RIDGEFIELD, Conn., Feb. 12, 2020 (GLOBE NEWSWIRE) — The Chefs’ Warehouse, Inc. (NASDAQ: CHEF) (the “Company”), a premier distributor of specialty food products in the United States and Canada, today reported financial results for its fourth quarter ended December 27, 2019.
Financial highlights for the fourth quarter of 2019 compared to the fourth quarter of 2018:Net sales increased 8.2% to $426.5 million for the fourth quarter of 2019 from $394.1 million for the fourth quarter of 2018.
GAAP net income was $10.9 million, or $0.36 per diluted share, for the fourth quarter of 2019 compared to $8.9 million, or $0.30 per diluted share, in the fourth quarter of 2018.
Adjusted EPS1 was $0.39 for the fourth quarter of 2019 compared to $0.32 for the fourth quarter of 2018.Adjusted EBITDA1 was $28.2 million for the fourth quarter of 2019 compared to $24.6 million for the fourth quarter of 2018.“We finished 2019 with solid revenue performance amidst a healthy consumer demand environment during the fourth quarter,” said Chris Pappas, chairman and chief executive officer of The Chefs’ Warehouse, Inc. “We enter 2020 celebrating our thirty-fifth year of operations. We are excited to continue on our path of growth and our mission of providing our customers with the highest quality ingredients and service that the Chefs’ Warehouse family and portfolio of brands have delivered since our company’s inception.”Fourth Quarter Fiscal 2019 ResultsNet sales for the quarter ended December 27, 2019 increased 8.2% to $426.5 million from $394.1 million for the quarter ended December 28, 2018. Organic growth contributed $16.2 million, or 4.1% to sales growth in the quarter. The remaining sales growth of $16.2 million, or 4.1%, resulted from acquisitions. Organic case count grew approximately 2.3% in the Company’s specialty category with unique customers and placements growth at 3.8% and 2.5%, respectively, compared to the prior year quarter. Pounds sold in the Company’s center-of-the-plate category decreased approximately 2.1% compared to the prior year quarter. Estimated inflation was 3.1% in the Company’s specialty categories and 5.3% in the center-of-the-plate categories compared to the prior year quarter.Gross profit increased approximately 5.3% to $107.7 million for the fourth quarter of 2019 from $102.3 million for the fourth quarter of 2018. Gross profit margin decreased approximately 71 basis points to 25.3% from 26.0%. Gross margins in the Company’s specialty category increased 36 basis points and gross margins decreased 185 basis points in the Company’s center-of-the-plate category compared to the prior year quarter.Total operating expenses increased by approximately 5.6% to $89.3 million for the fourth quarter of 2019 from $84.5 million for the fourth quarter of 2018. As a percentage of net sales, operating expenses were 20.9% in the fourth quarter of 2019 compared to 21.4% in the fourth quarter of 2018. Operating expenses as a percentage of sales was favorably impacted by lower general and administrative expenses, primarily due to lower compensation and benefits related costs, partially offset by higher warehouse costs related to the Company’s investment in Texas and its new facility in Los Angeles.Operating income for the fourth quarter of 2019 was $18.4 million compared to $17.8 million for the fourth quarter of 2018. The increase in operating income was driven primarily by increased gross profit, offset in part by higher operating expenses, as discussed above. As a percentage of net sales, operating income was 4.4% in the fourth quarter of 2019 as compared to 4.6% in the fourth quarter of 2018.Total interest expense decreased to $4.4 million for the fourth quarter of 2019 compared to $5.7 million for the fourth quarter of 2018. The decrease was primarily driven by a $1.1 million write-off of deferred financing fees during the fourth quarter of 2018 associated with the re-pricing of the Company’s Term Loan and lower effective interest charged on the Company’s outstanding debt.Net income for the fourth quarter of 2019 was $10.9 million, or $0.36 per diluted share, compared to net income of $8.9 million, or $0.30 per diluted share, for the fourth quarter of 2018.Adjusted EBITDA1 was $28.2 million for the fourth quarter of 2019 compared to $24.6 million for the fourth quarter of 2018. For the fourth quarter of 2019, adjusted net income1 was $12.1 million, or $0.39 per diluted share compared to adjusted net income of $9.6 million, or $0.32 per diluted share for the fourth quarter of 2018.Full Year 2020 GuidanceBased on current trends in the business, the Company is providing the following financial guidance for fiscal year 2020:Net sales between $1.85 billion and $1.91 billionGross profit between $478.0 million and $492.0 millionNet income between $26.9 million and $29.8 millionNet income per diluted share between $0.86 and $0.95Adjusted EBITDA1 between $102.0 million and $106.0 millionAdjusted EPS1 between $0.91 and $1.00This guidance is based on an effective tax rate of approximately 28.0% for fiscal 2020. Our full year estimated diluted share count is approximately 33.6 million shares. The Company expects its senior convertible notes to be dilutive for the full year and accordingly, those shares that could be issued upon conversion of the notes are included in the fully diluted share count.1EBITDA, Adjusted EBITDA, adjusted net income and adjusted EPS are non-GAAP measures. Please see the schedules accompanying this earnings release for a reconciliation of EBITDA, Adjusted EBITDA, adjusted net income and adjusted EPS to these measures’ most directly comparable GAAP measure.Fourth Quarter 2019 Earnings Conference CallThe Company will host a conference call to discuss fourth quarter 2019 financial results today at 5:00 p.m. EST. Hosting the call will be Chris Pappas, chairman and chief executive officer, and Jim Leddy, chief financial officer. The conference call will be webcast live from the Company’s investor relations website at http://investors.chefswarehouse.com/. The call can also be accessed live over the phone by dialing (877) 407-4018, or for international callers (201) 689-8471. A replay will be available one hour after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 13698025. The replay will be available until Wednesday, February 19, 2020, and an online archive of the webcast will be available on the Company’s investor relations website for 30 days.Forward-Looking StatementsSafe 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 disposable income levels and changes in consumer discretionary spending; the Company’s ability to expand its operations in its existing markets and to penetrate new markets through acquisitions; the Company may not achieve the benefits expected from its acquisitions, which could adversely impact its business and operating results; the Company may have difficulty managing and facilitating its future growth; conditions beyond the Company’s control could materially affect the cost and/or availability of its specialty food products or center-of-the-plate products and/or interrupt its distribution network; the Company’s increased distribution of center-of-the-plate products, like meat, poultry and seafood, involves increased exposure to price volatility experienced by those products; the Company’s business is a low-margin business and its profit margins may be sensitive to inflationary and deflationary pressures; because the Company’s foodservice distribution operations are concentrated in certain culinary markets, the Company is susceptible to economic and other developments, including adverse weather conditions, in these areas; fuel cost volatility may have a material adverse effect on the Company’s business, financial condition or results of operations; the Company’s ability to raise capital in the future may be limited; the Company may be unable to obtain debt or other financing, including financing necessary to execute on our acquisition strategy, on favorable terms or at all; and the Company’s business operations and future development could be significantly disrupted if it loses key members of its management team. 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 (“SEC”) on March 1, 2019 and other reports 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. 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’ WarehouseThe Chefs’ Warehouse, Inc. (http://www.chefswarehouse.com) is a premier distributor of specialty food products in the United States and Canada 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, bakeries, patisseries, chocolatiers, cruise lines, casinos and specialty food stores. The Chefs’ Warehouse, Inc. carries and distributes more than 55,000 products to more than 34,000 customer locations throughout the United States and Canada.Contact:
Investor Relations
Jim Leddy, CFO, (718) 684-8415THE CHEFS’ WAREHOUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except share amounts and per share data)
THE CHEFS’ WAREHOUSE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 27, 2019 AND DECEMBER 28, 2018
(in thousands)(1) Fiscal 2019 includes new balance sheet captions due to the adoption of the new lease accounting standard, effective on the first day of fiscal 2019
THE CHEFS’ WAREHOUSE, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FIFTY-TWO WEEKS ENDED DECEMBER 27, 2019 AND DECEMBER 28, 2018
(unaudited, in thousands)
THE CHEFS’ WAREHOUSE, INC.
RECONCILIATION OF GAAP NET INCOME PER COMMON SHARE
(unaudited; in thousands except share amounts and per share data)
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