• The Chefs’ Warehouse Reports Fourth Quarter 2021 Financial Results

    Источник: Nasdaq GlobeNewswire / 09 фев 2022 07:00:01   America/New_York

    RIDGEFIELD, Conn., Feb. 09, 2022 (GLOBE NEWSWIRE) -- The Chefs’ Warehouse, Inc. (NASDAQ: CHEF) (the “Company” or “Chefs’”), a premier distributor of specialty food products in the United States and Canada, today reported financial results for its fourth quarter ended December 24, 2021.

    Financial highlights for the fourth quarter of 2021:

    • Net sales increased 98.2% to $558.3 million for the fourth quarter of 2021 from $281.7 million for the fourth quarter of 2020.
    • GAAP net income was $8.4 million, or $0.22 per diluted share, for the fourth quarter of 2021 compared to net loss of $37.1 million, or $(1.02) per diluted share, in the fourth quarter of 2020.
    • Adjusted EPS1 was $0.26 for the fourth quarter of 2021 compared to $(0.52) for the fourth quarter of 2020.
    • Adjusted EBITDA1 was $30.2 million for the fourth quarter of 2021 compared to negative adjusted EBITDA of $(10.5) million for the fourth quarter of 2020.

    “Revenue trends were strong in the fourth quarter as we saw continued growth in consumer confidence in dining out across our markets,” said Chris Pappas, Chairman and Chief Executive Officer of the Company. “December sales and business activity grew steadily as holiday customer traffic drove sequential volume increases commensurate with pre-COVID periods, even with a reduction in larger corporate parties and events.”

    Fourth Quarter Fiscal 2021 Results

    Net sales for the quarter ended December 24, 2021 increased 98.2% to $558.3 million from $281.7 million for the quarter ended December 25, 2020. Organic sales increased $252.1 million, or 89.5% versus the prior year quarter. Sales growth of $24.4 million, or 8.7%, resulted from acquisitions. Organic case count increased approximately 67.5% in the Company’s specialty category with unique customers and placements increases at 35.0% and 55.5%, respectively, compared to the prior year quarter. Organic pounds sold in the Company’s center-of-the-plate category increased approximately 49.3% compared to the prior year quarter. Estimated inflation was 12.5% in the Company’s specialty categories and 29.2% in the center-of-the-plate categories compared to the prior year quarter.

    Gross profit increased approximately 113.5% to $125.7 million for the fourth quarter of 2021 from $58.9 million for the fourth quarter of 2020. Gross profit margin increased approximately 161 basis points to 22.5% from 20.9%. Gross margins in the Company’s specialty category increased 637 basis points and gross margins decreased 291 basis points in the Company’s center-of-the-plate category compared to the prior year quarter.

    Selling, general and administrative expenses increased by approximately 31.7% to $109.2 million for the fourth quarter of 2021 from $82.9 million for the fourth quarter of 2020. These increases were primarily volume-based increases to support our sales growth for the quarter ended December 24, 2021. As a percentage of net sales, operating expenses were 19.6% in the fourth quarter of 2021 compared to 29.4% in the fourth quarter of 2020.

    Other operating expense decreased by approximately $23.6 million primarily due to a $24.2 million impairment charge for Del Monte and Bassian trademarks in the prior year period.

    Operating income for the fourth quarter of 2021 was $15.8 million compared to operating loss of $48.3 million for the fourth quarter of 2020. The increase in operating income was driven primarily by higher gross profit, partially offset by higher selling, general and administrative, as discussed above. As a percentage of net sales, operating income was 2.8% in the fourth quarter of 2021 as compared to operating loss of 17.1% in the fourth quarter of 2020.

    Total interest expense decreased to $4.2 million for the fourth quarter of 2021 compared to $5.3 million for the fourth quarter of 2020. The decrease in interest expense is the result of lower effective interest rates charged on the Company’s outstanding debt.

    Net income for the fourth quarter of 2021 was $8.4 million, or $0.22 per diluted share, compared to net loss of $37.1 million, or $(1.02) per diluted share, for the fourth quarter of 2020.

    Adjusted EBITDA1 was $30.2 million for the fourth quarter of 2021 compared to negative adjusted EBITDA of $(10.5) million for the fourth quarter of 2020. For the fourth quarter of 2021, adjusted net income1 was $10.2 million, or $0.26 per diluted share compared to adjusted net loss of $19.0 million, or $(0.52) per diluted share for the fourth quarter of 2020.

    Full Year 2022 Guidance

    Based on current trends in the business, the Company is providing the following financial guidance for fiscal year 2022:

    • Net sales between $2.1 billion and $2.2 billion
    • Gross profit between $494 million and $517 million; and
    • Adjusted EBITDA between $99 million and $111 million.

    Fourth Quarter 2021 Earnings Conference Call

    The Company will host a conference call to discuss fourth quarter 2021 financial results today at 8:30 a.m. EDT. 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. An online archive of the webcast will be available on the Company’s investor relations website.

    Forward-Looking Statements

    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 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 distribution of center-of-the-plate products, like meat, poultry and seafood, involves 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 London Interbank Offered Rate (LIBOR), or the replacement of LIBOR with an alternative rate; 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 COVID-19, 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 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 SEC on February 23, 2021 and other reports filed by the Company with the SEC since that date. The Company is not undertaking to update any information until 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 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, chocolateries, cruise lines, casinos and specialty food stores. The Chefs’ Warehouse, Inc. carries and distributes more than 50,000 products to more than 35,000 customer locations throughout the United States and Canada.

    Contact:
    Investor Relations
    Jim Leddy, CFO, (718) 684-8415

    1 EBITDA, Adjusted EBITDA, adjusted net income (loss) 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 (loss) and adjusted EPS to these measures’ most directly comparable GAAP measure.


    THE CHEFS’ WAREHOUSE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (unaudited, in thousands except share amounts and per share data)

     Thirteen Weeks Ended Fifty-Two Weeks Ended
     December 24,
    2021    		 December 25,
    2020    		 December 24,
    2021    		 December 25,
    2020
    Net sales$558,251 $281,674  $1,745,757  $1,111,631 
    Cost of sales 432,562  222,799   1,355,272   863,480 
    Gross profit 125,689  58,875   390,485   248,151 
            
    Selling, general and administrative expenses 109,218  82,914   379,252   336,394 
    Other operating expenses, net 630  24,229   422   14,417 
    Operating income (loss) 15,841  (48,268)  10,811   (102,660)
            
    Interest expense 4,225  5,344   17,587   20,946 
    Income (loss) before income taxes 11,616  (53,612)  (6,776)  (123,606)
            
    Provision for income tax expense (benefit) 3,172  (16,555)  (1,853)  (40,703)
            
    Net income (loss)$8,444 $(37,057) $(4,923) $(82,903)
            
            
    Net income (loss) per share:       
    Basic$0.23 $(1.02) $(0.13) $(2.46)
    Diluted$0.22 $(1.02) $(0.13) $(2.46)
            
    Weighted average common shares outstanding:       
    Basic 36,879,240  36,281,698   36,744,304   33,716,157 
    Diluted 41,795,193  36,281,698   36,744,304   33,716,157 


    THE CHEFS’ WAREHOUSE, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    AS OF DECEMBER 24, 2021 AND DECEMBER 25, 2020
    (in thousands)

     December 24, 2021 December 25, 2020
     (unaudited)  
    Cash and cash equivalents$115,155  $193,281 
    Accounts receivable, net 172,540   96,383 
    Inventories, net 144,491   82,519 
    Prepaid expenses and other current assets 37,774   33,479 
    Total current assets 469,960   405,662 
        
    Equipment, leasehold improvements and software, net 133,622   115,448 
    Operating lease right-of-use assets 130,701   115,224 
    Goodwill 221,775   214,864 
    Intangible assets, net 104,743   111,717 
    Deferred taxes, net 9,380   7,535 
    Other assets 3,614   3,875 
    Total assets$1,073,795  $974,325 
        
        
    Accounts payable$118,284  $57,515 
    Accrued liabilities 35,390   27,924 
    Short-term operating lease liabilities 15,882   17,167 
    Accrued compensation 22,321   9,401 
    Current portion of long-term debt 5,141   6,095 
    Total current liabilities 197,018   118,102 
        
    Long-term debt, net of current portion 394,160   398,084 
    Operating lease liabilities 127,296   109,133 
    Other liabilities 5,110   4,416 
    Total liabilities 723,584   629,735 
        
    Preferred stock —   — 
    Common stock 380   373 
    Additional paid in capital 314,242   303,734 
    Cumulative foreign currency translation adjustment (2,022)  (2,051)
    Retained earnings 37,611   42,534 
    Stockholders’ equity 350,211   344,590 
        
    Total liabilities and stockholders’ equity$1,073,795  $974,325 


    THE CHEFS’ WAREHOUSE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    FOR THE FIFTY-TWO WEEKS ENDED DECEMBER 24, 2021 AND DECEMBER 25, 2020
    (unaudited, in thousands)

     December 24,
    2021    		 December 25,
    2020
    Cash flows from operating activities:   
    Net loss$(4,923) $(82,903)
        
    Adjustments to reconcile net loss to net cash (used in) provided by operating activities:   
    Depreciation and amortization 21,998   19,774 
    Amortization of intangible assets 12,967   13,502 
    (Benefit) provision for allowance for doubtful accounts (422)  21,372 
    Non-cash operating lease expense 1,402   689 
    Benefit for deferred income taxes (1,845)  (18,418)
    Amortization of deferred financing fees 2,299   3,426 
    Stock compensation 11,479   9,292 
    Change in fair value of contingent earn-out liabilities (1,296)  (11,479)
    Intangible asset impairment 597   24,200 
    Loss on asset disposal 193   151 
    Changes in assets and liabilities, net of acquisitions:   
    Accounts receivable (70,777)  77,590 
    Inventories (60,799)  49,050 
    Prepaid expenses and other current assets (2,183)  (18,240)
    Accounts payable, accrued liabilities and accrued compensation 71,519   (46,442)
    Other assets and liabilities (108)  1,317 
    Net cash (used in) provided by operating activities (19,899)  42,881 
        
    Cash flows from investing activities:   
    Capital expenditures (38,801)  (7,036)
    Cash paid for acquisitions (10,190)  (60,932)
    Net cash used in investing activities (48,991)  (67,968)
        
    Cash flows from financing activities:   
    Payment of debt, finance lease and other financing obligations (37,610)  (40,432)
    Proceeds from the issuance of common stock, net of issuance costs —   85,941 
    Proceeds from debt issuance 51,750   — 
    Payment of deferred financing fees (1,450)  (856)
    Surrender of shares to pay withholding taxes (1,829)  (3,670)
    Cash paid for contingent earn-out liabilities (83)  (2,927)
    Borrowings under asset based loan facility —   100,000 
    Payments under asset based loan facility (20,000)  (60,000)
    Net cash (used in) provided by financing activities (9,222)  78,056 
        
    Effect of foreign currency translation on cash and cash equivalents (14)  79 
        
    Net (decrease) increase in cash and cash equivalents (78,126)  53,048 
    Cash and cash equivalents at beginning of period 193,281   140,233 
    Cash and cash equivalents at end of period$115,155  $193,281 


    THE CHEFS’ WAREHOUSE, INC.
    RECONCILIATION OF GAAP NET INCOME (LOSS) PER COMMON SHARE
    (unaudited; in thousands except share amounts and per share data)

     Thirteen Weeks Ended Fifty-Two Weeks Ended
     December 24,
    2021    		 December 25,
    2020    		 December 24,
    2021    		 December 25,
    2020
    Numerator:       
    Net income (loss)$8,444 $(37,057) $(4,923) $(82,903)
    Add effect of dilutive securities:       
    Interest on convertible notes, net of tax 673  —   —   — 
    Net income (loss) available to common shareholders$9,117 $(37,057) $(4,923) $(82,903)
    Denominator:       
    Weighted average basic common shares outstanding 36,879,240  36,281,698   36,744,304   33,716,157 
    Dilutive effect of unvested common shares 341,965  —   —   — 
    Dilutive effect of options and warrants 49,008  —   —   — 
    Dilutive effect of convertible notes 4,524,980  —   —   — 
    Weighted average diluted common shares outstanding 41,795,193  36,281,698   36,744,304   33,716,157 
            
    Net income (loss) per share:       
    Basic$0.23 $(1.02) $(0.13) $(2.46)
    Diluted$0.22 $(1.02) $(0.13) $(2.46)


    THE CHEFS’ WAREHOUSE, INC.
    RECONCILIATION OF EBITDA AND ADJUSTED EBITDA TO NET INCOME (LOSS)
    (unaudited; in thousands)

     Thirteen Weeks Ended Fifty-Two Weeks Ended
     December 24,
    2021    		 December 25,
    2020    		 December 24,
    2021    		 December 25,
    2020
    Net income (loss)$8,444 $(37,057) $(4,923) $(82,903)
    Interest expense 4,225  5,344   17,587   20,946 
    Depreciation 5,728  5,060   21,998   19,774 
    Amortization 3,189  3,391   12,967   13,502 
    Provision for income tax expense (benefit) 3,172  (16,555)  (1,853)  (40,703)
    EBITDA (1) 24,758  (39,817)  45,776   (69,384)
            
    Adjustments:       
    Stock compensation (2) 3,031  4,367   11,479   9,292 
    Other operating expenses, net (3) 630  24,229   422   14,417 
    Duplicate rent (4) 1,749  700   4,073   2,795 
    Payroll tax credit (5) —  —   (1,418)  — 
    Moving expenses (6) 75  —   965   — 
            
    Adjusted EBITDA (1)$30,243 $(10,521) $61,297  $(42,880)
    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 non-cash stock compensation expense associated with awards of restricted shares of our common stock and stock options to our key employees and our independent directors.
    3. Represents non-cash changes in the fair value of contingent earn-out liabilities related to our acquisitions, non-cash charges related to asset disposals, asset impairments, including intangible asset impairment charges, and certain third-party deal costs incurred in connection with our acquisitions or financing arrangements.
    4. Represents duplicate rent and occupancy costs for our Los Angeles, CA, Richmond, CA, and Miami, FL facilities.
    5. Represents a payroll tax credit earned in accordance with the Employee Retention Credit under the CARES Act.
    6. Represents moving expenses for the consolidation of certain facilities in New England and California.


    THE CHEFS’ WAREHOUSE, INC.
    RECONCILIATION OF ADJUSTED NET INCOME (LOSS) TO NET INCOME (LOSS)
    (unaudited; in thousands except share amounts and per share data)

     Thirteen Weeks Ended Fifty-Two Weeks Ended
     December 24,
    2021    		 December 25,
    2020    		 December 24,
    2021    		 December 25,
    2020
    Net income (loss)$8,444  $(37,057) $(4,923) $(82,903)
            
    Adjustments to reconcile net income (loss) to adjusted net income (loss) (1):       
    Other operating expenses (2) 630   24,229   422   14,417 
    Duplicate rent (3) 1,749   700   4,073   2,795 
    Moving expenses (4) 75   —   965   — 
    Third party debt modification fees (5) —   —   —   1,233 
    Payroll tax credit (6) —   —   (1,418)  — 
    Tax effect of adjustments (7) (687)  (6,855)  (1,132)  (5,072)
            
    Total adjustments 1,767   18,074   2,910   13,373 
            
    Adjusted net income (loss)$10,211  $(18,983) $(2,013) $(69,530)
            
    Diluted adjusted income (loss) per common share$0.26  $(0.52) $(0.05) $(2.06)
            
    Diluted shares outstanding - adjusted 41,795,193   36,281,698   36,744,304   33,716,157 
    1. We are presenting adjusted net income and adjusted earnings per common share (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 available to common stockholders, provide a more complete understanding of our business than could be obtained absent this disclosure. We use adjusted net income available to common stockholders and adjusted 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 adjusted net income available to common stockholders and adjusted 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 some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies.

    2. Represents non-cash changes in the fair value of contingent earn-out liabilities related to our acquisitions, non-cash charges related to asset disposals, asset impairments, including intangible asset impairments, and certain third-party deal costs incurred in connection with our acquisitions or financing arrangements.

    3. Represents duplicate rent and occupancy costs for our Los Angeles, CA, Richmond, CA, and Miami, FL facilities.

    4. Represents moving expenses for the consolidation of certain facilities in New England and California.

    5. Represents interest expense related to investment banking fees paid in connection with the modification of our senior secured term loan.

    6. Represents a payroll tax credit earned in accordance with the Employee Retention Credit under the CARES Act.

    7. Represents the tax effect of items 2 through 6 above.

    THE CHEFS’ WAREHOUSE, INC.
    RECONCILIATION OF ADJUSTED EARNINGS PER COMMON SHARE
    (unaudited; in thousands except share amounts and per share data)

     Thirteen Weeks Ended Fifty-Two Weeks Ended
     December 24,
    2021    		 December 25,
    2020    		 December 24,
    2021    		 December 25,
    2020
    Numerator:       
    Adjusted net income (loss)$10,211 $(18,983) $(2,013) $(69,530)
    Add effect of dilutive securities:       
    Interest on convertible notes, net of tax 673  —   —   — 
    Adjusted net income (loss) available to common shareholders$10,884 $(18,983) $(2,013) $(69,530)
    Denominator:       
    Weighted average basic common shares outstanding 36,879,240  36,281,698   36,744,304   33,716,157 
    Dilutive effect of unvested common shares 341,965  —   —   — 
    Dilutive effect of options and warrants 49,008  —   —   — 
    Dilutive effect of convertible notes 4,524,980  —   —   — 
    Weighted average diluted common shares outstanding 41,795,193  36,281,698   36,744,304   33,716,157 
            
    Adjusted earnings per share:       
    Diluted$0.26 $(0.52) $(0.05) $(2.06)

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