Press Releases
The Chefs' Warehouse, Inc. Reports Third Quarter 2011 Financial Results
Financial highlights for the third quarter of 2011 compared to the third quarter of 2010:
-
Net sales increased 20% to
$101.7 million for the third quarter of 2011 from$84.9 million for the third quarter of 2010. -
Gross profit increased 21% to
$26.6 million for the third quarter of 2011 from$22.1 million for the third quarter of 2010. -
Earnings (loss) per diluted share available to common stockholders was
$(0.06) for the third quarter of 2011 compared to$0.13 per diluted share for the third quarter of 2010. -
Modified pro forma earnings per diluted share available to common stockholders1, or EPS, increased 12% to
$0.19 per diluted share for the third quarter of 2011 from$0.17 per diluted share for the third quarter of 2010. -
Adjusted EBITDA1 increased 17% to
$7.9 million for the third quarter of 2011 from$6.7 million for the third quarter of 2010.
"We are very pleased with our third quarter results which reflect continued momentum from the first half of the year, despite the financial impact from Hurricane Irene, which negatively impacted our GAAP EPS and modified pro forma EPS by approximately
Third Quarter Fiscal 2011 Results
Net sales for the quarter ended
Gross profit increased approximately 21% to
Operating income decreased to
Net loss available to common stockholders was
On a non-GAAP basis, modified pro forma net income available to common stockholders1 was
The Company estimates that Hurricane Irene accounted for approximately
39 Weeks Ended
Net sales for the 39 weeks ended
Gross profit increased approximately 21% to
Net income available to common stockholders was
On a non-GAAP basis, modified pro forma net income available to common stockholders was
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 third 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
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.
|
|
||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| GAAP PRESENTATION WITH RECONCILIATION TO MODIFIED PRO FORMA RESULTS | ||||
|
THIRTEEN AND THIRTY NINE WEEKS ENDED |
||||
| (unaudited; in thousands except share amounts and per share data) | ||||
| 13 Weeks Ended | 39 Weeks Ended | |||
|
|
|
|
|
|
| Sales | $ 101,681 | $ 84,928 | $ 284,118 | $ 238,542 |
| Cost of Sales | 75,051 | 62,865 | 209,199 | 176,552 |
| Gross Profit | 26,630 | 22,063 | 74,919 | 61,990 |
| Operating Expenses | 21,290 | 15,810 | 56,820 | 47,102 |
| Operating Income | 5,340 | 6,253 | 18,099 | 14,888 |
| Gain on Interest Rate Swap | -- | 228 | 81 | 658 |
| Interest Expense | 7,249 | 472 | 14,042 | 1,612 |
| Loss on Sale of Assets | -- | -- | 3 | -- |
| Pretax (loss) Income | (1,909) | 6,009 | 4,135 | 13,934 |
| Provision for taxes | (724) | 1,600 | 1,648 | 3,700 |
| Net (loss) Income | $ (1,185) | $ 4,409 | $ 2,487 | $ 10,234 |
| Deemed Dividend Accretion on Class A Units | -- | (1,322) | -- | (3,682) |
| Net (loss) Income attributable to common stockholders | $ (1,185) | $ 3,087 | $ 2,487 | $ 6,552 |
| Net (loss) Income per share attributable to common stockholders | ||||
| Basic | $ (0.06) | $ 0.14 | $ 0.15 | $ 0.29 |
| Diluted | $ (0.06) | $ 0.13 | $ 0.15 | $ 0.28 |
| Weighted average common shares outstanding | ||||
| Basic | 18,696,304 | 22,721,388 | 16,547,077 | 22,596,440 |
| Diluted | 18,696,304 | 23,356,322 | 17,024,121 | 23,370,222 |
| Adjustments to Reconcile GAAP to Modified Pro Forma Results (1) | ||||
| Net (loss) Income attributable to common stockholders | $ (1,185) | $ 3,087 | $ 2,487 | $ 6,552 |
| Management Fee(2) | -- | 89 | -- | 262 |
| Incremental Public Company Costs(3) | (100) | (350) | (750) | (1,050) |
| Stock Compensation Charges(4) | 1,822 | -- | 1,592 | -- |
| Interest Expense(5) | 1,349 | -- | 7,292 | -- |
| Deferred Financing Fee Write-Off(6) | 2,860 | -- | 2,860 | -- |
| Call Premium(7) | 827 | -- | 827 | -- |
| Original Issue Discount Write-Off(8) | 1,708 | -- | 1,708 | -- |
| Effective Tax Rate @ 39%(9) | -- | (641) | -- | (1,426) |
| Tax Effect Adjustments(10) | (3,281) | -- | (5,256) | -- |
| Deemed Dividend Accretion on Class A Units(11) | -- | 1,322 | -- | 3,682 |
| Total Adjustments | 5,185 | 420 | 8,273 | 1,468 |
| Modified Pro Forma Net Income | $ 4,000 | $ 3,507 | $ 10,760 | $ 8,020 |
| Diluted EPS — Modified Pro Forma | $ 0.19 | $ 0.17 | $ 0.52 | $ 0.38 |
| Diluted Shares Outstanding - Modified Pro Forma (12) | 20,834,938 | 20,834,938 | 20,834,938 | 20,834,938 |
| 1. We are presenting modified pro forma net income attributable 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 attributable 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 attributable 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 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. | ||||
| 2. Represents a management fee paid to our private equity investor. | ||||
| 3. Represents an estimate of recurring incremental legal, accounting, insurance and other compliance costs we expect to incur as a public company. | ||||
| 4. Represents the non-cash compensation charge associated with a restricted share award to two key employees, 50% of which vested upon grant, and 50% of which vests ratably over four years. | ||||
| 5. Represents an adjustment to interest expense assuming post-IPO leverage levels under our new senior secured credit facility. | ||||
| 6. Represents a non-cash charge associated with the write-off of deferred financing fees upon refinancing our senior debt facilities in connection with our IPO. | ||||
| 7. Represents a call premium payable upon retirement of our senior secured notes in connection with our IPO. | ||||
| 8. Represents a non-cash charge associated with the write-off of original issue discount upon retirement of our senior secured term loan in connection with our IPO. | ||||
| 9. Represents a tax adjustment to normalize the 2010 effective tax rate. | ||||
| 10. Represents the tax impact of adjustments 2 through 8 above. | ||||
|
11. Represents the deemed dividend accretion on our Class A units, which we redeemed in |
||||
| 12. Represents diluted shares outstanding after giving effect to our IPO and the equity grants described in note 4. | ||||
| 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 |
| Share Count Difference(1) | (0.05) | (0.05) |
| Incremental Public Company Costs (2) | (0.04) | (0.04) |
| Stock Compensation Charges (3) | (0.01) | (0.01) |
| Initial Stock Compensation Charge (4) | 0.09 | 0.09 |
| Write Off of Original Issue Discount (5) | 0.08 | 0.08 |
| Write Off of Deferred Financing Fee (6) | 0.14 | 0.14 |
| Call Premium Paid on Retirement of PIK Notes (7) | 0.04 | 0.04 |
| Interest Expense (8) | 0.35 | 0.35 |
| Tax Effect Adjustments (9) | (0.25) | (0.25) |
| Total Adjustments | $ 0.35 | $ 0.35 |
| Modified pro forma net income per diluted share | $ 0.76 | $ 0.79 |
| 1. Represents difference between GAAP and modified pro forma fully diluted share counts. | ||
| 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 non-cash compensation charge associated with the portion of a restricted share award to two key employees that did not vest immediately upon grant. | ||
| 4. Represents the non-cash compensation charge associated with the portion of a restricted share award to two key employees that vested upon grant. | ||
| 5. Represents the write off of the original issue discount associated with our senior secured credit facilities and senior secured notes. | ||
| 6. Represents the write off of deferred financing fees incurred to acquire our senior secured credit facilities and senior secured notes. | ||
| 7. Represents the call premium paid on the redemption of our senior secured notes in connection with our IPO. | ||
| 8. Represents an adjustment to interest expense assuming post-IPO leverage levels under our new credit facility. | ||
| 9. Represents the tax impact of adjustments 2 through 8 above. | ||
|
|
||||
| RECONCILIATION OF EBITDA AND ADJUSTED EBITDA TO NET (LOSS) INCOME | ||||
|
THIRTEEN AND THIRTY NINE WEEKS ENDED |
||||
| (unaudited; in thousands except share amounts and per share data) | ||||
| 13 Weeks Ended | 39 Weeks Ended | |||
|
|
|
|
|
|
| Net (Loss) Income: | $ (1,185) | $ 4,409 | $ 2,487 | $ 10,234 |
| Interest Expense | 7,249 | 472 | 14,042 | 1,612 |
| Deprecation & amortization | 429 | 406 | 1,211 | 1,371 |
| Provision for income taxes | (724) | 1,600 | 1,648 | 3,700 |
| EBITDA (1) | $ 5,769 | $ 6,887 | $ 19,388 | $ 16,917 |
| Adjustments: | ||||
| Gain on fluctuation of interest rate swap (2) | -- | (228) | (81) | (658) |
| (Gain) / loss on the marking to market of foreign exchange contracts (3) | 206 | -- | (37) | -- |
| Management fee (4) | -- | 89 | -- | 262 |
| Prior years customs duty refund (5) | -- | -- | (202) | -- |
|
|
-- | -- | 55 | -- |
| Stock Compensation (7) | 1,939 | -- | 1,939 | -- |
| Workers Compensation trust settlement (8) | -- | -- | 116 | -- |
| Adjusted EBITDA (1) | $ 7,914 | $ 6,748 | $ 21,178 | $ 16,521 |
| 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 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. | ||||
|
2. 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 |
||||
| 3. 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. | ||||
| 4. Represents the management fee paid to our former private equity investor. | ||||
| 5. Represents a refund received for the overpayment of import tariffs since 2007. | ||||
|
6. Represents legal fees incurred for the acquisition of |
||||
| 7. Represents non-cash stock compensation expense associated with an award of restricted shares of our common stock to two key employees immediately following consummation of our IPO. | ||||
|
8. Represents the settlement recorded with the |
||||
CONTACT: Investor Relations
Don Duffy /Dara Dierks , (718) 684-8415
Media Relations
Ted Lowen , (646) 277-1238
Source: News Provided by Acquire Media