FORM 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 1, 2012

 

 

THE CHEFS’ WAREHOUSE, INC.

 

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware   001-35249   20-3031526

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

100 East Ridge Road, Ridgefield, CT   06877
(Address of Principal Executive Offices)   (Zip Code)

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

Not Applicable

 

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operations and Financial Condition.

The following information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this report, regardless of any general incorporation language in the filing.

In a press release dated November 1, 2012 (the “Press Release”), The Chefs’ Warehouse, Inc. (the “Company”) announced financial results for the Company’s thirteen and thirty-nine weeks ended September 28, 2012. The full text of the Press Release is furnished herewith as Exhibit 99.1 to this report.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. The following exhibit is being furnished herewith to this Current Report on Form 8-K.

 

Exhibit No.

  

Description

99.1    Press Release of The Chefs’ Warehouse, Inc. dated November 1, 2012.

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

THE CHEFS’ WAREHOUSE, INC.
By:   /s/ John D. Austin
Name:   John D. Austin
Title:   Chief Financial Officer

Date: November 1, 2012


EXHIBIT INDEX

 

Exhibit No.

  

Description

99.1    Press Release of The Chefs’ Warehouse, Inc. dated November 1, 2012.
PRESS RELEASE

Exhibit 99.1

The Chefs’ Warehouse, Inc. Reports Third Quarter 2012 Financial Results

Net Sales Increased 22.7%

Ridgefield, CT, November 1, 2012 – The Chefs’ Warehouse, Inc. (NASDAQ: CHEF), a premier distributor of specialty food products in the United States, today reported financial results for its third quarter ended September 28, 2012.

Financial highlights for the third quarter of 2012:

 

   

Net sales increased 22.7% to $124.8 million

 

   

Gross profit increased 21.6% to $32.4 million

 

   

Earnings per diluted share available to common stockholders was $0.18

 

   

Modified pro forma earnings per diluted share available to common stockholders1, increased 10.5% to $0.21 per diluted share

 

   

Adjusted EBITDA1 increased 22.2% to $9.7 million

“We are pleased with progress we are making toward our long term goals, especially given generally softer macroeconomic trends and sales growth,” said Chris Pappas, chairman and chief executive officer of The Chefs’ Warehouse, Inc. “In this period of economic uncertainty, we continued to build our platform and lead the industry in top line growth. We are very excited about the addition of Michael’s Finer Meats to the Chefs’ family during the quarter, and we have continued to strengthen our company as we stay focused on growth in our core business. In addition to adding to our operating platform, we have added and will continue to add management and leadership talent to support our continued growth.”

“Based on our current assessment of Hurricane Sandy, we expect some short-term challenges due to the number of our customers impacted by the storm, which is reflected in our updated financial guidance. Despite these headwinds, we continue to be very active on the business development front and are looking forward to continued growth in 2013,” concluded Mr. Pappas.

Third Quarter 2012 Results

Net sales for the quarter ended September 28, 2012 increased approximately 22.7% to $124.8 million from $101.7 million for the quarter ended September 23, 2011. Acquisitions contributed the majority of this growth, or approximately 22.3% of the 22.7% total sales growth, as the Company lapped the planned attrition from the prior year’s acquisition of Harry Wils. Adjusted for this planned attrition, placements, number of unique customers and cases continued to grow in the mid single digits during the quarter compared to the prior year comparable quarter. Organic growth was positively impacted by approximately 1.7% of inflation, as the significant deflation in the dairy and cheese categories in the first and second quarters of 2012 moderated somewhat. Based on current trends and prior year pricing, we do expect the impact of planned attrition and the impact of dairy and cheese deflation to continue to moderate in the fourth quarter of 2012, which will be offset by the impact of a 53rd week in the fourth quarter of 2011.

Gross profit increased approximately 21.6% to $32.4 million for the third quarter of 2012 from $26.6 million for the third quarter of 2011. Gross profit margins decreased by 25 basis points to 25.9% for the third quarter of 2012 compared to the prior year comparable quarter. The decline in gross margins was due in large part to the acquisition of Michael’s on the Company’s overall product mix and related gross margin.

Total operating expenses increased by approximately 17.7% to $25.1 million for the third quarter of 2012 from $21.3 million for the third quarter of 2011. Warehouse, distribution and selling costs

 

1

Please see the Reconciliation of Modified Pro Forma Net Income to Net Income and the Reconciliation of EBITDA and Adjusted EBITDA to Net Income at the end of this earnings release for a reconciliation of EBITDA, Adjusted EBITDA, modified pro forma net income available to common stockholders and modified pro forma EPS to these measures’ most directly comparable GAAP measures.


increased approximately $3.0 million to $17.5 million, or 14.0% of net sales, which includes $260,000 of duplicate rent expense on our Bronx facility. Excluding the duplicate rent expense, warehouse, distribution and selling costs decreased 42 basis points to 13.8% of net sales compared to the prior year comparable quarter. In addition, G&A costs increased approximately $735,000 compared to the prior year third quarter, primarily as a result of investments in information technology initiatives, increased amortization expense from the Company’s acquisitions and stock compensation costs, offset by reduced accrued compensation costs. Stock compensation costs in the third quarter of 2012 included a $713,000 non-cash charge for the acceleration of vesting on shares related to the previously announced separation of the Company’s former chief operating officer from the Company.

Operating income increased approximately 37.2% to $7.3 million for the third quarter of 2012 compared to $5.3 million for the prior year quarter. Adjusted EBITDA1 increased 22.2% to $9.7 million for the third quarter of 2012 compared to $7.9 million in the prior year third quarter.

Interest expense was $1.0 million for the third quarter of 2012 compared to $7.2 million for the prior year’s third quarter. The decrease was due to lower debt levels as a result of the Company’s IPO in July of 2011, lower interest rates on the Company’s post-IPO credit facilities and the prior year write off of deferred financing fees related to pre-IPO debt, offset in part by incremental borrowings to fund the Provvista Specialty Foods, Praml International and Michael’s Finer Meats acquisitions.

Income tax expense was $2.5 million for the third quarter of 2012 compared to a net tax benefit of $724,000 in the third quarter of 2011. Our effective tax rate was 39.5% in the third quarter of 2012 compared to 37.9% in the prior year quarter, due primarily to the impact of the Company’s acquisitions on its combined state effective tax rate. Based on the Company’s current state allocation, we expect an effective tax rate of approximately 41.0% for the full year 2012.

Net income available to common stockholders was $3.8 million, or $0.18 per diluted share, for the third quarter of 2012 compared to a loss of $1.2 million, or $(0.06) per diluted share, for the third quarter of 2011.

On a non-GAAP basis, modified pro forma net income available to common stockholders1 was $4.4 million and modified pro forma EPS was $0.21 for the third quarter of 2012 compared to modified pro forma net income available to common stockholders of $4.0 million and modified pro forma EPS of $0.19 for the third quarter of 2011.

2012 Guidance

The Chefs’ Warehouse, Inc. is updating its financial guidance for fiscal year 2012:

 

   

Revenue between $460.0 million and $480.0 million.

 

   

Net income per diluted share between $0.70 and $0.76.

 

   

Modified pro forma net income per diluted share between $0.75 and $0.81.

The above guidance takes into account our current estimate of the impact of Hurricane Sandy, our recent acquisition of Praml International and Michael’s Finer Meats, the write-off of deferred financing fees from the refinancing of our senior secured credit facilities; duplicate rent expense that we expect to incur in 2012 during the renovation and expansion of our Bronx, NY distribution facility; a non-cash charge associated with the accelerated vesting of shares for the Company’s former chief operating officer; as well as the previously announced loss of drayage business from a low margin customer. We expect our estimated effective tax rate to be 41.0% and fully diluted share count to be approximately 20.9 million shares for fiscal 2012

 

2


Conference Call

The Company will host a conference call to discuss third quarter 2012 financial results today at 5:00 p.m. ET. Hosting the call will be Chris Pappas, the Company’s chairman and chief executive officer, and John Austin, the Company’s chief financial officer. The conference call can be accessed live over the phone by dialing (877) 705-6003 or for international callers (201) 493-6725. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or for international callers (858) 384-5517; the conference ID is 401972. The replay will be available until November 8, 2012. The call will also be webcast live from the Company’s investor relations website (http://investors.chefswarehouse.com).

Forward-Looking Statements

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the Company’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties and are based on current expectations and management estimates; actual results may differ materially. The risks and uncertainties which could impact these statements include, but are not limited to, the Company’s sensitivity to general economic conditions, including the current economic environment, changes in disposable income levels and consumer discretionary spending on food-away-from-home purchases; the Company’s vulnerability to economic and other developments in the geographic markets in which it operates; the risks of supply chain interruptions due to lack of long-term contracts, severe weather or more prolonged climate change, work stoppages or otherwise; the short-term and long-term effects of Hurricane Sandy on the Company’s business; the risk of loss of customers due to the fact that the Company does not customarily have long-term contracts with its customers; changes in the availability or cost of the Company’s specialty food products; the ability to effectively price the Company’s specialty food products and reduce the Company’s expenses; the relatively low margins of the foodservice distribution industry and the Company’s sensitivity to inflationary and deflationary pressures; the Company’s ability to successfully identify, obtain financing for and complete acquisitions of other foodservice distributors and to integrate and realize expected synergies from those acquisitions; increased fuel costs and expectations regarding the use of fuel surcharges; fluctuations in the wholesale prices of beef, poultry and seafood, including increases in these prices as a result of increases in the cost of feeding and caring for livestock; the loss of key members of the Company’s management team and the Company’s ability to replace such personnel; and the strain on the Company’s infrastructure and resources caused by its growth. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. A more detailed description of these and other risk factors is contained in the Company’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission on March 29, 2012. 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. Any projections of future results of operations are based on a number of assumptions, many of which are outside the Company’s control and should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. The Company may from time to time update these publicly announced projections, but it is not obligated to do so.

About The Chefs’ Warehouse

The Chefs’ Warehouse, Inc. (http://www.chefswarehouse.com) is a premier distributor of specialty food products in the United States focused on serving the specific needs of chefs who own and/or operate some of the nation’s leading menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools and specialty food stores. The Chefs’ Warehouse, Inc. carries and distributes more than 16,700 products to more than 10,500 customer locations throughout the United States.

 

3


Contacts:

Investor Relations

John Austin, (718) 684-8415

Media Relations

Ted Lowen, (646) 277-1238

 

4


THE CHEFS’ WAREHOUSE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

THIRTEEN AND THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 2012 AND SEPTEMBER 23, 2011

(unaudited; in thousands except share amounts and per share data)

 

     Thirteen Weeks Ended     Thirty-Nine Weeks Ended  
     September 28, 2012      September 23, 2011     September 28, 2012      September 23, 2011  

Net Sales

   $ 124,807       $ 101,681      $ 337,701       $ 284,118   

Cost of Sales

     92,430         75,051        248,804         209,199   
  

 

 

    

 

 

   

 

 

    

 

 

 

Gross Profit

     32,377         26,630        88,897         74,919   

Operating Expenses

     25,052         21,290        67,997         56,820   
  

 

 

    

 

 

   

 

 

    

 

 

 

Operating Income

     7,325         5,340        20,900         18,099   

Gain on Interest Rate Swap

     0         0        0         (81

Interest Expense

     1,010         7,249        2,454         14,042   

Loss on Sale of Assets

     3         0        3         3   
  

 

 

    

 

 

   

 

 

    

 

 

 

Pretax Income

     6,312         (1,909     18,443         4,135   

Provision for Taxes

     2,496         (724     7,536         1,648   
  

 

 

    

 

 

   

 

 

    

 

 

 

Net Income

   $ 3,816       $ (1,185   $ 10,907       $ 2,487   
  

 

 

    

 

 

   

 

 

    

 

 

 

Net Income Per Share

          

Basic

   $ 0.18       $ (0.06   $ 0.53       $ 0.15   

Diluted

   $ 0.18       $ (0.06   $ 0.52       $ 0.15   

Shares Outstanding

          

Basic

     20,662,956         18,696,304        20,571,848         16,547,077   

Diluted

     20,980,019         18,696,304        20,911,337         17,024,121   

 

5


THE CHEFS’ WAREHOUSE, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

AS OF SEPTEMBER 28, 2012 AND DECEMBER 30, 2011

(unaudited; in thousands)

 

     September 28,
2012
     December 30,
2011
 

Cash

   $ 2,194       $ 2,033   

Accounts receivable, net

     51,749         42,876   

Inventories, net

     37,719         23,873   

Deferred taxes, net

     1,631         1,448   

Prepaid expenses and other current assets

     6,754         3,364   
  

 

 

    

 

 

 

Total current assets

     100,047         73,594   

Restricted cash

     11,004         —     

Equipment and leasehold improvements, net

     9,333         5,379   

Software costs, net

     379         355   

Goodwill

     43,219         20,590   

Intangible assets, net

     37,165         5,115   

Deferred taxes, net

     855         1,401   

Other assets

     2,678         1,444   
  

 

 

    

 

 

 

Total assets

     204,680         107,878   
  

 

 

    

 

 

 

Accounts payable and accrued liabilities

     35,148         30,371   

Accrued liabilities

     3,689         3,839   

Accrued compensation

     3,264         3,508   

Current portion of long-term debt

     5,173         6,107   
  

 

 

    

 

 

 

Total current liabilities

     47,274         43,825   

Long-term debt, net of current portion

     120,798         39,590   

Other liabilities

     1,142         893   
  

 

 

    

 

 

 

Total liabilities

     169,214         84,308   

Preferred stock

     —           —     

Common stock

     210         208   

Additional paid in capital

     20,793         19,806   

Retained earnings

     14,463         3,556   
  

 

 

    

 

 

 

Stockholders equity

     35,466         23,570   

Total liabilities and stockholders equity

   $ 204,680       $ 107,878   
  

 

 

    

 

 

 

 

6


THE CHEFS’ WAREHOUSE, INC.

CONDENSED CASH FLOW STATEMENT

FOR THE THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 2012 AND SEPTEMBER 23, 2011

(unaudited; in thousands)

 

     September 28,
2012
    September 23,
2011
 

Cash flows from operating activities:

    

Net Income

   $ 10,907      $ 2,487   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     2,495        1,211   

Provision for allowance for doubtful accounts

     729        930   

Original issue discount amortization

     —          2,127   

Deferred credits

     224        (240

Deferred taxes

     362        792   

Unrealized gain on interest rate swap

     —          (81

Unrealized gain on forward contracts

     —          (38

Accrual of paid in kind interest

     —          1,825   

Write-off of deferred financing fees

     237        2,860   

Amortization of deferred financing fees

     307        645   

Stock compensation

     1,335        1,939   

Loss on asset disposal

     3        3   

Changes in assets and liabilities, net of acquisitions:

    

Accounts receivable

     (2,090     (6,760

Inventories

     (2,448     (1,631

Prepaid expenses and other current assets

     (3,361     (1,004

Accounts payable and accrued liabilities

     668        1,608   

Other assets

     (43     (204
  

 

 

   

 

 

 

Net cash provided by operating activities

     9,325        6,469   

Cash flows from investing activities:

    

Capital expenditures

     (2,733     (1,475

Cash paid for acquisitions

     (73,279     (8,908

Interest income on restricted cash

     (4  

Proceeds from asset disposals

     —          2   
  

 

 

   

 

 

 

Net cash used in investing activities

     (76,016     (10,381

Cash flows from financing activities:

    

Proceeds from IPO

       63,476   

Payment of debt

     (30,087     (91,759

Proceeds from new senior secured term loan

     40,000        30,000   

Payment of deferred financing fees

     (1,733     (1,158

Borrowings under revolving credit line

     229,958        282,112   

Payments under revolving credit line

     (170,940     (278,501

Surrender of shares to pay withholding taxes

     (346     (692
  

 

 

   

 

 

 

Net cash provided by financing activities

     66,852        3,478   
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

   $ 161      $ (434

Cash and cash equivalents at beginning of period

     2,033        1,978   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 2,194      $ 1,544   
  

 

 

   

 

 

 

 

7


THE CHEFS’ WAREHOUSE, INC.

RECONCILIATION OF EBITDA AND ADJUSTED EBITDA TO NET INCOME

THIRTEEN AND THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 2012 AND SEPTEMBER 23, 2011

(unaudited; in thousands)

 

     Thirteen Weeks Ended     Thirty-Nine Weeks Ended  
    

September 28,

2012

    

September 23,

2011

   

September 28,

2012

    

September 23,

2011

 

Net Income:

   $ 3,816       $ (1,185   $ 10,907       $ 2,487   

Interest expense

     1,010         7,249        2,454         14,042   

Depreciation & amortization

     1,112         429        2,495         1,211   

Provision for income tax expense

     2,496         (724     7,536         1,648   
  

 

 

    

 

 

   

 

 

    

 

 

 

EBITDA (1)

     8,434         5,769        23,392         19,388   

Adjustments:

          

Gain on fluctuation of interest rate swap (2)

     —           —          —           (81

(Gain)/Loss on the marking to market of foreign exchange contracts (3)

     —           206        —           (37

Stock compensation (4)

     975         1,939        1,335         1,939   

Prior year’s customs duty refund(5)

     —           —          —           (202

Duplicate rent(6)

     260         —          444         —     

Workers compensation trust settlement(7)

     —           —          —           116   
  

 

 

    

 

 

   

 

 

    

 

 

 

Adjusted EBITDA (1)

   $ 9,669       $ 7,914      $ 25,171       $ 21,123   
  

 

 

    

 

 

   

 

 

    

 

 

 

 

1. We are presenting EBITDA and Adjusted EBITDA, which are not measurements determined in accordance with the U.S. generally accepted accounting principles, or GAAP, because we believe these measures provide additional metrics to evaluate our operations and which we believe, when considered with both our GAAP results and the reconciliation to net income, provide a more complete understanding of our business than could be obtained absent this disclosure. We use EBITDA and Adjusted EBITDA, together with financial measures prepared in accordance with GAAP, such as revenue and cash flows from operations, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. The use of EBITDA and Adjusted EBITDA as performance measures permits a comparative assessment of our operating performance relative to our performance based upon GAAP results while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies.
2. Represents the gain we experienced on our interest rate swap in each period. When we entered into our interest rate swap in 2005, we did not elect to account for it under hedge accounting rules. As such, the mark to market movement of the swap is recorded through our statement of operations. This interest rate swap expired in January 2011.
3. Represents the unrealized (gain)/loss we experienced on our Eurodollar collar we entered into in the first quarter of 2011 as a hedge against imported products denominated and paid for in Euros.
4. Represents non-cash stock compensation expense associated with awards of restricted shares of our common stock to our key employees and our non-executive outside directors.
5. Represents a refund received for the overpayment of import tariffs since 2007.
6. Represents rent expense incurred on the renovation and expansion of our Bronx, NY distribution facility while we are unable to use the facility.
7. Represents the settlement recorded with the New York Transportation Industry Workers Compensation Trust.

 

8


THE CHEFS’ WAREHOUSE, INC.

RECONCILIATION OF MODIFIED PRO FORMA NET INCOME TO NET INCOME

THIRTEEN AND THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 2012 AND SEPTEMBER 23, 2011

(unaudited; in thousands except share amounts and per share data)

Adjustments to Reconcile Modified Pro Forma Net Income to Net Income (1)

 

     Thirteen Weeks Ended     Thirty-Nine Weeks Ended  
     September 28, 2012     September 23, 2011     September 28, 2012     September 23, 2011  

Net Income

   $ 3,816      $ (1,185   $ 10,907      $ 2,487   

Incremental Public Company Costs (2)

     —          (100     —          (750

Stock Compensation Charges(3)

     713        1,822        713        1,592   

Interest Expense (4)

     —          1,349        —          7,292   

Write-off of Deferred Financing Fees (5)

     —          2,860        237        2,860   

Call Premium (6)

     —          827        —          827   

Original Issue Discount Write-Off (7)

     —          1,708        —          1,708   

Duplicate Rent (8)

     260        —          444        —     

Tax Effect Adjustments (9)

     (384     (3,281     (568     (5,256
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjustments

     589        5,185        826        8,273   
  

 

 

   

 

 

   

 

 

   

 

 

 

Modified Pro Forma Net Income

   $ 4,405      $ 4,000      $ 11,733      $ 10,760   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted Earnings per Share - Modified Pro Forma

   $ 0.21      $ 0.19      $ 0.56      $ 0.51   

Diluted Shares Outstanding - Modified Pro Forma (10)

     20,980,019        20,980,019        20,911,337        20,911,337   

 

1. We are presenting modified pro forma net income attributable to common stockholders and modified pro forma EPS, which are not measurements determined in accordance with U.S. generally accepted accounting principles, or GAAP, because we believe these measures provide additional metrics to evaluate our operations and which we believe, when considered with both our GAAP results and the reconciliation to net income attributable to common stockholders, provide a more complete understanding of our business than could be obtained absent this disclosure. We use modified pro forma net income attributable to common stockholders and modified pro forma EPS, together with financial measures prepared in accordance with GAAP, such as revenue and cash flows from operations, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. The use of modified pro forma net income and modified pro forma EPS as performance measures permits a comparative assessment of our operating performance relative to our performance based upon our GAAP results while isolating the effects of our IPO and some items that vary from period to period without any correlation to core operating performance.
2. Represents an estimate of recurring incremental legal, accounting, insurance and other compliance costs we expect to incur as a public company.
3. In 2011, represents the compensation charge on vesting equity grants provided at the time of the Company’s initial public offering (IPO). For 2012, represents the accelerated vesting of equity grants given to our former COO upon his separation from the Company.
4. Represents an adjustment to interest expense assuming post-IPO leverage levels under the senior secured credit facility that we entered into upon consummation of our IPO.
5. Represents write-off of deferred financing fees upon refinancing our senior secured credit facilities in April 2012 and August 2011.
6. Represents a call premium payable upon retirement of our senior secured notes in connection with our IPO.
7. Represents a non-cash charge associated with the write-off of original issue discount upon retirement of our senior secured term loan in connection with our IPO.
8. Represents rent expense incurred on the renovation and expansion of our Bronx, NY distribution facility while we are unable to use the facility.
9. Represents the tax impact of adjustments 2 through 8 above.
10. Represents diluted shares outstanding of our common stock. For comparative purposes, diluted shares outstanding for the prior year is the same as diluted shares outstanding calculated for the current year.

 

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THE CHEFS’ WAREHOUSE, INC.

2012 FULLY DILUTED EPS GUIDANCE RECONCILIATION TO 2012 MODIFIED PRO FORMA

FULLY DILUTED EPS GUIDANCE(1)

 

     Low-End
Guidance
     High-End
Guidance
 

Net income per diluted share

     0.70         0.76   

Duplicate facility rent(2)

     0.02         0.02   

Write-off of deferred financing fees(3)

     0.01         0.01   

Stock compensation charge(4)

     0.02         0.02   

Modified pro forma net income per diluted share

     0.75         0.81   

 

1. Guidance is based upon an estimated effective tax rate of 41.0% and an estimated fully diluted share count of 20,884,997.
2. Represents rent expense expected to be incurred in connection with the renovation and expansion of our Bronx facility while we are unable to utilize the facility during construction.
3. Represents write-off of deferred financing fees from refinancing our senior secured credit facilities in April 2012.
4. Represents the accelerated vesting of equity grants given to our former COO upon his separation from the company.

 

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