0001517175--12-30FALSEQ3202300015171752022-12-312023-09-2900015171752023-11-01xbrli:shares00015171752023-09-29iso4217:USD00015171752022-12-30iso4217:USDxbrli:shares00015171752023-07-012023-09-2900015171752022-06-252022-09-2300015171752021-12-252022-09-230001517175us-gaap:CommonStockMember2022-12-300001517175us-gaap:AdditionalPaidInCapitalMember2022-12-300001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-300001517175us-gaap:RetainedEarningsMember2022-12-300001517175us-gaap:RetainedEarningsMember2022-12-312023-03-3100015171752022-12-312023-03-310001517175us-gaap:CommonStockMember2022-12-312023-03-310001517175us-gaap:AdditionalPaidInCapitalMember2022-12-312023-03-310001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-312023-03-310001517175us-gaap:CommonStockMember2023-03-310001517175us-gaap:AdditionalPaidInCapitalMember2023-03-310001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001517175us-gaap:RetainedEarningsMember2023-03-3100015171752023-03-310001517175us-gaap:RetainedEarningsMember2023-04-012023-06-3000015171752023-04-012023-06-300001517175us-gaap:CommonStockMember2023-04-012023-06-300001517175us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300001517175us-gaap:CommonStockMember2023-06-300001517175us-gaap:AdditionalPaidInCapitalMember2023-06-300001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001517175us-gaap:RetainedEarningsMember2023-06-3000015171752023-06-300001517175us-gaap:RetainedEarningsMember2023-07-012023-09-290001517175us-gaap:CommonStockMember2023-07-012023-09-290001517175us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-290001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-290001517175us-gaap:CommonStockMember2023-09-290001517175us-gaap:AdditionalPaidInCapitalMember2023-09-290001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-290001517175us-gaap:RetainedEarningsMember2023-09-290001517175us-gaap:CommonStockMember2021-12-240001517175us-gaap:AdditionalPaidInCapitalMember2021-12-240001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-240001517175us-gaap:RetainedEarningsMember2021-12-2400015171752021-12-240001517175us-gaap:RetainedEarningsMember2021-12-252022-03-2500015171752021-12-252022-03-250001517175us-gaap:CommonStockMember2021-12-252022-03-250001517175us-gaap:AdditionalPaidInCapitalMember2021-12-252022-03-250001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-252022-03-250001517175us-gaap:CommonStockMember2022-03-250001517175us-gaap:AdditionalPaidInCapitalMember2022-03-250001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-250001517175us-gaap:RetainedEarningsMember2022-03-2500015171752022-03-250001517175us-gaap:RetainedEarningsMember2022-03-262022-06-2400015171752022-03-262022-06-240001517175us-gaap:CommonStockMember2022-03-262022-06-240001517175us-gaap:AdditionalPaidInCapitalMember2022-03-262022-06-240001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-262022-06-240001517175us-gaap:CommonStockMember2022-06-240001517175us-gaap:AdditionalPaidInCapitalMember2022-06-240001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-240001517175us-gaap:RetainedEarningsMember2022-06-2400015171752022-06-240001517175us-gaap:RetainedEarningsMember2022-06-252022-09-230001517175us-gaap:CommonStockMember2022-06-252022-09-230001517175us-gaap:AdditionalPaidInCapitalMember2022-06-252022-09-230001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-252022-09-230001517175us-gaap:CommonStockMember2022-09-230001517175us-gaap:AdditionalPaidInCapitalMember2022-09-230001517175us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-230001517175us-gaap:RetainedEarningsMember2022-09-2300015171752022-09-23chef:segment0001517175srt:MinimumMember2022-12-312023-09-290001517175srt:MaximumMember2022-12-312023-09-290001517175chef:CenterOfThePlateProductMember2023-07-012023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:CenterOfThePlateProductMemberus-gaap:ProductConcentrationRiskMember2023-07-012023-09-29xbrli:pure0001517175chef:CenterOfThePlateProductMember2022-06-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:CenterOfThePlateProductMemberus-gaap:ProductConcentrationRiskMember2022-06-252022-09-230001517175chef:CenterOfThePlateProductMember2022-12-312023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:CenterOfThePlateProductMemberus-gaap:ProductConcentrationRiskMember2022-12-312023-09-290001517175chef:CenterOfThePlateProductMember2021-12-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:CenterOfThePlateProductMemberus-gaap:ProductConcentrationRiskMember2021-12-252022-09-230001517175chef:DryGoodsProductMember2023-07-012023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMemberchef:DryGoodsProductMember2023-07-012023-09-290001517175chef:DryGoodsProductMember2022-06-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMemberchef:DryGoodsProductMember2022-06-252022-09-230001517175chef:DryGoodsProductMember2022-12-312023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMemberchef:DryGoodsProductMember2022-12-312023-09-290001517175chef:DryGoodsProductMember2021-12-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMemberchef:DryGoodsProductMember2021-12-252022-09-230001517175chef:PastryProductMember2023-07-012023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:PastryProductMemberus-gaap:ProductConcentrationRiskMember2023-07-012023-09-290001517175chef:PastryProductMember2022-06-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:PastryProductMemberus-gaap:ProductConcentrationRiskMember2022-06-252022-09-230001517175chef:PastryProductMember2022-12-312023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:PastryProductMemberus-gaap:ProductConcentrationRiskMember2022-12-312023-09-290001517175chef:PastryProductMember2021-12-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:PastryProductMemberus-gaap:ProductConcentrationRiskMember2021-12-252022-09-230001517175chef:CheeseAndCharcuterieProductMember2023-07-012023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:CheeseAndCharcuterieProductMemberus-gaap:ProductConcentrationRiskMember2023-07-012023-09-290001517175chef:CheeseAndCharcuterieProductMember2022-06-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:CheeseAndCharcuterieProductMemberus-gaap:ProductConcentrationRiskMember2022-06-252022-09-230001517175chef:CheeseAndCharcuterieProductMember2022-12-312023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:CheeseAndCharcuterieProductMemberus-gaap:ProductConcentrationRiskMember2022-12-312023-09-290001517175chef:CheeseAndCharcuterieProductMember2021-12-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:CheeseAndCharcuterieProductMemberus-gaap:ProductConcentrationRiskMember2021-12-252022-09-230001517175chef:ProduceMember2023-07-012023-09-290001517175chef:ProduceMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMember2023-07-012023-09-290001517175chef:ProduceMember2022-06-252022-09-230001517175chef:ProduceMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMember2022-06-252022-09-230001517175chef:ProduceMember2022-12-312023-09-290001517175chef:ProduceMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMember2022-12-312023-09-290001517175chef:ProduceMember2021-12-252022-09-230001517175chef:ProduceMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMember2021-12-252022-09-230001517175chef:DairyAndEggsProductMember2023-07-012023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:DairyAndEggsProductMemberus-gaap:ProductConcentrationRiskMember2023-07-012023-09-290001517175chef:DairyAndEggsProductMember2022-06-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:DairyAndEggsProductMemberus-gaap:ProductConcentrationRiskMember2022-06-252022-09-230001517175chef:DairyAndEggsProductMember2022-12-312023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:DairyAndEggsProductMemberus-gaap:ProductConcentrationRiskMember2022-12-312023-09-290001517175chef:DairyAndEggsProductMember2021-12-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:DairyAndEggsProductMemberus-gaap:ProductConcentrationRiskMember2021-12-252022-09-230001517175chef:OilsAndVinegarProductMember2023-07-012023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:OilsAndVinegarProductMemberus-gaap:ProductConcentrationRiskMember2023-07-012023-09-290001517175chef:OilsAndVinegarProductMember2022-06-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:OilsAndVinegarProductMemberus-gaap:ProductConcentrationRiskMember2022-06-252022-09-230001517175chef:OilsAndVinegarProductMember2022-12-312023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:OilsAndVinegarProductMemberus-gaap:ProductConcentrationRiskMember2022-12-312023-09-290001517175chef:OilsAndVinegarProductMember2021-12-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:OilsAndVinegarProductMemberus-gaap:ProductConcentrationRiskMember2021-12-252022-09-230001517175chef:KitchenSuppliesProductMember2023-07-012023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:KitchenSuppliesProductMemberus-gaap:ProductConcentrationRiskMember2023-07-012023-09-290001517175chef:KitchenSuppliesProductMember2022-06-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:KitchenSuppliesProductMemberus-gaap:ProductConcentrationRiskMember2022-06-252022-09-230001517175chef:KitchenSuppliesProductMember2022-12-312023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:KitchenSuppliesProductMemberus-gaap:ProductConcentrationRiskMember2022-12-312023-09-290001517175chef:KitchenSuppliesProductMember2021-12-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:KitchenSuppliesProductMemberus-gaap:ProductConcentrationRiskMember2021-12-252022-09-230001517175chef:TotalSpecialtyMember2023-07-012023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:TotalSpecialtyMemberus-gaap:ProductConcentrationRiskMember2023-07-012023-09-290001517175chef:TotalSpecialtyMember2022-06-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:TotalSpecialtyMemberus-gaap:ProductConcentrationRiskMember2022-06-252022-09-230001517175chef:TotalSpecialtyMember2022-12-312023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberchef:TotalSpecialtyMemberus-gaap:ProductConcentrationRiskMember2022-12-312023-09-290001517175chef:TotalSpecialtyMember2021-12-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberchef:TotalSpecialtyMemberus-gaap:ProductConcentrationRiskMember2021-12-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMember2023-07-012023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMember2022-06-252022-09-230001517175us-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMember2022-12-312023-09-290001517175us-gaap:RevenueFromContractWithCustomerMemberus-gaap:ProductConcentrationRiskMember2021-12-252022-09-230001517175chef:TotalSpecialtyMemberchef:ImmaterialCorrectionOfPriorPeriodErrorsMembersrt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2022-06-252022-09-230001517175chef:CapitalSeaboardMemberchef:ImmaterialCorrectionOfPriorPeriodErrorsMembersrt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2021-12-252022-09-230001517175chef:ImmaterialCorrectionOfPriorPeriodErrorsMembersrt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2023-07-012023-09-290001517175chef:ImmaterialCorrectionOfPriorPeriodErrorsMembersrt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2022-12-312023-09-290001517175chef:ImmaterialCorrectionOfPriorPeriodErrorsMembersrt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2021-12-252022-12-300001517175chef:ImmaterialCorrectionOfPriorPeriodErrorsMembersrt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2020-12-262021-12-240001517175chef:ImmaterialCorrectionOfPriorPeriodErrorsMembersrt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2019-12-282020-12-250001517175srt:ScenarioPreviouslyReportedMemberus-gaap:CustomerRelationshipsMember2022-12-300001517175us-gaap:NoncompeteAgreementsMembersrt:ScenarioPreviouslyReportedMember2022-12-300001517175srt:ScenarioPreviouslyReportedMemberus-gaap:TrademarksMember2022-12-300001517175us-gaap:CustomerRelationshipsMember2022-12-300001517175us-gaap:NoncompeteAgreementsMember2022-12-300001517175us-gaap:TrademarksMember2022-12-300001517175chef:AssetBasedLoanFacilityMember2022-12-300001517175srt:ScenarioPreviouslyReportedMemberchef:AssetBasedLoanFacilityMember2022-12-300001517175us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-290001517175us-gaap:RestrictedStockUnitsRSUMember2022-06-252022-09-230001517175us-gaap:RestrictedStockUnitsRSUMember2022-12-312023-09-290001517175us-gaap:RestrictedStockUnitsRSUMember2021-12-252022-09-230001517175us-gaap:EmployeeStockOptionMember2023-07-012023-09-290001517175us-gaap:EmployeeStockOptionMember2022-06-252022-09-230001517175us-gaap:EmployeeStockOptionMember2022-12-312023-09-290001517175us-gaap:EmployeeStockOptionMember2021-12-252022-09-230001517175us-gaap:ConvertibleDebtSecuritiesMember2023-07-012023-09-290001517175us-gaap:ConvertibleDebtSecuritiesMember2022-06-252022-09-230001517175us-gaap:ConvertibleDebtSecuritiesMember2022-12-312023-09-290001517175us-gaap:ConvertibleDebtSecuritiesMember2021-12-252022-09-230001517175chef:Convertible2375SeniorNotesMemberus-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2023-09-290001517175chef:Convertible2375SeniorNotesMemberus-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-09-290001517175chef:Convertible2375SeniorNotesMemberus-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-300001517175chef:Convertible2375SeniorNotesMemberus-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-300001517175us-gaap:FairValueInputsLevel3Memberchef:Convertible1875SeniorNotesMemberus-gaap:SeniorNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2023-09-290001517175us-gaap:FairValueInputsLevel3Memberchef:Convertible1875SeniorNotesMemberus-gaap:SeniorNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-09-290001517175us-gaap:FairValueInputsLevel3Memberchef:Convertible1875SeniorNotesMemberus-gaap:SeniorNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-300001517175us-gaap:FairValueInputsLevel3Memberchef:Convertible1875SeniorNotesMemberus-gaap:SeniorNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-300001517175us-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:UnsecuredDebtMember2023-09-290001517175us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:UnsecuredDebtMember2023-09-290001517175us-gaap:FairValueInputsLevel3Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:UnsecuredDebtMember2022-12-300001517175us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:UnsecuredDebtMember2022-12-300001517175chef:GreenleafProduceAndSpecialtyFoodsMember2023-05-012023-05-010001517175chef:GreenleafProduceAndSpecialtyFoodsMemberus-gaap:CommonStockMember2023-05-012023-05-010001517175chef:AssetBasedLoanFacilityMemberchef:GreenleafProduceAndSpecialtyFoodsMember2023-05-010001517175chef:GreenleafProduceAndSpecialtyFoodsMember2023-09-290001517175chef:GreenleafProduceAndSpecialtyFoodsMemberus-gaap:CustomerRelationshipsMember2023-05-010001517175chef:GreenleafProduceAndSpecialtyFoodsMemberus-gaap:TrademarksMember2023-05-010001517175us-gaap:NoncompeteAgreementsMemberchef:GreenleafProduceAndSpecialtyFoodsMember2023-05-010001517175chef:CustomerRelationshipsAndTrademarkMemberchef:GreenleafProduceAndSpecialtyFoodsMember2023-09-290001517175chef:GreenleafProduceAndSpecialtyFoodsMemberus-gaap:TrademarksMember2023-09-290001517175us-gaap:NoncompeteAgreementsMemberchef:GreenleafProduceAndSpecialtyFoodsMember2023-09-290001517175chef:HardiesFreshFoodMember2023-03-202023-03-200001517175chef:HardiesFreshFoodMember2023-03-200001517175chef:HardiesFreshFoodMember2023-09-290001517175us-gaap:CustomerRelationshipsMemberchef:HardiesFreshFoodMember2023-03-200001517175us-gaap:TrademarksMemberchef:HardiesFreshFoodMember2023-03-200001517175us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-12-312023-09-29chef:acquisition0001517175us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2023-09-290001517175us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMemberchef:OtherFiscal2023AcquisitionDateEarnOutLiabilityMember2023-09-290001517175us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMemberus-gaap:CustomerRelationshipsMember2023-09-290001517175us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2023-07-012023-09-290001517175chef:ChefMiddleEastMember2022-11-012022-11-010001517175chef:ChefMiddleEastMember2022-11-010001517175chef:ChefMiddleEastMember2023-04-012023-06-300001517175us-gaap:CustomerRelationshipsMemberchef:ChefMiddleEastMember2022-11-010001517175chef:ChefMiddleEastMemberus-gaap:TrademarksMember2022-11-010001517175us-gaap:NoncompeteAgreementsMemberchef:ChefMiddleEastMember2022-11-010001517175chef:GreenleafProduceAndSpecialtyFoodsMember2023-05-010001517175us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMemberus-gaap:TrademarksMember2023-09-290001517175us-gaap:NoncompeteAgreementsMemberchef:HardiesFreshFoodMember2023-03-200001517175us-gaap:NoncompeteAgreementsMemberus-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2023-09-290001517175us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-06-252022-09-230001517175us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2021-12-252022-09-230001517175us-gaap:LandMember2023-09-290001517175us-gaap:LandMember2022-12-300001517175us-gaap:BuildingMember2023-09-290001517175us-gaap:BuildingMember2022-12-300001517175us-gaap:MachineryAndEquipmentMembersrt:MinimumMember2023-09-290001517175srt:MaximumMemberus-gaap:MachineryAndEquipmentMember2023-09-290001517175us-gaap:MachineryAndEquipmentMember2023-09-290001517175us-gaap:MachineryAndEquipmentMember2022-12-300001517175srt:MinimumMemberus-gaap:ComputerEquipmentMember2023-09-290001517175srt:MaximumMemberus-gaap:ComputerEquipmentMember2023-09-290001517175us-gaap:ComputerEquipmentMember2023-09-290001517175us-gaap:ComputerEquipmentMember2022-12-300001517175srt:MinimumMemberus-gaap:ComputerSoftwareIntangibleAssetMember2023-09-290001517175srt:MaximumMemberus-gaap:ComputerSoftwareIntangibleAssetMember2023-09-290001517175us-gaap:ComputerSoftwareIntangibleAssetMember2023-09-290001517175us-gaap:ComputerSoftwareIntangibleAssetMember2022-12-300001517175srt:MinimumMemberus-gaap:LeaseholdImprovementsMember2023-09-290001517175srt:MaximumMemberus-gaap:LeaseholdImprovementsMember2023-09-290001517175us-gaap:LeaseholdImprovementsMember2023-09-290001517175us-gaap:LeaseholdImprovementsMember2022-12-300001517175us-gaap:FurnitureAndFixturesMember2023-09-290001517175us-gaap:FurnitureAndFixturesMember2022-12-300001517175srt:MinimumMemberus-gaap:VehiclesMember2023-09-290001517175srt:MaximumMemberus-gaap:VehiclesMember2023-09-290001517175us-gaap:VehiclesMember2023-09-290001517175us-gaap:VehiclesMember2022-12-300001517175us-gaap:ConstructionInProgressMember2023-09-290001517175us-gaap:ConstructionInProgressMember2022-12-300001517175chef:AssetsHeldUnderFinanceLeasesMember2023-09-290001517175chef:AssetsHeldUnderFinanceLeasesMember2022-12-300001517175chef:PropertyPlantAndEquipmentExcludingAssetsHeldUnderFinanceLeasesMember2023-07-012023-09-290001517175chef:PropertyPlantAndEquipmentExcludingAssetsHeldUnderFinanceLeasesMember2022-06-252022-09-230001517175chef:PropertyPlantAndEquipmentExcludingAssetsHeldUnderFinanceLeasesMember2022-12-312023-09-290001517175chef:PropertyPlantAndEquipmentExcludingAssetsHeldUnderFinanceLeasesMember2021-12-252022-09-230001517175us-gaap:ComputerSoftwareIntangibleAssetMember2023-07-012023-09-290001517175us-gaap:ComputerSoftwareIntangibleAssetMember2022-06-252022-09-230001517175us-gaap:ComputerSoftwareIntangibleAssetMember2022-12-312023-09-290001517175us-gaap:ComputerSoftwareIntangibleAssetMember2021-12-252022-09-230001517175us-gaap:CustomerRelationshipsMember2023-09-290001517175us-gaap:TrademarksMember2023-09-290001517175us-gaap:NoncompeteAgreementsMember2023-09-290001517175us-gaap:RevolvingCreditFacilityMemberchef:SeniorSecuredTermLoansMember2023-09-290001517175us-gaap:RevolvingCreditFacilityMemberchef:SeniorSecuredTermLoansMember2022-12-300001517175chef:Convertible2375SeniorNotesMemberus-gaap:ConvertibleDebtMember2023-09-290001517175chef:Convertible2375SeniorNotesMemberus-gaap:ConvertibleDebtMember2022-12-300001517175chef:Convertible1875SeniorNotesMemberus-gaap:ConvertibleDebtMember2023-09-290001517175chef:Convertible1875SeniorNotesMemberus-gaap:ConvertibleDebtMember2022-12-300001517175chef:AssetBasedLoanFacilityMember2023-09-290001517175us-gaap:ConvertibleSubordinatedDebtMember2023-09-290001517175us-gaap:ConvertibleSubordinatedDebtMember2022-12-300001517175us-gaap:UnsecuredDebtMember2023-09-290001517175us-gaap:ConvertibleSubordinatedDebtMember2023-06-292023-06-290001517175us-gaap:RevolvingCreditFacilityMemberchef:AssetBasedLoanFacilityMember2023-07-070001517175us-gaap:RevolvingCreditFacilityMemberchef:AssetBasedLoanFacilityMember2023-07-060001517175us-gaap:RevolvingCreditFacilityMemberchef:SeniorSecuredTermLoansMember2023-08-312023-08-310001517175us-gaap:RevolvingCreditFacilityMemberchef:SeniorSecuredTermLoansMember2023-08-310001517175chef:ConvertibleNoteMaturingOnJune292023Memberus-gaap:ConvertibleDebtMember2023-09-290001517175chef:ConvertibleNoteMaturingOnJune292023Memberus-gaap:ConvertibleDebtMember2022-12-300001517175us-gaap:ConvertibleDebtMember2023-09-290001517175us-gaap:ConvertibleDebtMember2022-12-300001517175us-gaap:ConvertibleDebtMember2023-07-012023-09-290001517175us-gaap:ConvertibleDebtMember2022-06-252022-09-230001517175us-gaap:ConvertibleDebtMember2022-12-312023-09-290001517175us-gaap:ConvertibleDebtMember2021-12-252022-09-230001517175us-gaap:RevolvingCreditFacilityMemberchef:AssetBasedLoanFacilityMember2023-09-290001517175chef:TimeBasedRestrictedStockMember2022-12-300001517175us-gaap:PerformanceSharesMember2022-12-300001517175chef:MarketbasedRestrictedStockAwardsMember2022-12-300001517175chef:TimeBasedRestrictedStockMember2022-12-312023-09-290001517175us-gaap:PerformanceSharesMember2022-12-312023-09-290001517175chef:MarketbasedRestrictedStockAwardsMember2022-12-312023-09-290001517175chef:TimeBasedRestrictedStockMember2023-09-290001517175us-gaap:PerformanceSharesMember2023-09-290001517175chef:MarketbasedRestrictedStockAwardsMember2023-09-290001517175us-gaap:RestrictedStockMember2022-12-312023-09-290001517175srt:MaximumMemberchef:TimeMarketAndPerformanceBasedGrantsMember2023-07-012023-09-290001517175us-gaap:RestrictedStockMember2023-07-012023-09-290001517175us-gaap:RestrictedStockMember2022-06-252022-09-230001517175us-gaap:RestrictedStockMember2021-12-252022-09-230001517175us-gaap:RestrictedStockMember2023-09-2900015171752021-12-252022-12-300001517175srt:MaximumMemberus-gaap:EmployeeStockOptionMember2023-07-012023-09-290001517175us-gaap:EmployeeStockOptionMember2023-07-012023-09-290001517175us-gaap:EmployeeStockOptionMember2022-06-252022-09-230001517175us-gaap:EmployeeStockOptionMember2021-12-252022-09-230001517175us-gaap:EmployeeStockOptionMember2022-12-312023-09-290001517175us-gaap:EmployeeStockOptionMember2021-12-252022-12-300001517175us-gaap:RelatedPartyMember2022-12-312023-09-290001517175chef:LeasedDistributionFacilityOwnedByCEOMember2022-06-252022-09-230001517175chef:LeasedDistributionFacilityOwnedByCEOMember2023-07-012023-09-290001517175chef:LeasedDistributionFacilityOwnedByCEOMember2021-12-252022-09-230001517175chef:LeasedDistributionFacilityOwnedByCEOMember2022-12-312023-09-29

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 29, 2023

OR

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number: 001-35249

THE CHEFS’ WAREHOUSE, INC.

(Exact name of registrant as specified in its charter)

Delaware

20-3031526

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

100 East Ridge Road

Ridgefield, Connecticut 06877

(Address of principal executive offices)

Registrant’s telephone number, including area code: (203) 894-1345

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, par value $0.01			CHEF			The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ☒

Number of shares of common stock, par value $.01 per share, outstanding at November 1, 2023: 39,665,229

1

---

THE CHEFS’ WAREHOUSE, INC.

FORM 10-Q

Table of Contents

Page

PART I. FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements (unaudited):

4

Condensed Consolidated Balance Sheets

4

Condensed Consolidated Statements of Operations and Comprehensive Income

5

Condensed Consolidated Statements of Changes in Stockholders’ Equity

6

Condensed Consolidated Statements of Cash Flows

7

Notes to Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

27

Item 4.

Controls and Procedures

27

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

27

Item 1A.

Risk Factors

27

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

27

Item 3.

Defaults Upon Senior Securities

28

Item 4.

Mine Safety Disclosures

28

Item 5.

Other Information

28

Item 6.

Exhibits

29

Signatures

30

 

2

---

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Statements in this report regarding the business of The Chefs’ Warehouse, Inc. (the “Company”) 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. Words such as “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and/or could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The risks and uncertainties which could impact these statements include, but are not limited to the following: our sensitivity to general economic conditions, including disposable income levels and changes in consumer discretionary spending; our ability to expand our operations in our existing markets and to penetrate new markets through acquisitions; we may not achieve the benefits expected from our acquisitions, which could adversely impact our business and operating results; we may have difficulty managing and facilitating our future growth; conditions beyond our control could materially affect the cost and/or availability of our specialty food products or center-of-the-plate products and/or interrupt our distribution network; our increased distribution of center-of-the-plate products, like meat, poultry and seafood, involves increased exposure to price volatility experienced by those products; our business is a low-margin business and our profit margins may be sensitive to inflationary and deflationary pressures; because our foodservice distribution operations are concentrated in certain culinary markets, we are susceptible to economic and other developments, including adverse weather conditions, in these areas; fuel cost volatility may have a material adverse effect on our business, financial condition or results of operations; our ability to raise capital in the future may be limited; we may be unable to obtain debt or other financing, including financing necessary to execute on our acquisition strategy, on favorable terms or at all; interest charged on our outstanding debt may be adversely affected by changes in the method of determining the Secured Overnight Financing Rate (“SOFR”); our business operations and future development could be significantly disrupted if we lose key members of our management team; and significant public health epidemics or pandemics, including the COVID-19 pandemic, may adversely affect our business, results of operations and financial condition. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, 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 Securities and Exchange Commission (“SEC”) on February 28, 2023 and other reports, including this Quarterly Report on Form 10-Q, filed by the Company with the SEC since that date. The Company is not undertaking to update any information in the foregoing report until the effective date of its future reports required by applicable laws.

3

---

PART I FINANCIAL INFORMATION

ITEM 1.            CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THE CHEFS’ WAREHOUSE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 (Unaudited)

(Amounts in thousands, except share data)

			September 29, 2023						December 30, 2022
ASSETS
Current assets:
Cash and cash equivalents			$	33,058					$	158,800
Accounts receivable, net of allowance of $24,792 in 2023 and $20,733 in 2022			316,138						260,167
Inventories, net			312,222						245,693
Prepaid expenses and other current assets			60,199						56,200
Total current assets			721,617						720,860
Property and equipment, net			208,927						185,728
Operating lease right-of-use assets			177,092						156,629
Goodwill			344,526						287,120
Intangible assets, net			199,618						155,703
Other assets			6,262						3,256
Total assets			$	1,658,042					$	1,509,296
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	209,299					$	163,397
Accrued liabilities			75,437						54,325
Short-term operating lease liabilities			22,765						19,428
Accrued compensation			30,747						34,167
Current portion of long-term debt			11,970						12,428
Total current liabilities			350,218						283,745
Long-term debt, net of current portion			689,207						653,504
Operating lease liabilities			171,207						151,406
Deferred taxes, net			9,317						6,098
Other liabilities and deferred credits			3,311						13,034
Total liabilities			1,223,260						1,107,787
Commitments and contingencies
Stockholders’ equity:
Preferred Stock - $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding at September 29, 2023 and December 30, 2022			—						—
Common Stock - $0.01 par value, 100,000,000 shares authorized, 39,667,165 and 38,599,390 shares issued and outstanding at September 29, 2023 and December 30, 2022, respectively			397						386
Additional paid-in capital			352,576						337,947
Accumulated other comprehensive loss			(2,142)						(2,185)
Retained earnings			83,951						65,361
Total stockholders’ equity			434,782						401,509
Total liabilities and stockholders’ equity			$	1,658,042					$	1,509,296

See accompanying notes to the condensed consolidated financial statements

4

---

THE CHEFS’ WAREHOUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

(Amounts in thousands, except share and per share amounts)

			Thirteen Weeks Ended												Thirty-Nine Weeks Ended
			September 29, 2023						September 23, 2022						September 29, 2023						September 23, 2022
Net sales			$	881,825					$	661,856					$	2,483,290					$	1,822,063
Cost of sales			674,127						504,068						1,897,440						1,390,758
Gross profit			207,698						157,788						585,850						431,305
Selling, general and administrative expenses			179,614						130,255						514,793						364,828
Other operating expenses, net			2,535						5,458						8,269						10,504
Operating income			25,549						22,075						62,788						55,973
Interest expense			11,379						10,737						33,391						19,567
Income before income taxes			14,170						11,338						29,397						36,406
Provision for income tax expense			6,848						3,061						10,807						9,829
Net income			$	7,322					$	8,277					$	18,590					$	26,577
Other comprehensive (loss) income:
Foreign currency translation adjustments			(231)						(156)						43						(105)
Comprehensive income			$	7,091					$	8,121					$	18,633					$	26,472
Net income per share:
Basic			$	0.19					$	0.22					$	0.49					$	0.72
Diluted			$	0.19					$	0.21					$	0.49					$	0.68
Weighted average common shares outstanding:
Basic			37,692,588						37,120,926						37,611,179						37,047,653
Diluted			45,717,496						42,044,053						39,143,774						41,942,676

 

See accompanying notes to the condensed consolidated financial statements

5

---

THE CHEFS’ WAREHOUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

(Amounts in thousands, except share amounts)

			Common Stock												Additional Paid-in Capital						Accumulated Other Comprehensive Loss						Retained Earnings						Total
			Shares						Amount
Balance December 30, 2022			38,599,390						$	386					$	337,947					$	(2,185)					$	65,361					$	401,509
Net income			—						—						—						—						1,401						1,401
Stock compensation			998,777						10						4,780						—						—						4,790
Cumulative translation adjustment			—						—						—						81						—						81
Shares surrendered to pay tax withholding			(54,036)						(1)						(1,828)						—						—						(1,829)
Balance March 31, 2023			39,544,131						$	395					$	340,899					$	(2,104)					$	66,762					$	405,952
Net income			—						—						—						—						9,867						9,867
Stock compensation			53,543						—						4,704						—						—						4,704
Shares issued for acquisitions			75,008						1						2,495						—						—						2,496
Cumulative translation adjustment			—						—						—						193						—						193
Shares surrendered to pay tax withholding			(6,991)						—						(237)						—						—						(237)
Balance June 30, 2023			39,665,691						$	396					$	347,861					$	(1,911)					$	76,629					$	422,975
Net income			—						—						—						—						7,322						7,322
Stock compensation			936						1						4,729						—						—						4,730
Exercise of stock options			2,705						—						55						—						—						55
Cumulative translation adjustment			—						—						—						(231)						—						(231)
Shares surrendered to pay tax withholding			(2,167)						—						(69)						—						—						(69)
Balance September 29, 2023			39,667,165						$	397					$	352,576					$	(2,142)					$	83,951					$	434,782

Balance December 24, 2021			37,887,675						$	380					$	314,242					$	(2,022)					$	37,611					$	350,211
Net income			—						—						—						—						1,385						1,385
Stock compensation			433,115						4						3,039						—						—						3,043
Warrants issued for acquisitions			—						—						1,701						—						—						1,701
Cumulative translation adjustment			—						—						—						125						—						125
Shares surrendered to pay tax withholding			(64,329)						(1)						(2,039)						—						—						(2,040)
Balance March 25, 2022			38,256,461						$	383					$	316,943					$	(1,897)					$	38,996					$	354,425
Net income			—						—						—						—						16,915						16,915
Stock compensation			16,131						—						2,939						—						—						2,939
Cumulative translation adjustment			—						—						—						(74)						—						(74)
Shares surrendered to pay tax withholding			(15,137)						—						(518)						—						—						(518)
Balance June 24, 2022			38,257,455						$	383					$	319,364					$	(1,971)					$	55,911					$	373,687
Net income			—						—						—						—						8,277						8,277
Stock compensation			9,986						—						3,099						—						—						3,099
Exercise of stock options			3,407						—						69						—						—						69
Cumulative translation adjustment			—						—						—						(156)						—						(156)
Shares surrendered to pay tax withholding			(741)						—						(27)						—						—						(27)
Balance September 23, 2022			38,270,107						$	383					$	322,505					$	(2,127)					$	64,188					$	384,949

See accompanying notes to the condensed consolidated financial statements

6

---

THE CHEFS’ WAREHOUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Amounts in thousands)

			Thirty-Nine Weeks Ended
			September 29, 2023						September 23, 2022
Cash flows from operating activities:
Net income			$	18,590					$	26,577
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			24,167						17,667
Amortization of intangible assets			16,924						10,289
Provision for allowance for doubtful accounts			5,216						3,138
Non-cash operating lease expense			2,663						1,329
Provision for deferred income taxes			3,018						7,121
Amortization of deferred financing fees			3,421						1,621
Loss on debt extinguishment			—						142
Stock compensation			15,855						9,081
Change in fair value of contingent earn-out liabilities			2,850						8,358
Intangible asset impairment			1,838						—
(Gain) loss on asset disposal			(44)						17
Changes in assets and liabilities, net of acquisitions:
Accounts receivable			(27,387)						(25,402)
Inventories			(56,350)						(40,519)
Prepaid expenses and other current assets			(3,460)						(9,848)
Accounts payable, accrued liabilities and accrued compensation			18,740						21,938
Other assets and liabilities			(5,996)						238
Net cash provided by operating activities			20,045						31,747
Cash flows from investing activities:
Capital expenditures			(35,130)						(31,666)
Cash paid for acquisitions, net of cash acquired			(120,600)						(62,007)
Net cash used in investing activities			(155,730)						(93,673)
Cash flows from financing activities:
Payment of debt, finance lease and other financing obligations			(33,444)						(171,434)
Proceeds from debt issuance			—						300,000
Payment of deferred financing fees			(354)						(11,258)
Proceeds from exercise of stock options			55						69
Surrender of shares to pay withholding taxes			(2,134)						(2,584)
Cash paid for contingent earn-out liability			(3,650)						(2,538)
Borrowings under asset-based loan facility			50,000						—
Payments under asset-based loan facility			—						(20,000)
Net cash provided by financing activities			10,473						92,255
Effect of foreign currency on cash and cash equivalents			(530)						(59)
Net change in cash and cash equivalents			(125,742)						30,270
Cash and cash equivalents-beginning of period			158,800						115,155
Cash and cash equivalents-end of period			$	33,058					$	145,425

See accompanying notes to the condensed consolidated financial statements

7

---

THE CHEFS’ WAREHOUSE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Amounts in thousands, except share and per share amounts)

Note 1 - Operations and Basis of Presentation

 

Description of Business and Basis of Presentation

 

The financial statements include the condensed consolidated accounts of The Chefs’ Warehouse, Inc. (the “Company”), and its wholly-owned subsidiaries. The Company’s quarterly periods end on the thirteenth Friday of each quarter. Every six to seven years, the Company will add a fourteenth week to its fourth quarter to more closely align its year-end to the calendar year. Fiscal 2022 contained a fourteenth week in the fourth quarter. The Company’s business consists of three operating segments: East, Midwest and West that aggregate into one reportable segment, foodservice distribution, which is concentrated primarily in the United States. The Company’s customer base consists primarily of menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos, specialty food stores, grocers and warehouse clubs.

Consolidation

The unaudited condensed consolidated financial statements include all the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Unaudited Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements and the related interim information contained within the notes to such unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules of the Securities and Exchange Commission (“SEC”) for interim information and quarterly reports on Form 10-Q. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 30, 2022 filed as part of the Company’s Annual Report on Form 10-K, as filed with the SEC on February 28, 2023.

The unaudited condensed consolidated financial statements appearing in this Form 10-Q have been prepared on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 28, 2023, and in the opinion of management, include all normal recurring adjustments that are necessary for the fair statement of the Company’s interim period results. The year-end consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by GAAP. Due to seasonal fluctuations and other factors, the results of operations for the thirteen and thirty-nine weeks ended September 29, 2023 are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from management’s estimates.

Note 2 – Summary of Significant Accounting Policies

Revenue Recognition

 

Revenues from product sales are recognized at the point at which control of each product is transferred to the customer. The Company’s contracts contain performance obligations which are satisfied when customers have physical possession of each product. The majority of customer orders are fulfilled within a day and customer payment terms are typically 14 to 60 days from delivery. Shipping and handling activities are costs to fulfill the Company’s performance obligations. These costs are expensed as incurred and presented within selling, general and administrative expenses on the condensed consolidated statements of operations. The Company offers certain sales incentives to customers in the form of rebates or discounts. These sales incentives are accounted for as variable consideration. The Company estimates these amounts based on the expected amount to be provided to customers and records a corresponding reduction in revenue. The Company does not expect a

8

---

significant reversal in the amount of cumulative revenue recognized. Sales tax billed to customers is not included in revenue but rather recorded as a liability owed to the respective taxing authorities at the time the sale is recognized.

The following table presents the Company’s net sales disaggregated by principal product category:

			Thirteen Weeks Ended																								Thirty-Nine Weeks Ended
			September 29, 2023												September 23, 2022												September 29, 2023												September 23, 2022
Center-of-the-Plate			$	333,809					37.9		%				$	280,272					42.3		%				$	980,120					39.5		%				$	803,334					44.1		%
Specialty:
Dry Goods			134,398						15.2		%				97,323						14.7		%				395,723						15.9		%				257,971						14.2		%
Pastry			102,562						11.6		%				71,145						10.7		%				300,814						12.1		%				188,948						10.4		%
Cheese and Charcuterie			64,639						7.3		%				54,989						8.3		%				185,303						7.5		%				146,155						8.0		%
Produce			137,760						15.6		%				74,379						11.2		%				310,313						12.5		%				204,422						11.2		%
Dairy and Eggs			56,849						6.4		%				38,719						5.9		%				163,600						6.6		%				102,405						5.6		%
Oils and Vinegars			34,097						3.9		%				29,778						4.5		%				96,607						3.9		%				78,645						4.3		%
Kitchen Supplies			17,711						2.1		%				15,251						2.4		%				50,810						2.0		%				40,183						2.2		%
Total Specialty			$	548,016					62.1		%				$	381,584					57.7		%				$	1,503,170					60.5		%				$	1,018,729					55.9		%
Total net sales			$	881,825					100		%				$	661,856					100		%				$	2,483,290					100		%				$	1,822,063					100		%

The Company determines its product category classification based on how the Company currently markets its products to its customers. The Company’s definition of its principal product categories may differ from the way in which other companies present similar information. Net sales by product category includes estimates of product mix for certain locations that are not yet fully integrated into the Company’s information technology systems as of the reporting date. The table above includes the correction of an immaterial error to revise the Specialty principal product category revenue for the thirteen weeks ended September 23, 2022 and the thirty-nine weeks ended September 23, 2022 related to its Capital Seaboard acquisition. Total Specialty revenue was not impacted but aggregate revenue of $35,077 and $100,009 was adjusted from other Specialty product categories to Produce for the thirteen weeks ended September 23, 2022 and the thirty-nine weeks ended September 23, 2022, respectively.

Food Processing Costs

Food processing costs include but are not limited to direct labor and benefits, applicable overhead and depreciation of equipment and facilities used in food processing activities. Food processing costs included in cost of sales were $19,081 and $10,089 for the thirteen weeks ended September 29, 2023 and September 23, 2022, respectively, and $47,370 and $28,523 for the thirty-nine weeks ended September 29, 2023 and September 23, 2022, respectively.

Immaterial Correction of Prior Period Errors and Disclosures

During the third quarter of fiscal 2023, immaterial errors were identified in the calculation of the provision for income tax expense (benefit) for fiscal 2022, 2021 and 2020. The Company recorded an out of period adjustment of $2,135 to the provision for income tax expense during the thirteen and thirty-nine weeks ended September 29, 2023. The impact of these errors on prior periods would be to increase the provision for income tax expense by $1,308 for fiscal 2022 and to reduce the provision for income tax benefit by $719 and $108 for fiscal 2021 and 2020, respectively.

During the first quarter of fiscal 2023 and subsequent to the issuance of the fiscal year 2022 consolidated financial statements, immaterial errors were identified in the weighted average remaining amortization period of intangible assets, the intangible asset amortization schedule and the debt maturity schedule. The weighted average remaining amortization period for customer relationships, non-compete agreements and trademarks were previously disclosed as 232 months, 73 months and 250 months instead of 117 months, 25 months and 165 months, respectively. This had a corresponding immaterial impact on the intangible asset amortization schedule.

In addition, the debt maturity schedule previously included the $40,000 due upon maturity of the asset-based loan facility in the thereafter total instead of in the 2027 total. Further, the Company omitted that the asset-based loan facility and term loan are classified as Level 2 within the fair value hierarchy. These immaterial errors and omissions have been corrected in Note 4 “Fair Value Measurements”, Note 8 “Goodwill and Other Intangible Assets” and Note 9 “Debt Obligations”, within these condensed consolidated financial statements.

9

---

Note 3 – Net Income per Share

 

The following table sets forth the computation of basic and diluted net income per common share:

			Thirteen Weeks Ended												Thirty-Nine Weeks Ended
			September 29, 2023						September 23, 2022						September 29, 2023						September 23, 2022
Net income per share:
Basic			$	0.19					$	0.22					$	0.49					$	0.72
Diluted			$	0.19					$	0.21					$	0.49					$	0.68
Weighted average common shares:
Basic			37,692,588						37,120,926						37,611,179						37,047,653
Diluted			45,717,496						42,044,053						39,143,774						41,942,676

Reconciliation of net income per common share:

			Thirteen Weeks Ended												Thirty-Nine Weeks Ended
			September 29, 2023						September 23, 2022						September 29, 2023						September 23, 2022
Numerator:
Net income			$	7,322					$	8,277					$	18,590					$	26,577
Add effect of dilutive securities
Interest on convertible notes, net of tax			1,369						683						403						2,048
Net income available to common shareholders			$	8,691					$	8,960					$	18,993					$	28,625
Denominator:
Weighted average basic common shares outstanding			37,692,588						37,120,926						37,611,179						37,047,653
Dilutive effect of unvested common shares			594,416						316,358						580,675						304,391
Dilutive effect of stock options and warrants			37,675						81,789						54,073						65,652
Dilutive effect of convertible notes			7,392,817						4,524,980						897,847						4,524,980
Weighted average diluted common shares outstanding			45,717,496						42,044,053						39,143,774						41,942,676

 

Potentially dilutive securities that have been excluded from the calculation of diluted net income per common share because the effect is anti-dilutive are as follows:

			Thirteen Weeks Ended												Thirty-Nine Weeks Ended
			September 29, 2023						September 23, 2022						September 29, 2023						September 23, 2022
Restricted share awards (“RSAs”)			292,778						80,844						37,236						68,784
Stock options and warrants			300,000						—						—						—
Convertible notes			—						91,053						6,494,970						91,053

Note 4 – Fair Value Measurements

 

Assets and Liabilities Measured at Fair Value

 

The Company’s contingent earn-out liabilities are measured at fair value. These liabilities were estimated using Level 3 inputs. Long-term earn-out liabilities were $1,757 and $10,483 as of September 29, 2023 and December 30, 2022, respectively, and are reflected as other liabilities and deferred credits on the condensed consolidated balance sheets. The remaining short-term earn-out liabilities are reflected as accrued liabilities on the condensed consolidated balance sheets. The fair value of contingent consideration was determined based on a probability-based approach which includes projected results, percentage probability of

10

---

occurrence and the application of a discount rate to present value the payments. A significant change in projected results, discount rate, or probabilities of occurrence could result in a significantly higher or lower fair value measurement. Changes in the fair value of contingent earn-out liabilities are reflected in other operating expenses, net on the condensed consolidated statements of operations.

The following table presents the changes in Level 3 contingent earn-out liabilities:

																																	Total
Balance December 30, 2022																																	$	17,294
Acquisition value																																	5,765
Cash payments																																	(4,625)
Changes in fair value																																	2,850
Balance September 29, 2023																																	$	21,284

Fair Value of Financial Instruments

The carrying amounts reported in the Company’s condensed consolidated balance sheets for accounts receivable and accounts payable approximate fair value due to the immediate to short-term nature of these financial instruments. The fair values of the asset-based loan facility and term loan approximated their book values as of September 29, 2023 and December 30, 2022 as these instruments had variable interest rates that reflected current market rates available to the Company and are classified as Level 2 fair value measurements.

The following table presents the carrying value and fair value of the Company’s convertible notes and GreenLeaf Note. The fair value of the Company’s 2028 Convertible Senior Notes was based on Level 1 inputs. In estimating the fair value of its 2024 Convertible Senior Notes and Convertible Unsecured Note, the Company utilized Level 3 inputs including prevailing market interest rates to estimate the debt portion of the instrument and a Black Scholes valuation model to estimate the fair value of the conversion option. The Black Scholes model utilizes the market price of the Company’s common stock, estimates of the stock’s volatility and the prevailing risk-free interest rate in calculating the fair value estimate. The fair value of the GreenLeaf Note was determined based upon observable market prices of similar debt instruments. The Convertible Unsecured Note matured on June 29, 2023 and was repaid in full.

						September 29, 2023												December 30, 2022
			Fair Value Hierarchy			Carrying Value						Fair Value						Carrying Value						Fair Value
2028 Convertible Senior Notes			Level 1			$	287,500					$	233,421					$	287,500					$	292,531
2024 Convertible Senior Notes			Level 3			$	39,684					$	37,270					$	41,684					$	43,723
GreenLeaf Note			Level 2			$	10,000					$	9,821					$	—					$	—
Convertible Unsecured Note			Level 3			$	—					$	—					$	4,000					$	4,345

 

Note 5 – Acquisitions

 

GreenLeaf

On May 1, 2023, the Company entered into a stock purchase agreement to acquire substantially all of the equity interests of Oakville Produce Partners, LLC (“GreenLeaf”), a leading produce and specialty food distributor in Northern California. The final purchase price was $86,124 consisting of $72,157 paid in cash at closing, $1,471 paid upon settlement of a net working capital true-up, the issuance of a $10,000 unsecured note and 75,008 shares of the Company’s common stock with an approximate value of $2,496 based on the trading price of the Company’s common stock on the date of acquisition. The acquisition was partially funded by a $40,000 incremental draw on the Company’s asset-based loan facility. The Company’s purchase price allocation is preliminary and is subject to revision pending the valuation of goodwill and intangible assets acquired. This valuation is incomplete as of September 29, 2023 as the Company is currently in the process of completing its assessment of valuation inputs and assumptions. When applicable, these valuations require the use of Level 3 inputs. All goodwill for the GreenLeaf acquisition will be amortized over 15 years for tax purposes. The goodwill recorded primarily reflects the value of acquiring an established specialty produce distributor to leverage the Company’s existing products in the markets served by GreenLeaf and any intangible assets that do not qualify for separate recognition, including assembled

11

---

workforce. The intangible assets acquired consisted of customer relationships, trademarks and non-compete agreements valued at $38,900, $1,500, and $400 respectively, as of the acquisition date. The customer relationships are being amortized over an average of 7.5 years, the trademarks are being amortized over 5 years and the non-compete agreements are being amortized over 2 years.

Hardie’s Fresh Foods

On March 20, 2023, pursuant to an asset purchase agreement, the Company acquired substantially all of the assets of Hardie’s F&V, LLC (“Hardie’s Fresh Foods”), a specialty produce distributor with operations in Texas. The final purchase price was approximately $42,000, consisting of $38,000 paid in cash at closing, subject to customary net working capital adjustments, and an earn-out liability valued at approximately $4,000 as of the acquisition date. If earned, the earn-out liability could total up to $10,000 over a two-year period. The payment of the earn-out liability is subject to the successful achievement of certain EBITDA targets. The Company’s purchase price allocation is preliminary and is subject to revision pending the valuation of goodwill and intangible assets acquired. The valuation of tangible and intangible assets acquired is incomplete as of September 29, 2023. All goodwill for the Hardie’s Fresh Foods acquisition will be amortized over 15 years for tax purposes. The goodwill recorded primarily reflects the value of acquiring an established specialty produce distributor to leverage the Company’s existing products in the markets served by Hardie’s Fresh Foods and any intangible assets that do not qualify for separate recognition, including assembled workforce. The intangible assets acquired consisted of customer relationships and trademarks valued at $14,000 and $3,600, respectively, as of the acquisition date. The customer relationships and trademarks are being amortized over 10 years and 5 years, respectively.

Other Fiscal 2023 Acquisitions

During the thirty-nine weeks ended September 29, 2023, the Company completed three other acquisitions for an aggregate initial purchase price of approximately $17,744, consisting of $12,971 paid in cash at closing, $893 paid upon settlement of a net working capital adjustment, earn-out liabilities valued at approximately of $1,665 as of the dates of acquisition, and $2,215 of deferred payments. If earned, these earn-out liabilities could total up to $2,562 in the aggregate. The Company’s aggregate purchase price allocations are preliminary and is subject to revision pending the valuations of goodwill and intangible assets acquired. This valuation is incomplete as of September 29, 2023 as the Company is currently in the process of completing its assessment of valuation inputs and assumptions as well as opening working capital. When applicable, these valuations require the use of Level 3 inputs. All goodwill of $6,933 will be amortized over 15 years for tax purposes. The intangible assets acquired consisted of customer relationships valued at $4,276 as of the acquisition dates. The customer relationships are being amortized over 10 years.

The Company reflected net sales and income before income taxes in its condensed consolidated statement of operations related to the fiscal 2023 acquisitions as follows:

			Thirteen Weeks Ended						Thirty-Nine Weeks Ended
			September 29, 2023												September 29, 2023
Net sales			$	109,973											$	230,376
Income before income taxes			$	4,164											$	10,528

Chef Middle East

On November 1, 2022, pursuant to a share sale and purchase agreement, the Company acquired substantially all of the shares of Chef Middle East LLC (“CME”), a specialty food distributor with operations in the United Arab Emirates, Qatar and Oman. The final purchase price was approximately $116,515, consisting of $108,749 paid in cash at closing, $166 paid upon settlement of a net working capital true-up, and an earn-out liability valued at $7,600 as of the date of acquisition. If earned, the earn-out liability could total up to $10,000 over a two-year period. The measurement period adjustments recorded through the second quarter of fiscal 2023 resulted in a goodwill increase of $735, a decrease in inventories of $735, an increase in the earn-out liability of $100, an increase in accrued liabilities of $313, a decrease in other assets of $82, and a decrease in deferred tax liabilities of $35. The valuation of tangible and intangible assets acquired has been completed as of September 29, 2023. The intangible assets acquired consisted of customer relationships, trademarks and non-compete agreements valued at $25,800, $11,400, and $320, respectively, as of the acquisition date. The customer relationships, trademarks and non-compete agreements are being amortized over 10, 15 and 3 years, respectively.

12

---

The table below sets forth the total assets acquired and liabilities assumed:

			Chef Middle East						Hardie’s Fresh Foods						GreenLeaf						Other Acquisitions
Current assets			$	84,076					$	26,475					$	16,069					$	9,697
Customer relationships			25,800						14,000						38,900						4,276
Trademarks			11,400						3,600						1,500						—
Non-compete agreements			320						—						400						—
Goodwill			24,548						12,346						36,155						6,933
Fixed assets			16,953						4,986						2,231						434
Other assets			859						146						109						—
Deferred tax liability			(3,600)						—						—						(241)
Right-of-use assets			5,321						13,303						2,026						3,258
Lease liabilities			(5,321)						(13,303)						(2,026)						(3,258)
Current liabilities			(43,841)						(19,553)						(9,240)						(3,336)
Other long-term liabilities			—						—						—						(19)
Total			$	116,515					$	42,000					$	86,124					$	17,744

The Company recognized professional fees related to acquisition activities of $710 and $728 during the thirteen weeks ended September 29, 2023 and September 23, 2022, respectively, and $3,338 and $1,747 during the thirty-nine weeks ended September 29, 2023 and September 23, 2022, respectively, presented within other operating expenses, net on the condensed consolidated statements of operations.

Unaudited Pro forma Financial Information

The table below presents unaudited pro forma condensed consolidated income statement information of the Company as if the GreenLeaf and Hardie’s Fresh Foods acquisitions had occurred on December 25, 2021, and the CME acquisition had occurred on December 26, 2020. The pro forma results were prepared from financial information obtained from the sellers of the business, as well as information obtained during the due diligence process associated with the acquisitions. The pro forma information is not necessarily indicative of the Company’s results of operations had the acquisitions been completed on the above date, nor is it necessarily indicative of the Company’s future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisitions, any incremental costs for transitioning to become a public company, and also does not reflect additional revenue opportunities following the acquisitions. The pro forma information reflects amortization and depreciation of the acquisitions at their respective fair value. The pro forma information also reflects additional interest expense that would have been incurred by the Company to finance the acquisitions. Pro forma interest expense was estimated based on the prevailing interest rates charged on the Company’s senior secured term loan during fiscal 2022. CME did not have a pro forma impact during the thirteen and thirty-nine weeks ended September 29, 2023 as it was included in the condensed consolidated results of operations for the entire period.

			Thirteen Weeks Ended												Thirty-Nine Weeks Ended
			September 29, 2023						September 23, 2022						September 29, 2023						September 23, 2022
Net sales			$	881,825					$	800,158					$	2,577,474					$	2,238,390
Income before income taxes			$	14,170					$	12,752					$	30,479					$	45,836

Note 6 – Inventories

 

Inventories consist primarily of finished product and are reflected net of adjustments for shrinkage, excess and obsolescence to approximate their net realizable value totaling $10,415 and $9,198 at September 29, 2023 and December 30, 2022, respectively.

13

---

Note 7 – Property and Equipment

 

Property and equipment as of September 29, 2023 and December 30, 2022 consisted of the following:

						Useful Lives						September 29, 2023						December 30, 2022
Land						Indefinite						$	5,542					$	5,542
Buildings						20 years						40,695						39,893
Machinery and equipment						5 - 10 years						36,655						32,107
Computers, data processing and other equipment						3 - 7 years						21,547						18,475
Software						3 - 7 years						48,814						42,609
Leasehold improvements						1 - 40 years						129,845						94,245
Furniture and fixtures						7 years						4,097						3,825
Vehicles						5 - 10 years						34,665						31,462
Construction-in-process												24,050						36,583
												345,910						304,741
Less: accumulated depreciation and amortization												(136,983)						(119,013)
Property and equipment, net												$	208,927					$	185,728

Construction-in-process at September 29, 2023 related primarily to the build-out of the Company’s Richmond, CA and Miami, FL distribution facilities and at December 30, 2022 related primarily to the build-out of the Company’s Miami, Dallas and Richmond, CA distribution facilities and the implementation of the Company’s Enterprise Resource Planning system. The net book value of equipment financed under finance leases at September 29, 2023 and December 30, 2022 was $11,821 and $11,579, respectively.

The components of depreciation and amortization expense were as follows:

			Thirteen Weeks Ended												Thirty-Nine Weeks Ended
			September 29, 2023						September 23, 2022						September 29, 2023						September 23, 2022
Depreciation expense			$	7,017					$	4,455					$	19,691					$	13,255
Software amortization			$	1,468					$	1,457					$	4,476					$	4,412
			$	8,485					$	5,912					$	24,167					$	17,667

Note 8 – Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill are presented as follows:

Carrying amount as of December 30, 2022			$	287,120
Goodwill adjustments (1)			1,986
Acquisitions			55,434
Foreign currency translation			(14)
Carrying amount as of September 29, 2023			$	344,526

(1) The goodwill adjustments represent measurement period adjustments related to certain acquisitions completed in the current and prior year.

14

---

Other intangible assets as of September 29, 2023 and December 30, 2022 consisted of the following:

September 29, 2023						Weighted-Average Remaining Amortization Period						Gross Carrying Amount						Accumulated Amortization						Net Amount
Customer relationships						103 months						$	260,948					$	(98,590)					$	162,358
Trademarks						148 months						56,236						(19,640)						36,596
Non-compete agreements						20 months						9,299						(8,635)						664
Total												$	326,483					$	(126,865)					$	199,618

December 30, 2022						Weighted-Average Remaining Amortization Period						Gross Carrying Amount						Accumulated Amortization						Net Amount
Customer relationships						117 months						$	205,608					$	(85,447)					$	120,161
Trademarks						165 months						51,137						(16,201)						34,936
Non-compete agreements						25 months						8,899						(8,293)						606
Total												$	265,644					$	(109,941)					$	155,703

Amortization expense for other intangibles was $6,468 and $3,470 for the thirteen weeks ended September 29, 2023 and September 23, 2022, respectively, and $16,924 and $10,289 for the thirty-nine weeks ended September 29, 2023 and September 23, 2022, respectively.

The Company recognized a customer relationships intangible asset impairment charge of $1,838 related to the loss of a significant Hardie’s Fresh Foods customer post acquisition. The Company’s valuation of the Hardie’s Fresh Foods’ customer list intangible asset as of the acquisition date, a Level 3 measurement, was based on an income approach using the excess earnings method which requires significant assumptions including future sales forecasts and a discount rate. The impairment charge was measured by reducing its assumption of future sales for the significant customer lost post-acquisition to zero.The impairment charge is presented within other operating expenses, net on the condensed consolidated statements of operations.

Estimated amortization expense for other intangible assets for the remainder of the fiscal year ending December 29, 2023 and each of the next four fiscal years and thereafter is as follows:

2023			$	6,289
2024			24,939
2025			24,400
2026			24,204
2027			23,635
Thereafter			96,151
Total			$	199,618

15

---

Note 9 – Debt Obligations

Debt obligations as of September 29, 2023 and December 30, 2022 consisted of the following:

			Weighted Average Effective Interest Rate at September 29, 2023						Maturity						September 29, 2023						December 30, 2022
Senior secured term loans			10.83		%				August 2029						$	277,000					$	299,250
2028 Convertible senior notes			2.77		%				December 2028						287,500						287,500
2024 Convertible senior notes			2.34		%				December 2024						39,684						41,684
Asset-based loan facility			7.25		%				March 2027						90,000						40,000
Finance leases and other financing obligations			5.44		%				Various						23,779						13,548
Convertible unsecured note			—		%				June 2023						—						4,000
Unamortized deferred costs and premium															(16,786)						(20,050)
Total debt obligations															701,177						665,932
Less: current installments															(11,970)						(12,428)
Total debt obligations excluding current installments															$	689,207					$	653,504

In connection with the GreenLeaf acquisition, the Company issued a $10,000 unsecured note bearing interest of 4.47%. The principal on the unsecured note is due in two equal installments on April 30, 2024 and 2025 and is presented under the caption “Finance leases and other financing obligations” in the table above. The convertible unsecured note matured on June 29, 2023 and was repaid in full, including all accrued interest, for $4,049 in cash.

On July 7, 2023, the Company entered into a sixth amendment to the ABL Credit Agreement which increased the aggregate commitments to $300,000, up from $200,000, maturing on March 11, 2027. The sixth amendment to the ABL was accounted for as a debt modification. The Company incurred transaction costs of $354 which were capitalized as deferred financing fees to be amortized over the term of the ABL, presented in other non-current assets in the Company’s consolidated balance sheet.

On August 31, 2023, the Company made a voluntary prepayment of $20,000 towards the senior secured term loan. In connection with the prepayment the Company wrote off unamortized deferred financing fees of $770 which are included in interest expense within the statement of operations.

Maturities of the Company’s debt, excluding finance leases, for the remainder of the fiscal year ending December 29, 2023 and each of the next four fiscal years and thereafter is as follows:

2023			$	750
2024			47,684
2025			8,000
2026			3,000
2027			93,000
Thereafter			551,750
Total			$	704,184

16

---

The net carrying value of the Company’s convertible notes as of September 29, 2023 and December 30, 2022 was:

						September 29, 2023																		December 30, 2022
						Principal Amount						Unamortized Deferred Costs and Premium						Net Amount						Principal Amount						Unamortized Deferred Costs and Premium						Net Amount
2028 Convertible Senior Notes						$	287,500					$	(6,016)					$	281,484					$	287,500					$	(6,876)					$	280,624
2024 Convertible Senior Notes						39,684						(232)						39,452						41,684						(373)						41,311
Convertible Unsecured Note						—						—						—						4,000						—						4,000
Total						$	327,184					$	(6,248)					$	320,936					$	333,184					$	(7,249)					$	325,935

The components of interest expense on the Company’s convertible notes were as follows:

			Thirteen Weeks Ended												Thirty-Nine Weeks Ended
			September 29, 2023						September 23, 2022						September 29, 2023						September 23, 2022
Coupon interest			$	1,893					$	938					$	5,685					$	2,813
Amortization of deferred costs and premium			333						224						1,001						672
Total interest			$	2,226					$	1,162					$	6,686					$	3,485

As of September 29, 2023, the Company had reserved $27,970 of the asset-based loan facility for the issuance of letters of credit and funds totaling $149,757 were available for borrowing.

Note 10 – Stockholders’ Equity

Equity Awards

The following table reflects the activity of RSAs during the thirty-nine weeks ended September 29, 2023:

						Time-based												Performance-based												Market-based
						Shares						Weighted Average Grant Date Fair Value						Shares						Weighted Average Grant Date Fair Value						Shares						Weighted Average Grant Date Fair Value
Unvested at December 30, 2022						464,972						$	31.74					335,425						$	32.25					333,114						$	30.30
Granted						234,070						32.23						742,744						33.17						87,942						28.84
Vested						(215,726)						31.84						—						—						—						—
Forfeited						(11,500)						34.31						—						—						—						—
Unvested at September 29, 2023						471,816						$	31.87					1,078,169						$	32.88					421,056						$	30.00

The Company granted 1,064,756 RSAs to its employees at a weighted average grant date fair value of $32.60 during the thirty-nine weeks ended September 29, 2023. These awards are a mix of time-, market- and performance-based grants that generally vest over a range of periods up to five years. The Company recognized expense totaling $4,730 and $3,099 on its RSAs during the thirteen weeks ended September 29, 2023 and September 23, 2022, respectively, and $14,224 and $9,081 during the thirty-nine weeks ended September 29, 2023 and September 23, 2022, respectively.

At September 29, 2023, the total unrecognized compensation cost for unvested RSAs was $30,006 and the weighted-average remaining period was approximately 2.5 years. Of this total, $10,915 related to RSAs with time-based vesting provisions and $19,091 related to RSAs with performance- and market-based vesting provisions. At September 29, 2023, the weighted-average remaining period for time-based vesting and performance-based vesting RSAs were approximately 2.2 years and 2.7 years, respectively.

17

---

No share-based compensation expense related to the Company’s RSAs or stock options has been capitalized. As of September 29, 2023, there were 1,087,180 shares available for grant under the 2019 Omnibus Equity Incentive Plan.

The following table summarizes stock option activity during the thirty-nine weeks ended September 29, 2023:

						Shares						Weighted Average Exercise Price						Aggregate Intrinsic Value						Weighted Average Remaining Contractual Term (in years)
Outstanding December 30, 2022						112,232						$	20.23					$	1,465					3.2
Exercised						(2,705)						20.23
Outstanding September 29, 2023						109,527						$	20.23					$	104					2.4
Exercisable at September 29, 2023						109,527						20.23						$	104					2.4

In connection with the CME acquisition, the Company issued stock awards to certain members of the CME management team

which were classified as liabilities. These awards vest over a period of up to 4 years. Stock-based compensation expense for

these awards was $544 and $0 during the thirteen weeks ended September 29, 2023 and September 23, 2022, respectively, and $1,631 and $0 during the thirty-nine weeks ended September 29, 2023 and September 23, 2022, respectively. The fair value of these awards was $1,994 and $362 as of September 29, 2023 and December 30, 2022, respectively, and is presented within Other liabilities and deferred credits on the Company’s condensed consolidated balance sheets.

Note 11 – Related Parties

 

The Chefs’ Warehouse Mid-Atlantic, LLC, a subsidiary of the Company, leases a distribution facility that is 100% owned by entities controlled by Christopher Pappas, the Company’s Chairman, President and Chief Executive Officer, and John Pappas, the Company’s Vice Chairman and one of its directors, and are deemed to be affiliates of these individuals. Expense related to this facility totaled $123 during the thirteen weeks ended September 29, 2023 and September 23, 2022, and $369 during the thirty-nine weeks ended September 29, 2023 and September 23, 2022.

Note 12 – Income Taxes

The Company’s effective tax rate was 48.3% and 27.0% for the thirteen weeks ended September 29, 2023 and September 23, 2022, respectively, and 36.8% and 27.0% for the thirty-nine weeks-ended September 29, 2023 and September 23, 2022, respectively. The higher effective tax rate for the thirteen and thirty-nine weeks ended September 29, 2023 is primarily due to a discrete $2,135 charge in the current period for return-to-provision adjustments related to certain nondeductible costs identified in the completion of the Company’s fiscal 2022 tax return and the impact of those adjustments on the fiscal 2023 estimated annual effective tax rate. The effective tax rate otherwise varies from the 21% statutory rate primarily due to state taxes.

The Company’s income tax provision reflects the impact of an expected income tax refund receivable of $22,475 as of September 29, 2023 which is reflected in prepaid expenses and other current assets on the Company’s consolidated balance sheet.

18

---

Note 13 – Supplemental Disclosures of Cash Flow Information

			Thirty-Nine Weeks Ended
			September 29, 2023						September 23, 2022
Supplemental cash flow disclosures:
Cash paid for income taxes			$	17,574					$	3,483
Cash paid for interest, net of cash received			$	28,339					$	17,636
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	28,203					$	20,835