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Performance Food pany(PFGC) - 2024 Q4 - Annual Report
PFGCPerformance Food pany(PFGC)2024-08-14 20:15
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Acquisition and Investments - The company entered into a definitive Stock Purchase Agreement to acquire Cheney Bros., Inc. for a transaction valued at 2.1billion,subjecttocustomaryconditionsandregulatoryapprovals[10].−TheCompanypaid2.1 billion, subject to customary conditions and regulatory approvals[10]. - The Company paid 307.7 million for two acquisitions in fiscal year 2024, compared to 63.8millionforoneacquisitioninfiscalyear2023[256].−TheCompanyisintheprocessofacquiringCheneyBros.,Inc.for63.8 million for one acquisition in fiscal year 2023[256]. - The Company is in the process of acquiring Cheney Bros., Inc. for 2.1 billion, expected to be financed through borrowing and new senior unsecured notes[256]. - The total purchase price allocation for the two acquisitions in fiscal 2024 includes 22.5millioninnetworkingcapitaland22.5 million in net working capital and 116.4 million in goodwill[257]. - The Core-Mark acquisition, valued at 2.4billion,resultedinnetsalesof2.4 billion, resulted in net sales of 14.5 billion and a net loss of 17.6millionforthefiscalyearendedJuly2,2022[261].FinancialPerformance−NetsalesforthefiscalyearendedJune29,2024,were17.6 million for the fiscal year ended July 2, 2022[261]. Financial Performance - Net sales for the fiscal year ended June 29, 2024, were 58,281.2 million, an increase of 1.8% from 57,254.7millioninthepreviousfiscalyear[206].−GrossprofitforthefiscalyearendedJune29,2024,was57,254.7 million in the previous fiscal year[206]. - Gross profit for the fiscal year ended June 29, 2024, was 6,577.1 million, up from 6,254.9million,reflectingagrossmarginincrease[206].−Operatingprofitincreasedto6,254.9 million, reflecting a gross margin increase[206]. - Operating profit increased to 826.4 million for the fiscal year ended June 29, 2024, compared to 765.8millionintheprioryear,indicatingagrowthof7.9765.8 million in the prior year, indicating a growth of 7.9%[206]. - Net income for the fiscal year ended June 29, 2024, was 435.9 million, representing a 9.7% increase from 397.2millioninthepreviousyear[207].−TotalassetsasofJune29,2024,were397.2 million in the previous year[207]. - Total assets as of June 29, 2024, were 13,392.9 million, up from 12,499.0millionasofJuly1,2023,showingagrowthof7.112,499.0 million as of July 1, 2023, showing a growth of 7.1%[205]. - Total liabilities increased to 9,266.0 million as of June 29, 2024, compared to 8,753.5millionintheprioryear,reflectingariseof5.98,753.5 million in the prior year, reflecting a rise of 5.9%[205]. - Retained earnings rose significantly to 1,302.9 million as of June 29, 2024, compared to 867.0millioninthepreviousyear,markinganincreaseof50.2867.0 million in the previous year, marking an increase of 50.2%[205]. - The company reported a diluted earnings per share of 2.79 for the fiscal year ended June 29, 2024, compared to 2.54inthepreviousyear,anincreaseof9.82.54 in the previous year, an increase of 9.8%[206]. - Cash increased to 20.0 million as of June 29, 2024, from 12.7millionasofJuly1,2023,indicatingagrowthof57.512.7 million as of July 1, 2023, indicating a growth of 57.5%[205]. - Cash provided by operating activities reached 1,163.0 million, significantly up from 832.1millionintheprioryear[212].SegmentPerformance−TheFoodservicesegmentoperates78distributioncentersandservesover175,000customerlocations,focusingonincreasingsalestoindependentcustomerswhotypicallygeneratehighergrossprofitpercase[12][13].−Vistar,anationaldistributor,servesover75,000customerlocationsfrom27distributioncenters,expandingitsreachtovariouschannelsincludinghospitalityvenuesandcollegebookstores[14][15].−TheConveniencesegmentservesapproximately50,000customerlocationsintheU.S.andCanada,operating39distributioncentersandofferingafullrangeofproductsincludingfood,beverages,andhealthandbeautycareproducts[16].−NetexternalsalesfortheFoodservicesegmentreached832.1 million in the prior year[212]. Segment Performance - The Foodservice segment operates 78 distribution centers and serves over 175,000 customer locations, focusing on increasing sales to independent customers who typically generate higher gross profit per case[12][13]. - Vistar, a national distributor, serves over 75,000 customer locations from 27 distribution centers, expanding its reach to various channels including hospitality venues and college bookstores[14][15]. - The Convenience segment serves approximately 50,000 customer locations in the U.S. and Canada, operating 39 distribution centers and offering a full range of products including food, beverages, and health and beauty care products[16]. - Net external sales for the Foodservice segment reached 29,002.4 million for the year ended June 29, 2024, an increase from 28,467.5millioninthepreviousyear[331].−FoodserviceAdjustedEBITDAforthefiscalyearendedJune29,2024,was28,467.5 million in the previous year[331]. - Foodservice Adjusted EBITDA for the fiscal year ended June 29, 2024, was 1,001.2 million, up from 943.6millioninthepreviousyear,representingagrowthof6.5943.6 million in the previous year, representing a growth of 6.5%[333]. - Vistar Adjusted EBITDA increased to 340.6 million for the fiscal year ended June 29, 2024, compared to 325.3millionintheprioryear,reflectingagrowthof4.3325.3 million in the prior year, reflecting a growth of 4.3%[333]. Regulatory and Compliance - The company’s operations are subject to various regulations, including those from the USDA and FDA, which impose standards for product quality and sanitation[30]. - The company is subject to various federal, state, and local laws, including those related to environmental, health, and safety requirements, which may incur material costs for compliance[34]. - The company’s customer relationships with U.S. federal and state governmental entities subject it to additional regulations applicable to government contractors[32]. Risk Management - The company manages economic risks primarily through the management of its debt funding and the use of derivative financial instruments[280]. - The entire change in the fair value of derivatives designated as cash flow hedges is recorded in other comprehensive income and reclassified into earnings when the hedged transaction occurs[281]. - As of June 29, 2024, Performance Food Group, Inc. had three interest rate swaps with a combined notional amount of 500.0 million[282]. - A hypothetical 100 bps increase in SOFR on variable-rate debt would lead to an increase of approximately 9.2millioninannualinterestexpense[190].−Thecompanyincurredinterestpaymentsof9.2 million in annual interest expense[190]. - The company incurred interest payments of 242.1 million during the fiscal year ended June 29, 2024, compared to 218.5millioninthepreviousyear[215].ShareholderEquityandStockCompensation−Thetotalshareholders′equityasofJuly1,2023,was218.5 million in the previous year[215]. Shareholder Equity and Stock Compensation - The total shareholders' equity as of July 1, 2023, was 3,745.5 million, reflecting growth from 3,299.5millionasofJuly2,2022[210].−Stock−basedcompensationexpensewas3,299.5 million as of July 2, 2022[210]. - Stock-based compensation expense was 37.4 million for the fiscal year ended June 29, 2024, slightly down from 39.2millionintheprioryear[212].−Theintrinsicvalueofexercisedoptionswas39.2 million in the prior year[212]. - The intrinsic value of exercised options was 4.3 million for fiscal 2024, compared to 3.6millionforfiscal2023,indicatinganincreaseofapproximately19.43.6 million for fiscal 2023, indicating an increase of approximately 19.4%[319]. - Total unrecognized compensation cost for all awards under the 2015 Incentive Plan is 45.0 million as of June 29, 2024, expected to be recognized over a weighted-average period of 1.7 years[323]. Legal and Contingencies - The Company is engaged in various legal proceedings, but management does not believe that the ultimate resolution will have a material adverse effect on its financial position[308]. - JUUL reached settlements in the multidistrict litigation, with the first settlement payment made on October 27, 2023, which may impact the Company’s future financial obligations[310]. Inventory and Assets - As of June 29, 2024, the Company's inventory balance was 3,314.7million,with3,314.7 million, with 2,164.4 million valued at FIFO and 1,150.3millionvaluedatLIFO[226].−TheCompany’sinventorieswereadjustedbyapproximately1,150.3 million valued at LIFO[226]. - The Company’s inventories were adjusted by approximately 16.5 million for slow-moving, excess, and obsolete inventories as of June 29, 2024[226]. - As of June 29, 2024, total intangible assets with definite lives amounted to 2,322.5million,withanetvalueof2,322.5 million, with a net value of 945.5 million after accumulated amortization[265]. - The investment in wholly owned subsidiary increased to 4,227.9millionasofJune29,2024,from4,227.9 million as of June 29, 2024, from 3,826.3 million as of July 1, 2023[336].