Performance Food Group Co

Previous wording

does not include non-cash stock-based employee compensation expense, changes in the LIFO reserve, and other non-cash charges; and

Current wording

does not include non-cash stock-based employee compensation expense, changes in the last in, first out ("LIFO") reserve, and other non-cash charges; and

Previous wording

Includes a decrease in the LIFO reserve of $1.1 million for Foodservice and an increase of $22.9 million for Convenience for the second quarter of fiscal 2024 compared to an increase of $2.0 million for Foodservice and an increase of $23.0 million for Convenience for the second quarter of fiscal 2023. The LIFO reserve increased $0.6 million for Foodservice and $40.4 million for Convenience for the first six months of fiscal 2024 compared to a decrease of $2.0 million for Foodservice and an increase of $53.8 million for Convenience for the first six months of fiscal 2023.

Current wording

Includes a decrease in the LIFO reserve of $1.2 million for Foodservice and an increase of $10.7 million for Convenience for the third quarter of fiscal 2024 compared to a decrease of $13.1 million for Foodservice and an increase of $29.6 million for Convenience for the third quarter of fiscal 2023. The LIFO reserve decreased $0.6 million for Foodservice and increased $51.1 million for Convenience for the first nine months of fiscal 2024 compared to a decrease of $15.1 million for Foodservice and an increase of $83.4 million for Convenience for the first nine months of fiscal 2023.

Previous wording

Includes $8.1 million gain on the sale of a Foodservice warehouse facility for the three and six months ended December 30, 2023, as well as asset impairments, insurance proceeds due to hurricane and other weather related events, amounts related to favorable and unfavorable leases, foreign currency transaction gains and losses, franchise tax expense, and other adjustments permitted by our ABL Facility.

Current wording

Includes $8.1 million gain on the sale of a Foodservice warehouse facility for the nine months ended March 30, 2024, $10.8 million gain on the sale of a Vistar warehouse facility for the three and nine months ended April 1, 2023, as well as asset impairments, insurance proceeds due to hurricane and other weather related events, amounts related to favorable and unfavorable leases, foreign currency transaction gains and losses, franchise tax expense, and other adjustments permitted by our ABL Facility.

Previous wording

Three and six months ended December 30, 2023 compared to the three and six months ended December 31, 2022

Current wording

Three and nine months ended March 30, 2024 compared to the three and nine months ended April 1, 2023

Previous wording

Net sales increased $396.8 million, or 2.9%, from the second quarter of fiscal 2023 to the second quarter of fiscal 2024 due to an increase in cases sold. Net sales increased $616.1 million, or 2.2%, for the first six months of fiscal 2024 compared to the first six months of fiscal 2023. The increase in net sales was primarily attributable to an increase in cases sold, partially offset by a decrease in selling price per case as a result of 1.4% year-to-date deflation in our Foodservice segment as compared to the same prior fiscal year period. Total organic case volume increased 2.1% and 2.4%, in the second quarter and first six months of fiscal 2024, respectively, compared to the same periods of fiscal 2023. Total organic case volume benefited from an increase of 8.7% and 8.1% in organic independent cases sold during the second quarter and first six months of fiscal 2024, respectively, growth in Performance Brands cases, growth in cases sold to Foodservice's Chain business, and broad-based growth across Vistar's channels.

Current wording

Net sales increased $86.4 million, or 0.6%, from the third quarter of fiscal 2023 to the third quarter of fiscal 2024 due to case volume growth in our independent Foodservice business, as well as recent acquisitions, partially offset by case declines in our Convenience business. Total case volume growth was impacted by bad weather during the third quarter of fiscal 2024. Net sales increased $702.5 million, or 1.7%, for the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023, primarily attributable to growth in cases sold. Total case volume decreased 0.2% and increased 1.7% during the third quarter and first nine months of fiscal 2024, respectively. Total organic case volume decreased 0.6% in the third quarter of fiscal 2024 and increased 1.4%, in the first nine months of fiscal 2024, compared to the same periods of fiscal 2023. Total organic case volume benefited from an increase of 4.3% and 6.9% in organic independent cases sold during the third quarter and first nine months of fiscal 2024, respectively, as well as growth in Performance Brands and case growth in vending and value store channels in Vistar.

Previous wording

Gross profit increased $98.5 million, or 6.6%, for the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023. The increase in gross profit for the second quarter of fiscal 2024 was primarily driven by growth in cases sold and a favorable shift in the mix of cases sold, including growth in the independent channel and Performance Brands. Gross profit increased $186.3 million, or 6.1%, for the first six months of fiscal 2024 compared to the first six months of fiscal 2023. The increase in gross profit for the first six months of fiscal 2024 was primarily driven by cost of goods sold optimization through procurement efficiencies, as well as growth in cases sold, including growth in the independent channel. Independent customers typically receive more services from us, cost more to serve, and pay a higher gross profit per case than other customers.

Current wording

Gross profit increased $57.0 million, or 3.8%, for the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023. The increase in gross profit for the third quarter of fiscal 2024 was primarily driven by a favorable shift in the mix of cases sold, including growth in the independent channel and Performance Brands, as well as cost of goods sold optimization through procurement efficiencies, and recent acquisitions. Gross profit increased $243.3 million, or 5.3%, for the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023. The increase in gross profit for the first nine months of fiscal 2024 was primarily driven by cost of goods sold optimization through procurement efficiencies, as well as growth in cases sold, including growth in the independent channel, and recent acquisitions. Independent customers typically receive more services from us, cost more to serve, and pay a higher gross profit per case than other customers.

Previous wording

Operating expenses increased $68.6 million, or 5.1%, for the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023. The increase in operating expenses was primarily driven by a $42.6 million increase in personnel expense primarily related to wages, commissions, and benefits, a $23.4 million increase in insurance expense primarily related to vehicle liability and workers’ compensation, and a $11.4 million increase in repairs and maintenance expense primarily related to transportation equipment, partially offset by a $11.0 million decrease in fuel expense primarily due to lower fuel prices in the second quarter of fiscal 2024 as compared to the prior year period.

Current wording

Operating expenses increased $70.9 million, or 5.3%, for the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023. The increase in operating expenses was primarily driven by a $31.3 million increase in personnel expense primarily related to wages, commissions, and benefits, a $12.3 million increase in insurance expense primarily related to vehicle liability and workers’ compensation, and a $9.2 million increase in repairs and maintenance expense primarily related to transportation equipment, partially offset by a $7.0 million decrease in fuel expense primarily due to lower fuel prices in the third quarter of fiscal 2024 as compared to the prior year period.

Previous wording

Operating expenses increased $131.4 million, or 4.8%, for the first six months of fiscal 2024 compared to the first six months of fiscal 2023. The increase in operating expenses for the first six months of fiscal 2024 was primarily driven by a $74.9 million increase in personnel expenses primarily related to wages, commissions, and benefits, a $31.4 million increase in insurance expense primarily related to vehicle liability and workers’ compensation, and a $26.3 million increase in repairs and maintenance expense primarily related to transportation equipment for the first six months of fiscal 2024 compared to the prior year period. These increases were partially offset by a $28.0 million decrease in fuel expense primarily due to lower fuel prices for the first six months of fiscal 2024 compared to the prior year period.

Current wording

Operating expenses increased $202.3 million, or 5.0%, for the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023. The increase in operating expenses for the first nine months of fiscal 2024 was primarily driven by a $106.2 million increase in personnel expenses primarily related to wages, commissions, and benefits, a $43.7 million increase in insurance expense primarily related to vehicle liability and workers’ compensation, and a $35.5 million increase in repairs and maintenance expense primarily related to transportation equipment for the first nine months of fiscal 2024 compared to the prior year period. These increases were partially offset by a $35.1 million decrease in fuel expense primarily due to lower fuel prices for the first nine months of fiscal 2024 compared to the prior year period.

Previous wording

Depreciation and amortization of intangible assets increased from $125.2 million in the second quarter of fiscal 2023 to $143.3 million in the second quarter of fiscal 2024. Depreciation and amortization of intangible assets increased from $244.4 million in the first six months of fiscal 2023 to $272.6 million in the first six months of fiscal 2024. Depreciation and amortization of intangible assets increased as a result of recent acquisitions, accelerated amortization of certain customer relationships and trade names, and an increase in transportation equipment under finance leases.

Current wording

Depreciation and amortization of intangible assets increased from $124.8 million in the third quarter of fiscal 2023 to $139.3 million in the third quarter of fiscal 2024. Depreciation and amortization of intangible assets increased from $369.2 million in the first nine months of fiscal 2023 to $411.9 million in the first nine months of fiscal 2024. Depreciation and amortization of intangible assets increased as a result of recent acquisitions, accelerated amortization of certain customer relationships and trade names, and an increase in transportation equipment under finance leases.

Previous wording

Net income increased $7.2 million, or 10.1%, for the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023 driven by the increase in operating profit, partially offset by increases in income tax expense, other expense, and interest expense. Net income increased $32.2 million, or 19.3%, for the first six months of fiscal 2024 compared to the first six months of fiscal 2023 due to the increase in operating profit and an increase in other income, partially offset by increases in income tax expense and interest expense. The increase in other income for the first six months of fiscal 2024 primarily relates to realized and unrealized gains for fuel hedging instruments. The increases in interest expense were primarily the result of an increase in the average interest rate during the second quarter and first six months of fiscal 2024 compared to the prior year periods.

Current wording

Net income decreased $9.9 million, or 12.3%, for the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023 driven by the decrease in operating profit, partially offset by a decrease in income tax expense. Net income increased $22.3 million, or 9.0%, for the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023 due to the increase in operating profit and an increase in other income, partially offset by increases in interest expense and income tax expense. The increase in other income for the first nine months of fiscal 2024 primarily relates to realized and unrealized gains for fuel hedging instruments. The increase in interest expense was primarily the result of an increase in the average interest rate during the first nine months of fiscal 2024 compared to the prior year period.

Previous wording

The Company reported income tax expense of $33.4 million and $76.0 million for the second quarter and first six months of fiscal 2024, respectively, compared to income tax expense of $25.1 million and $59.3 million for the second quarter and first six months of fiscal 2023, respectively. Our effective tax rates for the second quarter and first six months of fiscal 2024 were 29.9% and 27.6%, respectively, compared to 26.1% and 26.2%, for the second quarter and first six months of fiscal 2023, respectively. The effective tax rate for the periods ended December 30, 2023 differed from the prior year periods primarily due to an increase in non-deductible expenses and state and foreign taxes as a percentage of income, partially offset by an increase in deductible discrete items related to stock-based compensation.

Current wording

The Company reported income tax expense of $26.4 million and $102.4 million for the third quarter and first nine months of fiscal 2024, respectively, compared to income tax expense of $31.5 million and $90.8 million for the third quarter and first nine months of fiscal 2023, respectively. Our effective tax rate for the third quarter of fiscal 2024 was 27.3%, compared to 28.1% for the third quarter of fiscal 2023. The effective tax rate for the three months ended March 30, 2024 differed from the prior year period primarily due to a decrease in foreign taxes as a percentage of income, partially offset by an increase in non-deductible expenses and state taxes as a percentage of income. Our effective tax rate for the first nine months of fiscal 2024 was 27.5%, compared to 26.9% for the first nine months of fiscal 2023. The effective tax rate for the nine months ended March 30, 2024 differed from the prior year period primarily due to an increase in non-deductible expenses and state and foreign taxes as a percentage of income, partially offset by an increase in deductible discrete items related to stock-based compensation.

Previous wording

Net sales for Foodservice increased $182.7 million, or 2.6%, from the second quarter of fiscal 2023 to the second quarter of fiscal 2024 and increased $129.7 million, or 0.9%, from the first six months of fiscal 2023 to the first six months of fiscal 2024. These increases in net sales were driven by case volume growth in our independent and Chain business, partially offset by a decrease in selling price per case. Securing new and expanding business with independent customers resulted in organic independent case growth of approximately 8.7% in the second quarter of fiscal 2024 and approximately 8.1% in the first six months of fiscal 2024, compared to the prior year periods. For the quarter, independent sales as a percentage of total Foodservice sales were 39.1%. Overall product cost deflation was 0.4% for the second quarter of fiscal 2024 and 1.4% for the first six months of fiscal 2024.

Current wording

Net sales for Foodservice increased $69.3 million, or 1.0%, from the third quarter of fiscal 2023 to the third quarter of fiscal 2024 and increased $199.0 million, or 0.9%, from the first nine months of fiscal 2023 to the first nine months of fiscal 2024. These increases in net sales were driven by case volume growth in our independent business. Chain and other Foodservice business case volume was flat for the third quarter of fiscal 2024 compared to the prior year period. Total Foodservice case volume growth was impacted by bad weather in January. Securing new and expanding business with independent customers resulted in organic independent case growth of 4.3% in the third quarter of fiscal 2024 and approximately 6.9% in the first nine months of fiscal 2024, compared to the prior year periods. For the quarter, independent sales as a percentage of total Foodservice sales were 38.8%. Overall product cost inflation was 0.6% for the third quarter of fiscal 2024 and product cost deflation was 0.8% for the first nine months of fiscal 2024.

Previous wording

Adjusted EBITDA for Foodservice increased $9.9 million, or 4.6%, from the second quarter of fiscal 2023 to the second quarter of fiscal 2024 and increased $19.8 million, or 4.4%, from the first six months of fiscal 2023 to the first six months of fiscal 2024. These increases were the result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Foodservice's Adjusted EBITDA increased $48.0 million, or 5.2%, in the second quarter of fiscal 2024 and increased $106.2 million, or 5.6% in the first six months of fiscal 2024, compared to the prior year periods. The increase in gross profit was driven by growth in cases sold and a favorable shift in the mix of cases sold, including more Performance Brands products sold to our independent customers.

Current wording

This increase was the result of an increase in gross profit, offset by an increase in operating expenses. Gross profit contributing to Foodservice's Adjusted EBITDA increased $28.0 million, or 3.0%, in the third quarter of fiscal 2024 and increased $134.2 million, or 4.7% in the first nine months of fiscal 2024, compared to the prior year periods. The increase in gross profit was driven by a favorable shift in the mix of cases sold and growth in cases sold, including more Performance Brands products sold to our independent customers.

Previous wording

Operating expenses impacting Foodservice's Adjusted EBITDA increased $38.2 million, or 5.3%, from the second quarter of fiscal 2023 to the second quarter of fiscal 2024. Operating expenses increased primarily as a result of a $23.2 million increase in personnel expenses primarily related to wages, commissions, and benefits due to an increase in full-time employees, a $12.9 million increase in insurance expense primarily related to vehicle liability and workers' compensation, and a $2.9 million increase in building rent expense primarily the result of incremental short term duplicative lease expenses associated with expansion projects, compared to the prior year period.

Current wording

Operating expenses impacting Foodservice's Adjusted EBITDA increased $28.9 million, or 4.0%, from the third quarter of fiscal 2023 to the third quarter of fiscal 2024. Operating expenses increased primarily as a result of a $26.0 million increase in personnel expenses primarily related to wages, commissions, and benefits due primarily to an increase in full-time employees, and a $5.0 million increase in insurance expense primarily related to vehicle liability and workers' compensation, partially offset by a $3.8 million decrease in fuel expense primarily due to lower fuel prices, compared to the prior year period.

Previous wording

Operating expenses impacting Foodservice's Adjusted EBITDA increased $86.6 million, or 6.0%, from the first six months of fiscal 2023 to the first six months of fiscal 2024. Operating expenses increased primarily as a result of a $57.1 million increase in personnel expenses primarily related to wages, commissions, and benefits due to an increase in full-time employees, a $15.7 million increase in insurance expense primarily related to vehicle liability and workers' compensation, and an increase of $7.1 million of repairs and maintenance expense primarily related to transportation equipment as the Company is waiting on replacement fleet, compared to the prior year period.

Current wording

Operating expenses impacting Foodservice's Adjusted EBITDA increased $115.5 million, or 5.3%, from the first nine months of fiscal 2023 to the first nine months of fiscal 2024. Operating expenses increased primarily as a result of a $83.1 million increase in personnel expenses primarily related to wages, commissions, and benefits due primarily to an increase in full-time employees, a $20.7 million increase in insurance expense primarily related to vehicle liability and workers' compensation, and an increase of $8.3 million of repairs and maintenance expense primarily related to transportation equipment, compared to the prior year period.

Previous wording

Depreciation and amortization of intangible assets recorded in this segment increased from $71.8 million in the second quarter of fiscal 2023 to $72.7 million in the second quarter of fiscal 2024 and increased from $137.8 million in the first six months of fiscal 2023 to $143.3 million in the first six months of fiscal 2024 as a result of an increase in transportation equipment under finance leases.

Current wording

Depreciation and amortization of intangible assets recorded in this segment increased from $70.9 million in the third quarter of fiscal 2023 to $74.7 million in the third quarter of fiscal 2024 and increased from $208.7 million in the first nine months of fiscal 2023 to $218.0 million in the first nine months of fiscal 2024 as a result of an increase in transportation equipment under finance leases, partially offset by amortization of certain customer relationships in the prior year.

Previous wording

Net sales for Vistar increased $83.0 million, or 7.4%, from the second quarter of fiscal 2023 to the second quarter of fiscal 2024 and increased $243.3 million, or 11.0%, from the first six months of fiscal 2023 to the first six months of fiscal 2024. These increases in net sales were driven primarily by an increase in selling price per case as a result of inflation, a recent acquisition, and case volume growth in the vending, office supply, office coffee service, and travel channels in the second quarter and first six months of fiscal 2024 compared to the prior year periods.

Current wording

Net sales for Vistar increased $19.0 million, or 1.7%, from the third quarter of fiscal 2023 to the third quarter of fiscal 2024. This increase in net sales was driven primarily by a recent acquisition. Net sales for Vistar increased $262.3 million, or 7.9%, from the first nine months of fiscal 2023 to the first nine months of fiscal 2024. This increase in net sales was driven primarily by a recent acquisition, an increase in selling price per case as a result of inflation, and case volume growth in the vending and value store channels in the first nine months of fiscal 2024 compared to the prior year period.

Previous wording

Adjusted EBITDA for Vistar increased $1.4 million, or 1.5%, from the second quarter of fiscal 2023 to the second quarter of fiscal 2024 and increased $15.6 million, or 9.4%, from the first six months of fiscal 2023 to the first six months of fiscal 2024. These increases were the result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Vistar's Adjusted EBITDA increased $18.5 million, or 9.0%, for the second quarter of fiscal 2024 and increased $38.5 million, or 9.7%, for the first six months of fiscal 2024 compared to the prior year periods driven by a recent acquisition, pricing improvement from procurement efficiencies, and growth in cases sold, partially offset by expected decreases in inventory holding gains.

Current wording

Adjusted EBITDA for Vistar decreased $0.2 million, or 0.3%, from the third quarter of fiscal 2023 to the third quarter of fiscal 2024. This decrease was a result of an increase in operating expenses, partially offset by an increase in gross profit. Adjusted EBITDA for Vistar increased $15.4 million, or 6.4%, from the first nine months of fiscal 2023 to the first nine months of fiscal 2024. This increase was the result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Vistar's Adjusted EBITDA increased $10.2 million, or 5.4%, for the third quarter of fiscal 2024 and increased $48.7 million, or 8.3%, for the first nine months of fiscal 2024 compared to the prior year periods driven by a recent acquisition and pricing improvement from procurement efficiencies, partially offset by expected decreases in inventory holding gains.

Previous wording

Operating expenses impacting Vistar's Adjusted EBITDA increased $16.9 million, or 14.7%, from the second quarter of fiscal 2023 to the second quarter of fiscal 2024 and increased $22.7 million, or 9.9%, from the first six months of fiscal 2023 to the first six months of fiscal 2024. Operating expenses increased primarily as a result of a recent acquisition and increases of $2.0 million and $3.4 million in building rent expense as a result of lease renewals and expansion, for the second quarter and first six months of fiscal 2024, respectively, compared to the prior year periods.

Current wording

Operating expenses impacting Vistar's Adjusted EBITDA increased $9.8 million, or 8.5%, from the third quarter of fiscal 2023 to the third quarter of fiscal 2024 and increased $32.5 million, or 9.4%, from the first nine months of fiscal 2023 to the first nine months of fiscal 2024. Operating expenses increased primarily as a result of a recent acquisition and increases of $1.3 million and $4.7 million in building rent expense as a result of lease renewals and expansion, for the third quarter and first nine months of fiscal 2024, respectively, compared to the prior year periods.

Previous wording

Depreciation and amortization of intangible assets recorded in this segment increased from $10.6 million in the second quarter of fiscal 2023 to $12.8 million in the second quarter of fiscal 2024 and increased from $21.3 million in the first six months of fiscal 2023 to $23.2 million in the first six months of fiscal 2024 due to a recent acquisition.

Current wording

Depreciation and amortization of intangible assets recorded in this segment increased from $10.4 million in the third quarter of fiscal 2023 to $12.8 million in the third quarter of fiscal 2024 and increased from $31.7 million in the first nine months of fiscal 2023 to $36.0 million in the first nine months of fiscal 2024 due primarily to a recent acquisition.

Previous wording

Net sales for Convenience increased $77.3 million, or 1.3%, from the second quarter of fiscal 2023 to the second quarter of fiscal 2024 and increased $127.4 million, or 1.0%, from the first six months of fiscal 2023 to the first six months of fiscal 2024. The increase in net sales for the second quarter and first six months of fiscal 2024 for Convenience was driven primarily by an increase in selling price per case as a result of cigarette manufacturers’ price increases and continued inflation for food and foodservice related products, partially offset by a decline in cigarette carton sales and food and foodservice related cases sold.

Current wording

Net sales for Convenience decreased $41.2 million, or 0.7%, from the third quarter of fiscal 2023 to the third quarter of fiscal 2024. This decrease in net sales for the third quarter of fiscal 2024 was driven primarily by a decrease in cigarette carton sales and food and foodservice related cases sold, partially offset by an increase in selling price per case as a result of cigarette manufacturers’ price increases and continued inflation for food and foodservice related products. Net sales for Convenience increased $86.2 million, or 0.5%, from the first nine months of fiscal 2023 to the first nine months of fiscal 2024. This increase in net sales for the first nine months of fiscal 2024 was driven primarily by an increase in selling price per case as a result of cigarette manufacturers’ price increases and continued inflation for food and foodservice related products, partially offset by a decline in cigarette carton sales and food and foodservice related cases sold.

Previous wording

Adjusted EBITDA for Convenience increased $14.2 million, or 20.5%, from the second quarter of fiscal 2023 to the second quarter of fiscal 2024. This increase was a result of an increase in gross profit and a decrease in operating expenses. Gross profit contributing to Convenience's Adjusted EBITDA increased $8.2 million, or 2.2%, for the second quarter of fiscal 2024 compared to the prior year period driven by pricing improvement from procurement efficiencies. Operating expenses impacting Convenience's Adjusted EBITDA decreased $5.9 million, or 1.9%, from the second quarter of fiscal 2023 to the second quarter of fiscal 2024. Operating expenses decreased primarily as a result of an $8.3 million decrease in personnel expenses from reduced contract labor and overtime, partially offset by a $4.4 million increase in insurance expenses primarily related to workers compensation and vehicle liability compared to the prior year period.

Current wording

Adjusted EBITDA for Convenience decreased $2.3 million, or 3.1%, from the third quarter of fiscal 2023 to the third quarter of fiscal 2024. This decrease was a result of a decrease in gross profit, partially offset by a decrease in operating expenses. Gross profit contributing to Convenience's Adjusted EBITDA decreased $8.0 million, or 2.1%, for the third quarter of fiscal 2024 compared to the prior year period driven by expected decreases in inventory holding gains, partially offset by pricing improvement from procurement efficiencies. Operating expenses impacting Convenience's Adjusted EBITDA decreased $7.6 million, or 2.4%, from the third quarter of fiscal 2023 to the third quarter of fiscal 2024. Operating expenses decreased primarily as a result of a $5.3 million decrease in lease expense and a $2.4 million decrease in personnel expenses from reduced contract labor and overtime, compared to the prior year period.

Previous wording

Adjusted EBITDA for Convenience increased $3.3 million, or 1.9%, from the first six months of fiscal 2023 to the first six months of fiscal 2024. This increase was a result of a decrease in operating expenses, partially offset by a decrease in gross profit. Gross profit contributing to Convenience's Adjusted EBITDA decreased $14.2 million, or 1.8%, for the first six months of fiscal 2024 compared to the prior year period primarily due to expected decreases in inventory holding gains, partially offset by pricing improvement from procurement efficiencies. Operating expenses impacting Convenience's Adjusted EBITDA decreased $17.5 million, or 2.8%, from the first six months of fiscal 2023 to the first six months of fiscal 2024. Operating expenses decreased primarily as a result of a $15.0 million decrease in personnel expenses from reduced contract labor and overtime for the first six months of fiscal 2024 as compared to the prior year period.

Current wording

Adjusted EBITDA for Convenience increased $1.0 million, or 0.4%, from the first nine months of fiscal 2023 to the first nine months of fiscal 2024. This increase was a result of a decrease in operating expenses, partially offset by a decrease in gross profit. Gross profit contributing to Convenience's Adjusted EBITDA decreased $22.2 million, or 1.9%, for the first nine months of fiscal 2024 compared to the prior year period primarily due to expected decreases in inventory holding gains, partially offset by pricing improvement from procurement efficiencies. Operating expenses impacting Convenience's Adjusted EBITDA decreased $25.3 million, or 2.7%, from the first nine months of fiscal 2023 to the first nine months of fiscal 2024. Operating expenses decreased primarily as a result of a $17.4 million decrease in personnel expenses from reduced contract labor and overtime, an $11.1 million decrease in lease expense, and a $10.7 million decrease in fuel expense, partially offset by an increase of a $12.8 million of repairs and maintenance expense primarily related to transportation equipment for the first nine months of fiscal 2024 as compared to the prior year period.

Previous wording

Net sales for Corporate & All Other increased $73.7 million from the second quarter of fiscal 2023 to the second quarter of fiscal 2024 and increased $161.8 million from the first six months of fiscal 2023 to the first six months of fiscal 2024. These increases were primarily attributable to recent acquisitions within a non-reportable segment and an increase in services provided to our other segments.

Current wording

Net sales for Corporate & All Other increased $47.5 million from the third quarter of fiscal 2023 to the third quarter of fiscal 2024 and increased $209.3 million from the first nine months of fiscal 2023 to the first nine months of fiscal 2024. These increases were primarily attributable to recent acquisitions within a non-reportable segment and an increase in services provided to our other segments.

Previous wording

Adjusted EBITDA for Corporate & All Other was a negative $55.8 million for the second quarter of fiscal 2024 compared to a negative $66.9 million for the second quarter of fiscal 2023 and was a negative $101.3 million for the first six months of fiscal 2024 compared to a negative $128.3 million for the first six months of fiscal 2023. Corporate & All Other’s Adjusted EBITDA benefited in the second quarter and first six months of fiscal 2024 from $11.1 million and $21.6 million in Adjusted EBITDA, respectively, from the operations of acquisitions made in the second quarter of fiscal 2023 and in the first quarter of fiscal 2024.

Current wording

Adjusted EBITDA for Corporate & All Other was a negative $42.4 million for the third quarter of fiscal 2024 compared to a negative $51.6 million for the third quarter of fiscal 2023 and was a negative $143.7 million for the first nine months of fiscal 2024 compared to a negative $179.9 million for the first nine months of fiscal 2023. Corporate & All Other’s Adjusted EBITDA benefited in the third quarter and first nine months of fiscal 2024 from an increase of $7.3 million and $28.9 million in Adjusted EBITDA, respectively, from the operations of acquisitions made in the second quarter of fiscal 2023 and in the first quarter of fiscal 2024.

Previous wording

Depreciation and amortization of intangible assets recorded in this segment increased from $6.3 million in the second quarter of fiscal 2023 to $20.6 million in the second quarter of fiscal 2024 and increased from $12.0 million for the first six months of fiscal 2023 to $31.2 million for the first six months of fiscal 2024 due to recent acquisitions and accelerated amortization of certain customer relationships and trade names.

Current wording

Depreciation and amortization of intangible assets recorded in this segment increased from $6.8 million in the third quarter of fiscal 2023 to $13.1 million in the third quarter of fiscal 2024 and increased from $18.8 million for the first nine months of fiscal 2023 to $44.3 million for the first nine months of fiscal 2024 due to recent acquisitions and amortization of certain customer relationships and trade names.

Previous wording

We have historically financed our operations and growth primarily with cash flows from operations, borrowings under our credit facility, operating and finance leases, and normal trade credit terms. We have typically funded our acquisitions with additional borrowings under our credit facility or other debt instruments. Our working capital and borrowing levels are subject to seasonal fluctuations, typically with the lowest borrowing levels in the third and fourth fiscal quarters and the highest borrowing levels occurring in the first and second fiscal quarters. We borrow under our credit facility or pay it down regularly based on our cash flows from operating and investing activities. Our practice is to minimize interest expense while maintaining reasonable liquidity.

Current wording

We have historically financed our operations and growth primarily with cash flows from operations, borrowings under our credit facility, operating and finance leases, and normal trade credit terms. We have typically funded our acquisitions with additional borrowings under our credit facility or other debt instruments. Our working capital and borrowing levels are subject to seasonal fluctuations, typically with the lowest borrowing levels in the third and fourth fiscal quarters and the highest borrowing levels occurring in the first and second fiscal quarters. We borrow under our ABL Facility or pay it down regularly based on our cash flows from operating and investing activities. Our practice is to minimize interest expense while maintaining reasonable liquidity.

Previous wording

As market conditions warrant, we may from time to time seek to repurchase our securities or loans in privately negotiated or open market transactions, by tender offer or otherwise. Any such repurchases may be funded by incurring new debt, including additional borrowings under our credit facility. In addition, depending on conditions in the credit and capital markets and other factors, we will, from time to time, consider other financing transactions, the proceeds of which could be used to refinance our indebtedness, make investments or acquisitions or for other purposes. Any new debt may be secured debt.

Current wording

As market conditions warrant, we may from time to time seek to repurchase our securities or loans in privately negotiated or open market transactions, by tender offer or otherwise. Any such repurchases may be funded by incurring new debt, including additional borrowings under our ABL Facility. In addition, depending on conditions in the credit and capital markets and other factors, we will, from time to time, consider other financing transactions, the proceeds of which could be used to refinance our indebtedness, make investments or acquisitions or for other purposes. Any new debt may be secured debt.

Previous wording

We are exposed to interest rate risk related to changes in interest rates for borrowings under our ABL Facility. To add stability to interest expense and manage our exposure to interest rate movements, we enter into interest rate swap agreements. These swaps are designated as cash flow hedges and involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments. As of December 30, 2023, $350.0 million of the outstanding ABL Facility balance is currently hedged under interest rate swaps which results in 80% of our total debt outstanding, including finance lease obligations, being fixed-rate debt.

Current wording

We are exposed to interest rate risk related to changes in interest rates for borrowings under our ABL Facility. To add stability to interest expense and manage our exposure to interest rate movements, we enter into interest rate swap agreements. These swaps are designated as cash flow hedges and involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments. As of March 30, 2024, $350.0 million of the outstanding ABL Facility balance is currently hedged under interest rate swaps which results in 86% of our total debt outstanding, including finance lease obligations, being fixed-rate debt.

Previous wording

On November 16, 2022, the Board of Directors authorized a new share repurchase program for up to $300 million of the Company’s outstanding common stock. This authorization replaced the previously authorized $250 million share repurchase program. The new share repurchase program has an expiration date of November 16, 2026 and may be amended, suspended, or discontinued at any time at the Company’s discretion, subject to compliance with applicable laws. Repurchases under this program depend upon marketplace conditions and other factors, including compliance with the covenants in the agreements governing our existing indebtedness. During the six months ended December 30, 2023, the Company repurchased 1.3 million shares of the Company's common stock for a total of $78.1 million. As of December 30, 2023, $210.6 million remained available for share repurchases.

Current wording

On November 16, 2022, the Board of Directors authorized a new share repurchase program for up to $300 million of the Company’s outstanding common stock. This authorization replaced the previously authorized $250 million share repurchase program. The new share repurchase program has an expiration date of November 16, 2026 and may be amended, suspended, or discontinued at any time at the Company’s discretion, subject to compliance with applicable laws. Repurchases under this program depend upon marketplace conditions and other factors, including compliance with the covenants in the agreements governing our existing indebtedness. The Company did not repurchase any shares of common stock during the three months ended March 30, 2024. During the nine months ended March 30, 2024, the Company repurchased 1.3 million shares of the Company's common stock for a total of $78.1 million. As of March 30, 2024, $210.6 million remained available for share repurchases.

Previous wording

Our contractual cash requirements over the next 12 months and beyond relate to our long-term debt and associated interest payments, operating and finance leases, and purchase obligations. For information regarding the Company’s expected cash requirements related to long-term debt and operating and finance leases, see Note 6. Debt and Note 7. Leases, respectively, of the consolidated financial statements in this Form 10-Q. As of December 30, 2023, the Company had total purchase obligations of $320.4 million, which includes agreements for purchases related to capital projects and services in the normal course of business, for which all significant terms have been confirmed, as well as a minimum amount due for various Company meetings and conferences. Purchase obligations also include amounts committed to various capital projects in process or scheduled to be completed in the coming fiscal years. As of December 30, 2023, the Company had commitments of $228.8 million for capital projects related to warehouse expansion and improvements and warehouse equipment. The Company anticipates using cash flows from operations or borrowings under the ABL Facility to fulfill these commitments. Amounts due under these agreements were not included in the Company’s consolidated balance sheet as of December 30, 2023.

Current wording

Our contractual cash requirements over the next 12 months and beyond relate to our long-term debt and associated interest payments, operating and finance leases, and purchase obligations. For information regarding the Company’s expected cash requirements related to long-term debt and operating and finance leases, see Note 6. Debt and Note 7. Leases, respectively, of the consolidated financial statements in this Form 10-Q. As of March 30, 2024, the Company had total purchase obligations of $318.2 million, which includes agreements for purchases related to capital projects and services in the normal course of business, for which all significant terms have been confirmed, as well as a minimum amount due for various Company meetings and conferences. Purchase obligations also include amounts committed to various capital projects in process or scheduled to be completed in the coming fiscal years. As of March 30, 2024, the Company had commitments of $231.3 million for capital projects related to warehouse expansion and improvements and warehouse equipment. The Company anticipates using cash flows from operations or borrowings under the ABL Facility to fulfill these commitments. Amounts due under these agreements were not included in the Company’s consolidated balance sheet as of March 30, 2024.

Previous wording

As of December 30, 2023, our cash balance totaled $23.9 million, including restricted cash of $7.5 million, as compared to a cash balance totaling $20.0 million, including restricted cash of $7.3 million, as of July 1, 2023.

Current wording

As of March 30, 2024, our cash balance totaled $24.1 million, including restricted cash of $7.6 million, as compared to a cash balance totaling $20.0 million, including restricted cash of $7.3 million, as of July 1, 2023.

Previous wording

During the first six months of fiscal 2024 and fiscal 2023, our operating activities provided cash flow of $554.0 million and $424.5 million, respectively. The increase in cash flow provided by operating activities in the first six months of fiscal 2024 compared to the first six months of fiscal 2023 was largely driven by improvements in working capital and higher operating income.

Current wording

During the first nine months of fiscal 2024 and fiscal 2023, our operating activities provided cash flow of $956.7 million and $657.2 million, respectively. The increase in cash flow provided by operating activities in the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023 was largely driven by improvements in working capital and higher operating income.

Previous wording

Cash used in investing activities totaled $436.4 million in the first six months of fiscal 2024 compared to $160.3 million in the first six months of fiscal 2023. These investments consisted of cash paid for acquisitions of $308.1 million in the first six months of fiscal 2024 compared to $65.8 million in the first six months of fiscal 2023, along with capital purchases of property, plant, and equipment of $147.1 million and $98.1 million for the first six months of fiscal 2024 and the first six months of fiscal 2023, respectively. For the first six months of fiscal 2024, purchases of property, plant, and equipment primarily consisted of outlays for warehouse improvements and expansion, warehouse equipment, transportation equipment, and information technology. The following table presents the capital purchases of property, plant, and equipment by segment.

Current wording

Cash used in investing activities totaled $533.0 million in the first nine months of fiscal 2024 compared to $219.5 million in the first nine months of fiscal 2023. These investments consisted of cash paid for acquisitions of $307.9 million in the first nine months of fiscal 2024 compared to $63.9 million in the first nine months of fiscal 2023, along with capital purchases of property, plant, and equipment of $244.4 million and $177.2 million for the first nine months of fiscal 2024 and the first nine months of fiscal 2023, respectively. For the first nine months of fiscal 2024, purchases of property, plant, and equipment primarily consisted of outlays for warehouse improvements and expansion, warehouse equipment, transportation equipment, and information technology. The following table presents the capital purchases of property, plant, and equipment by segment.

Previous wording

During the first six months of fiscal 2024, our financing activities used cash flow of $113.7 million, which consisted primarily of $78.1 million in payments to repurchase common stock and payments under finance lease obligations.

Current wording

During the first nine months of fiscal 2024, our financing activities used cash flow of $419.6 million, which consisted primarily of $249.1 million in net payments under our ABL Facility, $87.8 million in payments under finance lease obligations, and $78.1 million in repurchases of common stock.

Previous wording

During the first six months of fiscal 2023, our financing activities used cash flow of $269.6 million, which consisted primarily of $232.1 million in net payments under our ABL Facility.

Current wording

During the first nine months of fiscal 2023, our financing activities used cash flow of $441.0 million, which consisted primarily of $380.6 million in net payments under our ABL Facility.

Previous wording

Performance Food Group, Inc. is the lead borrower under the ABL Facility, which is jointly and severally guaranteed by, and secured by the majority of the assets of, PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). Availability for loans and letters of credit under the ABL Facility is governed by a borrowing base, determined by the application of specified advance rates against eligible assets, including trade accounts receivable, inventory, owned real properties, and owned transportation equipment. The borrowing base is reduced quarterly by a cumulative fraction of the real properties and transportation equipment values. Advances on accounts receivable and inventory are subject to change based on periodic commercial finance examinations and appraisals, and the real property and transportation equipment values included in the borrowing base are subject to change based on periodic appraisals. Audits and appraisals are conducted at the direction of the administrative agent for the benefit and on behalf of all lenders.

Current wording

Performance Food Group, Inc. is the lead borrower under the ABL Facility, which is jointly and severally guaranteed by, and secured by the majority of the assets of, PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). Availability for loans and letters of credit under the ABL Facility is governed by a borrowing base, determined by the application of specified advance rates against eligible assets, including trade accounts receivable, inventory, owned real property, and owned transportation equipment. The borrowing base is reduced quarterly by a cumulative fraction of the real property and transportation equipment values. Advances on accounts receivable and inventory are subject to change based on periodic commercial finance examinations and appraisals, and the real property and transportation equipment values included in the borrowing base are subject to change based on periodic appraisals. Audits and appraisals are conducted at the direction of the administrative agent for the benefit and on behalf of all lenders.

Previous wording

Total assets for Foodservice increased $288.5 million from $6,294.0 million as of December 31, 2022 to $6,582.5 million as of December 30, 2023. During this time period, this segment increased its property, plant and equipment, operating lease right-of-use assets, and accounts receivable, partially offset by a decrease in intangible assets and inventory. Total assets for Foodservice increased $70.9 million from $6,511.6 million as of July 1, 2023 to $6,582.5 million as of December 30, 2023. During this time period, this segment increased its operating lease right-of-use assets and property, plant and equipment, partially offset by a decrease in inventory, intangible assets, and accounts receivable.

Current wording

Total assets for Foodservice increased $394.2 million from $6,400.0 million as of April 1, 2023 to $6,794.2 million as of March 30, 2024. During this time period, this segment increased its property, plant and equipment, operating lease right-of-use assets, and accounts receivable, partially offset by a decrease in intangible assets. Total assets for Foodservice increased $282.6 million from $6,511.6 million as of July 1, 2023 to $6,794.2 million as of March 30, 2024. During this time period, this segment increased its property, plant and equipment, operating lease right-of-use assets, and accounts receivable, partially offset by a decrease in intangible assets and inventory.

Previous wording

Total assets for Vistar increased $218.9 million from $1,216.0 million as of December 31, 2022 to $1,434.9 million as of December 30, 2023. During this time period, this segment increased its operating lease right-of-use assets, intangible assets, goodwill, accounts receivable, property, plant and equipment, and inventory primarily as a result of a recent acquisition. Total assets for Vistar increased $142.2 million from $1,292.7 million as of July 1, 2023 to $1,434.9 million as of December 30, 2023. During this time period, this segment increased its operating lease right-of-use assets, intangible assets, goodwill, and property, plant and equipment primarily as a result of a recent acquisition, partially offset by a decrease in accounts receivable and inventory.

Current wording

Total assets for Vistar increased $205.5 million from $1,225.9 million as of April 1, 2023 to $1,431.4 million as of March 30, 2024. During this time period, this segment increased its property, plant and equipment, operating lease right-of-use assets, intangible assets, goodwill, and inventory, primarily as a result of a recent acquisition. Total assets for Vistar increased $138.7 million from

Previous wording

Total assets for Convenience decreased $50.2 million from $4,135.9 million as of December 31, 2022 to $4,085.7 million as of December 30, 2023. During this time period, the segment decreased its intangible assets and operating lease right-of-use assets, partially offset by an increase in accounts receivable. Total assets for Convenience decreased $140.5 million from $4,226.2 million as of July 1, 2023 to $4,085.7 million as of December 30, 2023. During this time period, the segment decreased its accounts receivable, intangible assets, inventory, prepaid expenses and other current assets, and operating lease right-of-use assets.

Current wording

Total assets for Convenience decreased $240.7 million from $4,064.8 million as of April 1, 2023 to $3,824.1 million as of March 30, 2024. During this time period, the segment decreased its inventory, intangible assets, and operating lease right-of-use assets, partially offset by an increase in property, plant and equipment. Total assets for Convenience decreased $402.1 million from $4,226.2 million as of July 1, 2023 to $3,824.1 million as of March 30, 2024. During this time period, the segment decreased its inventory, accounts receivable, intangible assets, and operating lease right-of-use assets.