Press Releases
The Chefs' Warehouse Reports Third Quarter 2016 Financial Results
Financial highlights for the third quarter of 2016 compared to the third quarter of 2015:
- Net sales increased 7.8% to
$297.9 million for the third quarter of 2016 from$276.3 million for the third quarter of 2015. - GAAP net income was
$1.3 million or$0.05 per diluted share, for the third quarter of 2016 compared to$5.2 million , or$0.20 per diluted share, in the third quarter of 2015. - Modified pro forma earnings per diluted share[1] was
$0.07 for the third quarter of 2016 compared to$0.21 for the third quarter of 2015. - Adjusted EBITDA1 was
$14.6 million for the third quarter of 2016 compared to$17.6 million for the third quarter of 2015.
"We are pleased with our third quarter results which came in slightly ahead of our expectations, despite the continued soft industry backdrop and deflationary trend in food costs. Our business model continues to demonstrate our ability to take share. Organic case growth in our specialty division remained strong at 7.5%, which was muted by sequentially higher deflation. We are also pleased with our progress at
Third Quarter Fiscal 2016 Results
Net sales for the quarter ended
Gross profit increased approximately 6.0% to
Total
operating expenses increased by approximately 15.3% to
Operating income for the third quarter of 2016 was
Interest expense increased to
The net income for the third quarter of 2016 was
On a non-GAAP basis, adjusted EBITDA1 was
Full Year 2016 Guidance
Based on third quarter results as well as current trends in the business, the Company is updating its financial guidance for fiscal year 2016, which includes a 53rd week. The Company now expects the following:
- Net sales between
$1.185 billion and$1.195 billion - Net loss between
$2.5 million and$1.0 million -
Net loss per diluted share between
$0.07 and$0.02 - Adjusted EBITDA between
$57.5 million and$61.0 million - Modified pro forma net income per diluted share between
$0.41 and$0.46
This guidance is based on an effective tax rate of approximately 41.5% and fully diluted shares of approximately 27.25 million shares. For purposes of calculating the modified pro forma diluted EPS the Company has assumed that the convertible debt will be dilutive for the full year and as such the Company added back
Third Quarter 2016 Earnings Conference Call
The Company will host a
conference call to discuss third quarter 2016 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 ability to successfully deploy its operational initiatives to achieve
synergies from the acquisition of the
About The Chefs' Warehouse
___________________________
1Please 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 these measures' most directly comparable GAAP measure.
THE | |||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
THIRTEEN AND THIRTY-NINE WEEKS ENDED | |||||||||||||||||
(unaudited, in thousands except share amounts and per share data) | |||||||||||||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||
September 23, 2016 | September 25, 2015 | September 23, 2016 | September 25, 2015 | ||||||||||||||
$ | 297,917 | $ | 276,306 | $ | 849,962 | $ | 753,789 | ||||||||||
Cost of Sales | 223,525 | 206,134 | 637,809 | 562,146 | |||||||||||||
Gross Profit | 74,392 | 70,172 | 212,153 | 191,643 | |||||||||||||
Operating Expenses | 66,106 | 57,319 | 187,318 | 166,316 | |||||||||||||
Operating Income | 8,286 | 12,853 | 24,835 | 25,327 | |||||||||||||
Interest Expense | 5,947 | 3,902 | 35,271 | 9,312 | |||||||||||||
Loss (Gain) on Disposal of Assets | 40 | 8 | 43 | (340 | ) | ||||||||||||
Income (Loss) Before Income Taxes | 2,299 | 8,943 | (10,479 | ) | 16,355 | ||||||||||||
Provision for Income Tax Expense | 956 | 3,719 | (4,360 | ) | 6,801 | ||||||||||||
Net Income (Loss) | $ | 1,343 | $ | 5,224 | $ | (6,119 | ) | $ | 9,554 | ||||||||
Net Income (Loss) Per Share: | |||||||||||||||||
Basic | $ | 0.05 | $ | 0.20 | $ | (0.24 | ) | $ | 0.38 | ||||||||
Diluted | $ | 0.05 | $ | 0.20 | $ | (0.24 | ) | $ | 0.37 | ||||||||
Weighted Average Common Shares Outstanding: | |||||||||||||||||
Basic | 25,936,832 | 25,864,638 | 25,911,278 | 25,419,349 | |||||||||||||
Diluted | 25,977,171 | 27,154,770 | 25,911,278 | 26,275,597 | |||||||||||||
THE | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
AS OF | ||||||||
(in thousands) | ||||||||
September 23, 2016 |
December 25, 2015 | |||||||
(unaudited) | ||||||||
Cash | $ | 26,191 | $ | 2,454 | ||||
Accounts receivable, net | 121,493 | 124,139 | ||||||
Inventories, net | 88,979 | 92,758 | ||||||
Deferred taxes, net | 5,502 | 5,256 | ||||||
Prepaid expenses and other current assets | 23,090 | 9,164 | ||||||
Total current assets | 265,255 | 233,771 | ||||||
Equipment and leasehold improvements, net | 59,275 | 54,283 | ||||||
Software costs, net | 6,337 | 4,511 | ||||||
163,806 | 155,816 | |||||||
Intangible assets, net | 133,904 | 132,211 | ||||||
Other assets | 3,703 | 3,089 | ||||||
Total assets | $ | 632,280 | $ | 583,681 | ||||
Accounts payable | $ | 59,163 | $ | 64,888 | ||||
Accrued liabilities | 22,064 | 24,258 | ||||||
Accrued compensation | 7,968 | 7,732 | ||||||
Current portion of long-term debt | 13,615 | 6,030 | ||||||
Total current liabilities | 102,810 | 102,908 | ||||||
Long-term debt, net of current portion | 319,005 | 266,207 | ||||||
Deferred taxes, net | 9,974 | 9,316 | ||||||
Other liabilities | 16,254 | 17,286 | ||||||
Total liabilities | 448,043 | 395,717 | ||||||
Preferred stock | - | - | ||||||
Common stock | 263 | 263 | ||||||
Additional paid in capital | 126,528 | 125,170 | ||||||
Cumulative foreign currency translation adjustment | (1,915 | ) | (2,949 | ) | ||||
Retained earnings | 59,361 | 65,480 | ||||||
Stockholders' equity | 184,237 | 187,964 | ||||||
Total liabilities and stockholders' equity | $ | 632,280 | $ | 583,681 | ||||
THE | |||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||
FOR THE THIRTY-NINE WEEKS ENDED | |||||||
(unaudited; in thousands) | |||||||
September 23, 2016 | September 25, 2015 | ||||||
Cash flows from operating activities: | |||||||
Net Income (Loss) | $ | (6,119 | ) | $ | 9,554 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation | 4,966 | 4,219 | |||||
Amortization | 8,704 | 6,754 | |||||
Provision for allowance for doubtful accounts | 2,674 | 2,018 | |||||
Deferred credits | 1,340 | 475 | |||||
Deferred taxes | 1,169 | (1,760 | ) | ||||
Amortization of deferred financing fees | 1,209 | 908 | |||||
Loss on debt extinguishment | 22,310 | - | |||||
Stock compensation | 1,909 | 2,869 | |||||
Change in fair value of earn-out liability | (1,601 | ) | 307 | ||||
Loss (gain) on disposal of assets | 43 | (340 | ) | ||||
Changes in assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | 4,627 | (3,294 | ) | ||||
Inventories | 5,638 | (6,182 | ) | ||||
Prepaid expenses and other current assets | (15,612 | ) | 563 | ||||
Accounts payable and accrued liabilities | (8,424 | ) | 1,124 | ||||
Other liabilities | (1,186 | ) | (85 | ) | |||
Other assets | (439 | ) | (385 | ) | |||
Net cash provided by operating activities | 21,208 | 16,745 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (11,532 | ) | (19,247 | ) | |||
Proceeds from asset disposals | - | 16,187 | |||||
Cash paid for acquisitions, net of cash received | (19,742 | ) | (123,831 | ) | |||
Net cash used in investing activities | (31,274 | ) | (126,891 | ) | |||
Cash flows from financing activities: | |||||||
Payment of debt | (156,655 | ) | (7,351 | ) | |||
Proceeds from issuance of debt | 315,810 | 25,000 | |||||
Net change in revolving credit facility | (93,382 | ) | 94,000 | ||||
Cash paid for deferred financing fees | (7,691 | ) | (628 | ) | |||
Debt prepayment penalty and other fees | (21,219 | ) | - | ||||
Cash paid for contingent earn-out liability | (2,660 | ) | (1,420 | ) | |||
Surrender of shares to pay withholding taxes | (552 | ) | (1,060 | ) | |||
Net cash provided by financing activities | 33,651 | 108,541 | |||||
Effect of foreign currency translation adjustment on cash and cash equivalents | 152 | (238 | ) | ||||
Net decrease in cash and cash equivalents | 23,737 | (1,843 | ) | ||||
Cash and cash equivalents at beginning of period | 2,454 | 3,328 | |||||
Cash and cash equivalents at end of period | $ | 26,191 | $ | 1,485 | |||
THE | |||||||||||||||
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA TO NET INCOME | |||||||||||||||
THIRTEEN AND THIRTY-NINE WEEKS ENDED | |||||||||||||||
(unaudited; in thousands) | |||||||||||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||
September 23, 2016 | September 25, 2015 | September 23, 2016 | September 25, 2015 | ||||||||||||
Net Income (Loss): | $ | 1,343 | $ | 5,224 | $ | (6,119 | ) | $ | 9,554 | ||||||
Interest expense (2) | 5,947 | 3,902 | 35,271 | 9,312 | |||||||||||
Depreciation | 2,029 | 1,625 | 4,966 | 4,219 | |||||||||||
Amortization | 3,137 | 2,165 | 8,704 | 6,754 | |||||||||||
Provision for income tax expense | 956 | 3,719 | (4,360 | ) | 6,801 | ||||||||||
EBITDA (1) | 13,412 | 16,635 | 38,462 | 36,640 | |||||||||||
Adjustments: | |||||||||||||||
Stock compensation (3) | 540 | 449 | 1,909 | 1,219 | |||||||||||
Duplicate rent (4) | 196 | 131 | 628 | 846 | |||||||||||
Integration and deal costs/third party transaction costs (5) | 152 | 163 | 424 | 4,476 | |||||||||||
Change in fair value of earn-out obligation (6) | 215 | 60 | (1,601 | ) | 307 | ||||||||||
Moving expenses (7) | 99 | 122 | 511 | 395 | |||||||||||
Adjusted EBITDA (1) | $ | 14,614 | $ | 17,560 | $ | 40,333 | $ | 43,883 | |||||||
1. We are presenting EBITDA and Adjusted EBITDA, which are not measurements determined in accordance with the | |||||||||||||||
2. Interest expense includes the write-off of deferred financing fees for the refinancing of our term loan and revolving credit facility and the prepayment penalties for the early extinguishment of our senior secured notes. | |||||||||||||||
3. Represents non-cash stock compensation expense associated with awards of restricted shares of our common stock and stock options to our key employees and our independent directors. | |||||||||||||||
4. Represents duplicate rent expense for our | |||||||||||||||
5. Represents transaction related costs incurred to complete and integrate acquisitions, including due diligence, legal, integration and cash and non-cash stock transaction bonuses. | |||||||||||||||
6. Represents the non-cash change in fair value of contingent earn-out liabilities related to our acquisitions. | |||||||||||||||
7. Represents moving expenses for the consolidation of our | |||||||||||||||
THE | |||||||||||||||
RECONCILIATION OF MODIFIED PRO FORMA NET INCOME TO NET INCOME | |||||||||||||||
THIRTEEN AND THIRTY-NINE WEEKS ENDED | |||||||||||||||
(unaudited; in thousands except share amounts and per share data) | |||||||||||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||
September 23, 2016 | September 25, 2015 | 2016 | September 25, 2015 | ||||||||||||
Net Income (Loss) | $ | 1,343 | $ | 5,224 | $ | (6,119 | ) | $ | 9,554 | ||||||
Adjustments to Reconcile Modified Pro Forma Net Income to Net Income (1): | |||||||||||||||
Duplicate rent (2) | 196 | 131 | 628 | 846 | |||||||||||
Integration and deal costs/third party transaction costs (3) | 152 | 163 | 424 | 4,476 | |||||||||||
Moving expenses (4) | 99 | 122 | 511 | 395 | |||||||||||
Change in fair value of earnout obligation (5) | 215 | 60 | (1,601 | ) | 307 | ||||||||||
Debt refinance costs (6) | - | - | 22,310 | - | |||||||||||
Tax effect of adjustments (7) | (275 | ) | (198 | ) | (9,265 | ) | (2,506 | ) | |||||||
Total Adjustments | 387 | 278 | 13,007 | 3,518 | |||||||||||
Modified Pro Forma Net Income | $ | 1,730 | $ | 5,502 | $ | 6,888 | $ | 13,072 | |||||||
Diluted Earnings per Share - Modified Pro Forma | $ | 0.07 | $ | 0.21 | $ | 0.27 | $ | 0.51 | |||||||
Diluted Shares Outstanding - Modified Pro Forma | 25,977,171 | 27,154,770 | 25,911,278 | 26,275,597 | |||||||||||
1. We are presenting modified pro forma net income and modified pro forma EPS, which are not measurements determined in accordance with | |||||||||||||||
2. Represents duplicate rent expense for our | |||||||||||||||
3. Represents transaction related costs incurred to complete and integrate acquisitions, including due diligence, legal, integration and cash and non-cash stock transaction bonuses. | |||||||||||||||
4. Represents moving expenses for the consolidation of our | |||||||||||||||
5. Represents the non-cash change in fair value of contingent earn-out liabilities related to our acquisitions. | |||||||||||||||
6. Represents write-off of deferred financing fees for the refinancing of our term loan and revolving credit facility and the prepayment penalties for settlement of our senior secured notes. | |||||||||||||||
7. Represents the tax effect of items 2 through 6 above. | |||||||||||||||
THE | ||||||||
RECONCILIATION OF ADJUSTED EBITDA GUIDANCE FOR FISCAL 2016 (1) | ||||||||
(unaudited; in thousands) | ||||||||
Low-End Guidance | High-End Guidance | |||||||
Net Loss: | $ | (2,500 | ) | $ | (1,000 | ) | ||
Provision for income tax expense | (1,800 | ) | (700 | ) | ||||
Depreciation & amortization | 18,000 | 18,000 | ||||||
Interest expense (2) | 41,500 | 42,000 | ||||||
EBITDA (1) | 55,200 | 58,300 | ||||||
Adjustments: | ||||||||
Stock compensation (3) | 2,400 | 2,500 | ||||||
Duplicate occupancy and moving costs (4) | 1,000 | 1,200 | ||||||
Integration and deal costs (5) | 400 | 500 | ||||||
Change in fair value of earn-out obligations (6) | (1,500 | ) | (1,500 | ) | ||||
Adjusted EBITDA (1) | $ | 57,500 | $ | 61,000 | ||||
1. We are presenting estimated EBITDA and Adjusted EBITDA, which are not measurements determined in accordance with the | ||||||||
2. Interest expense includes the write -off of deferred financing fees for the refinancing of our term loan and revolving credit facility and the prepayment penalties for the early extinguishment of our senior secured notes. | ||||||||
3. Represents non-cash stock compensation expense expected to be associated with awards of restricted shares of our common stock to our key employees and our independent directors. | ||||||||
4. Represents occupancy costs, including rent, utilities and insurance, and moving costs expected to be incurred in connection with the Company's facility consolidations while we are unable to use those facilities. | ||||||||
5. Represents transaction related costs incurred to complete and integrate acquisitions, including due diligence, legal and integration costs. | ||||||||
6. Represents the non-cash change in fair value of earn-out liabilities related to the Company's acquisitions. | ||||||||
THE | |||||||
2016 FULLY DILUTED EPS GUIDANCE RECONCILIATION TO 2016 MODIFIED | |||||||
PRO FORMA FULLY DILUTED EPS GUIDANCE (1)(2) | |||||||
Low-End | High-End | ||||||
Guidance | Guidance | ||||||
Net loss per diluted share | $ | (0.07 | ) | $ | (0.02 | ) | |
Duplicate occupancy and moving costs (3) | 0.02 | 0.02 | |||||
Integration and deal costs (4) | 0.01 | 0.01 | |||||
Change in fair-value of earn-out obligation (5) | (0.03 | ) | (0.03 | ) | |||
Loss on early extinguishment of debt (6) | 0.48 | 0.48 | |||||
Modified pro forma net income per diluted share | $ | 0.41 | $ | 0.46 | |||
1. We are presenting estimated modified pro forma EPS, which is not a measurement determined
in accordance with | |||||||
2. Guidance is based upon an estimated effective tax rate of approximately 41.5% and an estimated fully diluted share count of approximately 27.25 million shares. For purposes of calculating the modified pro forma diluted EPS, the Company has assumed that the convertible debt will be dilutive for the full year
and as such the Company added back | |||||||
3. Represents occupancy costs, including rent, utilities and insurance, and moving costs expected to be incurred in connection with the Company's facility consolidations while we are unable to use those facilities. | |||||||
4. Represents transaction related costs incurred to complete and integrate acquisitions, including due diligence, legal and integration expenses. | |||||||
5. Represents the non-cash change in fair value of contingent earn-out liabilities related to the Company's acquisitions | |||||||
6. Represents the write-off of deferred financing fees for the refinancing of our term loan and revolving credit facility and the prepayment penalties for early extinguishment of our senior notes. | |||||||
Contact: Investor RelationsSource: TheJohn Austin , (718) 684-8415
News Provided by Acquire Media