,565) | (29,054) |
Payment of deferred financing fees | (1,201) | (1,755) |
Borrowings under revolving credit line | 57,200 | 160,758 |
Payments under revolving credit line | (117,200) | (155,535) |
Surrender of shares to pay withholding taxes | (63) | -- |
Net cash provided by financing activities | 38,592 | 14,412 |
Effect of foreign currency translation on cash and cash equivalents | 111 | -- |
Net increase in cash and cash equivalents | 2,192 | 403 |
Cash and cash equivalents at beginning of period | 118 | 2,033 |
Cash and cash equivalents at end of period | $ 2,310 | $ 2,436 |
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RECONCILIATION OF EBITDA AND ADJUSTED EBITDA TO NET INCOME | ||||
THIRTEEN AND TWENTY-SIX WEEKS ENDED |
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(unaudited; in thousands) | ||||
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||
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Net Income: | $ 5,345 | $ 4,459 | $ 7,993 | $ 7,092 |
Interest expense | 1,903 | 895 | 3,270 | 1,444 |
Depreciation | 603 | 499 | 1,272 | 933 |
Amortization | 1,226 | 277 | 2,301 | 449 |
Provision for income tax expense | 3,803 | 3,163 | 5,686 | 5,039 |
EBITDA (1) | 12,880 | 9,293 | 20,522 | 14,957 |
Adjustments: | ||||
Stock compensation (2) | 300 | 102 | 589 | 360 |
Duplicate rent(3) | 371 | 184 | 718 | 184 |
Adjusted EBITDA (1) | $ 13,551 | $ 9,579 | $ 21,829 | $ 15,501 |
1. 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 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. | ||||
2. Represents non-cash stock compensation expense associated with awards of restricted shares of our common stock to our key employees and our independent directors. | ||||
3. Represents rent expense and other facility costs, including utilities and insurance, incurred on the renovation and expansion of our |
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RECONCILIATION OF MODIFIED PRO FORMA NET INCOME TO NET INCOME | ||||
THIRTEEN AND TWENTY-SIX WEEKS ENDED |
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(unaudited; in thousands except share amounts and per share data) | ||||
Adjustments to Reconcile Modified Pro Forma Net Income to Net Income (1) | ||||
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||
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Net Income Available to Common Stockholders | $ 5,345 | $ 4,459 | $ 7,993 | $ 7,092 |
Duplicate Rent (2) | 371 | 184 | 718 | 184 |
Write-off (adjustment) of Deferred Financing Fees (3) | (134) | 237 | (134) | 237 |
Tax Effect Adjustments (4) | (98) | (175) | (242) | (175) |
Total Adjustments | 139 | 246 | 342 | 246 |
Modified Pro Forma Net Income Available to Common Stockholders | $ 5,484 | $ 4,705 | $ 8,335 | $ 7,338 |
Diluted Earnings per Share - Modified Pro Forma | $ 0.26 | $ 0.23 | $ 0.40 | $ 0.35 |
Diluted Shares Outstanding - Modified Pro Forma (5) | 21,018,602 | 20,884,977 | 21,006,260 | 20,876,995 |
1. We are presenting modified pro forma net income available to common stockholders 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 available to common stockholders, provide a more complete understanding of our business than could be obtained absent this disclosure. We use modified pro forma net income available to common stockholders 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 available to common stockholders 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 items that vary from period to period without any correlation to core operating performance. | ||||
2. Represents rent expense and other facility costs, including utilities and insurance, incurred on the renovation and expansion of our |
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3. Represents write-off (adjustment) of deferred financing fees in connection with the refinancing of our senior secured credit facilities in |
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4. Represents the tax impact of adjustments 2 and 3 above. | ||||
5. Represents diluted shares outstanding of our common stock. |
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2013 FULLY DILUTED EPS GUIDANCE RECONCILIATION TO 2013 MODIFIED PRO FORMA | ||
FULLY DILUTED EPS GUIDANCE(1) | ||
Low-End | High-End | |
Guidance | Guidance | |
Net income per diluted share | 0.86 | 0.94 |
Duplicate facility rent(2) | 0.04 | 0.04 |
Modified pro forma net income per diluted share | 0.90 | 0.98 |
1. Guidance is based upon an estimated effective tax rate of 41.5% and an estimated fully diluted share count of 21.1 million shares. | ||
2. Represents rent and other facility costs, including utilities and insurance, expected to be incurred in connection with the renovation and expansion of our |
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RECONCILIATION OF ADJUSTED EBITDA GUIDANCE FOR FISCAL 2013 | ||
(unaudited; in thousands) | ||
Low-End | High-End | |
Guidance | Guidance | |
Net Income: | $ 18,000 | $ 19,800 |
Provision for income tax expense | 12,700 | 14,000 |
Depreciation & amortization | 6,200 | 7,000 |
Interest expense | 7,000 | 7,500 |
EBITDA (1) | 43,900 | 48,300 |
Adjustments: | ||
Stock compensation (2) | 1,100 | 1,200 |
Duplicate rent(3) | 1,500 | 1,500 |
Adjusted EBITDA (1) | $ 46,500 | $ 51,000 |
1. We are presenting EBITDA and Adjusted EBITDA, 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 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 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. | ||
2. Represents non-cash stock compensation expense expected to be incurred in connection with awards of restricted shares of our common stock to our key employees and our independent directors. | ||
3. Represents rent expense and other facility costs, including utilities and insurance, expected to be incurred on the renovation and expansion of our |
CONTACT: Investor RelationsSource:John Austin , (718) 684-8415
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