The Chefs' Warehouse(CHEF) - 2022 Q3 - Quarterly Report

Financial Performance - Net sales for the period ended September 23, 2022, reached $1,822,063, a significant increase from $1,187,506 for the same period in 2021, representing a growth of approximately 53.4%[13] - Gross profit for the same period was $431,305, compared to $264,796 in the prior year, indicating a gross profit margin improvement[13] - Operating income increased to $55,973 from a loss of $5,030 in the previous year, showcasing a turnaround in operational performance[13] - Net income for the period was $26,577, a substantial increase from a net loss of $13,367 in the prior year, reflecting improved profitability[13] - Total net sales for the thirteen weeks ended September 23, 2022, reached $661,856, a 36.7% increase from $484,321 in the same period last year[28] - Net income for the thirteen weeks ended September 23, 2022, was $26,577, compared to a loss of $13,367 for the same period in 2021[18] - Net income for the thirteen weeks ended September 23, 2022, was $8,277, compared to $3,456 for the same period in 2021, representing a 139% increase[32] - The diluted net income per share for the thirteen weeks ended September 23, 2022, was $0.21, compared to $0.09 in the prior year[30] Assets and Liabilities - Total current assets rose to $591,496 from $469,960, marking an increase of approximately 26%[11] - Total liabilities increased to $867,810 from $723,584, which is a rise of about 19.9%[11] - Cash and cash equivalents increased to $145,425 from $115,155, representing a growth of approximately 26.2%[11] - The company reported a total stockholders' equity of $384,949, up from $350,211, indicating a growth of about 9.9%[11] - Cash and cash equivalents at the end of the period were $145,425, an increase from $134,217 at the end of the previous year[18] - The company’s inventories totaled $9,616 as of September 23, 2022, compared to $8,312 as of December 24, 2021, reflecting an increase of 15.7%[43] Cash Flow - Total net cash provided by operating activities was $31,747, a significant improvement from a cash used of $26,330 in the prior year[18] - Net cash provided by operating activities was $31.7 million for the thirty-nine weeks ended September 23, 2022, compared to net cash used of $(13.4) million in the prior year[105] - Net cash used in investing activities totaled $93.7 million, driven by capital expenditures of $31.7 million and $62.0 million for acquisitions[106] Capital Expenditures and Investments - Capital expenditures for the period were $31,666, compared to $17,872 in the same period last year[18] - The company expects capital expenditures for fiscal 2022 to be approximately $36.0 million to $45.0 million[102] Acquisitions - The company completed three acquisitions during the thirty-nine weeks ended September 23, 2022, for a total purchase price of approximately $32,500, with additional contingent consideration of up to $2,000[39] - The total consideration for the acquisition of Capital Seaboard was approximately $31,036, which included $28,000 paid in cash at closing[38] - The company acquired CGC Holdings, Inc. for approximately $31.0 million, with additional acquisitions totaling $32.5 million during the thirty-nine weeks[77][78] Expenses - Selling, general and administrative expenses increased to $130.3 million, a 31.0% rise from $99.4 million in the prior year, with a ratio to net sales of 19.7%[83] - Selling, general and administrative expenses rose to $364.8 million in 2022, a 35.1% increase from $270.0 million in 2021, representing 20.0% of net sales[92] - Interest expense rose to $10.7 million, a 156.2% increase from $4.2 million in the prior year, primarily due to higher debt levels and transaction fees[87] - Interest expense grew to $19.6 million in 2022, a 46.4% increase from $13.4 million in 2021, primarily due to higher debt levels and transaction fees[94] - Other operating expenses increased to $10.5 million in 2022, compared to a net income of $(0.2) million in 2021, reflecting a significant change of 5,150%[93] Debt and Financing - Total debt obligations increased from $399.301 million as of December 24, 2021, to $499.215 million as of September 23, 2022, primarily due to new term loans[51] - The interest rate on the 2029 Term Loans was 7.9% as of September 23, 2022, with a principal amount of $300 million maturing on August 23, 2029[52] - The Company incurred a loss on debt extinguishment of $142 thousand related to the Eighth Amendment of its senior secured term loan[53] - As of September 23, 2022, the Company had $176.820 million available for borrowing under its asset-based loan facility[60] Shareholder Equity and Stock Compensation - The weighted average common shares outstanding for the diluted earnings per share calculation increased to 41,942,676 from 36,701,927[13] - The total unrecognized compensation cost for unvested RSAs was $21.353 million as of September 23, 2022, with a weighted-average remaining period of approximately 2.1 years[64] - The Company granted 517,766 RSAs at a weighted average grant date fair value of $31.41 during the thirty-nine weeks ended September 23, 2022[62] - The outstanding stock options as of September 23, 2022, were 112,232 shares with an exercise price of $20.23[66] Taxation - The effective tax rate for the thirteen weeks ended September 23, 2022, was 27.0%, down from 44.7% in the prior year[88] - Provision for income tax expense was $9.8 million in 2022, compared to a benefit of $(5.0) million in 2021, marking a change of 295.6%[95] Market Conditions - Estimated inflation was 15.5% in the specialty category and 11.6% in the center-of-the-plate category compared to the prior year[89] - A 100 basis point increase in market interest rates would decrease after-tax earnings by approximately $2.2 million per annum[116]