PFG: Reports First-Quarter Fiscal 2021 Results

Richmond / VA. (pfg) Performance Food Group Company (PFG) announced its fourth-quarter and full-year fiscal 2022 business results. »PFG closed out fiscal 2022 in a position of strength, with strong net sales and profit growth,« said George Holm, PFG’s Chairman and Chief Executive Officer. »Our focus on driving independent restaurant growth continues to improve our customer mix, producing better margins and high-quality earnings. Vistar has seen solid progress, as several important channels continue to recover and provide a tailwind to our financial results. In Convenience, we continue to bring on new accounts and win business through the strength of our combined organization. The integration of Core-Mark has progressed smoothly and remains on schedule. As a result of the positive momentum in all three business segments, today, we are able to provide strong financial guidance for fiscal 2023. We believe our business is well positioned to achieve our objectives and is equipped to succeed in the operating environment.«

This earnings release includes several metrics, including Ebitda, Adjusted Ebitda, Adjusted Diluted Earnings per Share and Free Cash Flow that are not calculated in accordance with Generally Accepted Accounting Principles in the U.S. (»GAAP«). Please see »Statement Regarding Non-GAAP Financial Measures« at the end of this release for the definitions of such non-GAAP financial measures and reconciliations of such non-GAAP financial measures to their respective most comparable financial measures calculated in accordance with GAAP.

Fourth-Quarter Fiscal 2022 Financial Summary

Total case volume increased 16.7 percent for the fourth quarter of fiscal 2022 compared to the prior year period. Total case volume included Core-Mark Holding Company, Inc. (»Core-Mark«) and a 3.0 percent decrease in organic independent cases. Excluding the impact of the 53rd week in fiscal 2021, total organic independent case volume increased 4.7 percent in the fourth quarter of fiscal 2022 compared to the prior year period.

Net sales for the fourth quarter of fiscal 2022 grew 56.8 percent to USD 14.6 billion compared to the prior year period. The increase in net sales was primarily attributable to the acquisition of Core-Mark and an increase in selling price per case as a result of inflation, partially offset by the 53rd week in fiscal year 2021. The acquisition of Core-Mark contributed USD 4.6 billion of net sales for the fourth quarter of fiscal 2022. Overall product cost inflation for the Company was approximately 13.6 percent. Net sales for the extra week in fiscal 2021 were approximately USD 664.6 million.

Gross profit for the fourth quarter of fiscal 2022 grew 39.8 percent to USD 1.5 billion compared to the prior year period. The gross profit increase was led by the acquisition of Core-Mark and an increase in gross profit per case in Foodservice driven by growth in the independent channel, partially offset by a USD 67.6 million increase in the last-in-first-out (“LIFO”) inventory reserve and the 53rd week in fiscal 2021. The Core-Mark acquisition contributed gross profit of USD 269.1 million in the fourth quarter of fiscal 2022. The Company estimates gross profit for the extra week in fiscal 2021 was approximately USD 76.1 million.

Operating expenses rose 35.7 percent to USD 1.3 billion in the fourth quarter of fiscal 2022 compared to the prior year period. The increase in operating expenses was primarily due to the acquisition of Core-Mark, partially offset by the 53rd week in fiscal 2021. Core-Mark contributed USD 249.8 million of operating expenses in the fourth quarter of fiscal 2022, excluding depreciation and amortization. Operating expenses also increased as a result of an increase in personnel expenses, workers’ compensation and automobile insurance expenses, and fuel expense due to higher fuel prices. In the fourth quarter of fiscal 2022, there was a USD 21.1 million decrease in temporary contract labor costs and associated travel expenses as the Company’s use of temporary contract labor has normalized to a level consistent with historical usage. Depreciation and amortization increased USD 31.7 million primarily as a result of recent acquisitions. The Company estimates operating expenses for the 53rd week in fiscal 2021 were approximately USD 70.4 million.

Net income for the fourth quarter of fiscal 2022 increased 142.0 percent year-over-year to USD 76.0 million. The increase was primarily a result of the USD 72.2 million increase in operating profit, partially offset by a USD 27.7 million increase in income tax expense. The effective tax rate in the fourth quarter of fiscal 2022 was approximately 34.6 percent compared to 28.5 percent in the fourth quarter of fiscal 2021. The effective tax rate for the fourth quarter of fiscal 2022 differed from the prior year period due to the increase of non-deductible expenses as a percentage of book income and the decrease in deductible stock-based compensation as a percentage of book income.

Ebitda increased 65.1 percent to USD 287.5 million in the fourth quarter of fiscal 2022 compared to the prior year period. For the quarter, Adjusted Ebitda rose 69.3 percent to USD 357.1 million compared to the prior year period. Adjusted Ebitda for the extra week in the fourth quarter of fiscal 2021 was approximately USD 15.0 million.

Diluted EPS increased 113.0 percent to USD 0.49 per share in the fourth quarter of fiscal 2022 compared to the prior year period. Adjusted Diluted EPS increased 91.1 percent to USD 1.07 per share in the fourth quarter of fiscal 2022 compared to the prior year period.

For additional information please read the company’s PDF file below (146 KB):

20220820-PFGC-Q4-2022
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