Performance Food Group Co

Previous wording

Changing demographic and macroeconomic trends. Excluding the peak years of the COVID-19 pandemic, the share of consumer spending captured by the food-away-from-home industry has increased steadily for several decades. The share increases in periods of increasing employment, rising disposable income, increases in the number of restaurants, and favorable demographic trends, such as smaller household sizes, an increasing number of dual income households, and an aging population base that spends more per capita at foodservice establishments and is adversely impacted when these factors move in the opposite direction. The foodservice distribution industry is also sensitive to national and regional economic conditions, such as changes in consumer spending, changes in consumer confidence, changes in the rate of inflation and fuel prices, supply chain disruptions, and labor shortages.

Current wording

Changing demographic and macroeconomic trends. Excluding the peak years of the COVID-19 pandemic, the share of consumer spending captured by the food-away-from-home industry has increased steadily for several decades. The share increases in periods of increasing employment, rising disposable income, increases in the number of restaurants, and favorable demographic trends, such as smaller household sizes, an increasing number of dual income households, and an aging population base that spends more per capita at foodservice establishments and is adversely impacted when these factors move in the opposite direction. The foodservice distribution industry is also sensitive to national and regional economic conditions, such as changes in consumer spending, changes in consumer confidence, and changes in the rate of inflation and fuel prices, supply chain disruptions, and labor shortages.

Previous wording

Includes asset impairments, gains and losses on disposal of fixed assets, 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 an $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.

Previous wording

Three months ended September 28, 2024 compared to the three months ended September 30, 2023

Current wording

Three and six months ended December 28, 2024 compared to the three and six months ended December 30, 2023

Previous wording

Net sales growth is a function of acquisitions, case growth, pricing (which is primarily based on product inflation/deflation), and a changing mix of customers, channels, and product categories sold. Net sales increased $476.9 million, or 3.2%, for the first three months of fiscal 2025 compared to the first three months of fiscal 2024.

Current wording

Net sales growth is a function of acquisitions, case growth, pricing (which is primarily based on product inflation/deflation), and a changing mix of customers, channels, and product categories sold. Net sales increased $1,342.5 million, or 9.4%, from the second quarter of fiscal 2024 to the second quarter of fiscal 2025, and net sales increased $1,819.4 million, or 6.2%, for the first six months of fiscal 2025 compared to the first six months of fiscal 2024.

Previous wording

The increase in net sales was driven by recent acquisitions, an increase in cases sold including a favorable shift in mix of cases sold, and an increase in selling price per case as a result of inflation. Total case volume increased 2.6% in the first three months of fiscal 2025 compared to the same period of fiscal 2024. Total organic case volume growth of 1.2% benefited from a 4.3% increase in organic independent cases, including growth in Performance Brands cases, and growth in cases sold to Foodservice's Chain business. The overall rate of product cost inflation was approximately 5.0% for the first three months of fiscal 2025.

Current wording

The increase in net sales was driven by recent acquisitions, including the Cheney Brothers acquisition, an increase in cases sold including a favorable shift in mix of cases sold, and an increase in selling price per case as a result of inflation. Total case volume increased 9.8% and 6.1% during the second quarter and first six months of fiscal 2025, respectively, compared to the same periods of fiscal 2024. Total organic case volume increased 2.1% in the second quarter of fiscal 2025 and increased 1.6% in the first six months of fiscal 2025, compared to the same periods of fiscal 2024. Total organic case volume benefited from an increase of 5.0% and 4.6% in organic independent cases sold during the second quarter and first six months of fiscal 2025, respectively, including growth in Performance Brands cases, and growth in cases sold to Foodservice’s Chain business. The overall rate of product cost inflation was approximately 4.6% and 4.8% for the second quarter and first six months of fiscal 2025, respectively.

Previous wording

Gross profit increased $101.3 million, or 6.1%, for the first three months of fiscal 2025 compared to the first three months of fiscal 2024. The increase in gross profit was primarily driven by recent acquisitions, cost of goods sold optimization through procurement efficiencies, a favorable shift in the mix of cases sold, and 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 $229.7 million, or 14.4%, for the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024 and increased $331.0 million, or 10.2%, for the first six months of fiscal 2025 compared to the first six months of fiscal 2024. The increases in gross profit for the second quarter and the first six months of fiscal 2025 were primarily driven by recent acquisitions, including the Cheney Brothers acquisition, cost of goods sold optimization through procurement efficiencies, as well as a favorable shift in the mix of 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.

Previous wording

Operating expenses increased $102.2 million, or 7.1%, for the first three months of fiscal 2025 compared to the first three months of fiscal 2024. The increase in operating expenses for the first three months of fiscal 2025 was primarily driven by recent acquisitions, a $41.9 million increase in personnel expenses primarily related to wages, commissions, and benefits, and an $12.2 million increase in insurance expense primarily related to workers’ compensation and vehicle liability, partially offset by a $9.0 million decrease in fuel expense primarily due to lower fuel prices in the first three months of fiscal 2025 as compared to the prior year period.

Current wording

Operating expenses increased $244.8 million, or 17.2%, for the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024. The increase in operating expenses was primarily driven by recent acquisitions, including the Cheney Brothers acquisition, a $48.2 million increase in personnel expense primarily related to wages, commissions, and benefits, and a $7.8 million increase in professional fees primarily related to recent acquisitions, partially offset by a $12.6 million decrease in fuel expense primarily due to lower fuel prices in the second quarter of fiscal 2025 as compared to the prior year period.

Previous wording

Depreciation and amortization of intangible assets increased from $129.3 million for the first three months of fiscal 2024 to $152.9 million in the first three months of fiscal 2025. Depreciation of fixed assets and amortization of intangible assets increased as a result of recent acquisitions, an increase in transportation equipment under finance leases, and accelerated amortization of certain customer relationships and trade names.

Current wording

Depreciation and amortization of intangible assets increased from $143.3 million in the second quarter of fiscal 2024 to $182.5 million in the second quarter of fiscal 2025. Depreciation and amortization of intangible assets increased from $272.6 million in the first six months of fiscal 2024 to $335.4 million in the first six months of fiscal 2025. Depreciation and amortization of intangible assets increased as a result of recent acquisitions, an increase in transportation equipment under finance leases, and accelerated amortization of certain customer relationships and trade names.

Previous wording

Net income decreased $12.7 million, or 10.5% for the first three months of fiscal 2025 compared to the first three months of fiscal 2024. The decrease in net income was primarily attributable to the increase in operating expenses, interest expense, and other expense, partially offset by the increase in gross profit and decrease in income tax expense. The increase in interest expense was primarily the result of an increase in the average borrowings, including finance lease obligations, during the first three months fiscal 2025 compared to the prior year period.

Current wording

Net income decreased $35.9 million, or 45.8%, for the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024 driven by an increase in interest expense and decrease in operating profit, partially offset by a decrease in income tax expense. Net income decreased $48.6 million, or 24.4%, for the first six months of fiscal 2025 compared to the first six months of fiscal 2024 due to an increase in interest expense and decrease in operating profit, partially offset by a decrease in income tax expense. The increase in interest expense was primarily the result of an increase in the average borrowings, including finance lease obligations, during the second quarter and first six months of fiscal 2025 compared to the prior year periods.

Previous wording

The Company reported income tax expense of $38.9 million for the first three months of fiscal 2025 compared to income tax expense of $42.6 million for the first three months of fiscal 2024. Our effective tax rate for the first three months of fiscal 2025 was 26.5% compared to 26.1% for the first three months of fiscal 2024. The effective tax rate for the period ended September 28, 2024, differed from the prior year period primarily due to an increase in foreign taxes and a decrease in deductible discrete items related to stock-based compensation, partially offset by a decrease in state taxes and an increase in federal credits.

Current wording

The Company reported income tax expense of $14.3 million and $53.2 million for the second quarter and first six months of fiscal 2025, respectively, compared to income tax expense of $33.4 million and $76.0 million for the second quarter and first six months of fiscal 2024, respectively. Our effective tax rates for the second quarter and first six months of fiscal 2025 were 25.2% and 26.1%, respectively, compared to 29.9% and 27.6% for the second quarter and first six months of fiscal 2024, respectively. The effective tax rates for the periods ended December 28, 2024, differed from the prior year periods primarily due to an increase in deductible discrete items related to stock-based compensation, a decrease in state and foreign taxes, and an increase in federal credits, partially offset by an increase in non-deductible expenses.

Previous wording

The Company has three reportable segments: Foodservice, Vistar, and Convenience. Management evaluates the performance of these segments based on various operating and financial metrics, including their respective sales growth and Segment Adjusted EBITDA, which is the Company’s GAAP measure of segment profit. Segment Adjusted EBITDA is defined as net income before interest expense, interest income, income taxes, depreciation, and amortization and excludes certain items that the Company does not consider part of its segments’ core operating results, including stock-based compensation expense, changes in the LIFO reserve, acquisition, integration and reorganization expenses, and gains and losses related to fuel derivatives. See Note 13. Segment Informationof the consolidated financial statements within Part I, Item 1. Financial Statementsin this Form 10-Q.

Current wording

The Company has three reportable segments: Foodservice, Vistar, and Convenience. Management evaluates the performance of these segments based on various operating and financial metrics, including their respective sales growth and Segment Adjusted EBITDA, which is the Company’s GAAP measure of segment profit. Segment Adjusted EBITDA is defined as net income before interest expense, interest income, income taxes, depreciation, and amortization and excludes certain items that the Company does not consider part of its segments’ core operating results, including stock-based compensation expense, changes in the LIFO reserve, acquisition, integration, and reorganization expenses, and gains and losses related to fuel derivatives. Refer to Note 13. Segment Informationof the consolidated financial statements in the Form 10-Q for additional information.

Previous wording

Net sales for Foodservice increased $415.1 million, or 5.7%, from the first three months of fiscal 2024 to the first three months of fiscal 2025. This increase in net sales was driven by a recent acquisition, an increase in selling price per case as a result of inflation, and case volume growth, including growth in our independent and Chain business. Total case growth for Foodservice was 2.9% and organic case growth was 1.6% for the first three months of fiscal 2025, compared to the prior year period. Securing new and expanding business with independent customers resulted in total independent case growth of 7.8% and organic independent case growth of 4.3% in the first three months of fiscal 2025, compared to the prior year period. For the quarter, independent sales as a percentage of total Foodservice segment sales were 41.7%.

Current wording

Net sales for Foodservice increased $1,289.0 million, or 18.2%, from the second quarter of fiscal 2024 to the second quarter of fiscal 2025 and increased $1,704.1 million, or 11.9%, from the first six months of fiscal 2024 to the first six months of fiscal 2025. These increases in net sales were driven by recent acquisitions, an increase in selling price per case as a result of inflation, and case volume growth, including growth in our independent and Chain business. The acquisition of Cheney Brothers contributed $825.0 million to net sales in the second quarter and first six months of fiscal 2025. Total case growth for Foodservice was 15.0% in the second quarter of fiscal 2025 and 8.9% in the first six months of fiscal 2025, compared to the prior year periods. Securing new and expanding business with independent customers resulted in total independent case growth of 19.8% and 13.5% for the second quarter and first six months of fiscal 2025, respectively, compared to the prior year periods. Organic independent case growth was 5.0% and 4.6% in the second quarter and first six months of fiscal 2025, respectively, compared to the prior year periods. For the second quarter and first six months of fiscal 2025, independent sales as a percentage of total Foodservice sales were 40.1% and 40.9%, respectively.

Previous wording

Adjusted EBITDA for Foodservice increased $34.0 million, or 13.8%, from the first three months of fiscal 2024 to the first three months of fiscal 2025. This increase was 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 $65.7 million, or 6.4%, in the first three months of fiscal 2025, compared to the prior year period. The increase in gross profit was driven by a recent acquisition, a favorable shift in the mix of cases sold, and growth in cases sold, including more Performance Brands products sold to independent customers.

Current wording

Adjusted EBITDA for Foodservice increased $65.8 million, or 29.4%, from the second quarter of fiscal 2024 to the second quarter of fiscal 2025. Adjusted EBITDA for Foodservice increased $99.8 million, or 21.2%, from the first six months of fiscal 2024 to the first six months of fiscal 2025. 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 $223.0 million, or 22.8%, in the second quarter of fiscal 2025 and increased $288.7 million, or 14.4%, in the first six months of fiscal 2025, compared to the prior year periods. The increase in gross profit was driven by recent acquisitions, a favorable shift in the mix of cases sold, and growth in cases sold, including more Performance Brands products sold to our independent customers. Cheney Brothers contributed $145.4 million to Foodservice’s gross profit impacting Adjusted EBITDA in the second quarter and first six months of fiscal 2025.

Previous wording

Depreciation and amortization of intangible assets recorded in this segment increased from $70.6 million in the first three months of fiscal 2024 to $85.0 million in the first three months of fiscal 2025 as a result of an increase in transportation equipment under finance leases and a recent acquisition.

Current wording

Depreciation and amortization of intangible assets recorded in this segment increased from $72.7 million in the second quarter of fiscal 2024 to $115.6 million in the second quarter of fiscal 2025 and increased from $143.3 million in the first six months of fiscal 2024 to $200.6 million in the first six months of fiscal 2025 as a result of recent acquisitions and an increase in transportation equipment under finance leases. Total depreciation and amortization related to Cheney Brothers was $26.5 million in the second quarter and first six months of fiscal 2025.

Previous wording

Net sales for Vistar increased $35.3 million, or 2.8%, from the first three months of fiscal 2024 to the first three months of fiscal 2025. The increase in net sales was driven primarily by an acquisition in the second quarter of fiscal 2024. Total organic case volume growth for Vistar was flat, as growth in the vending, office coffee service, and corrections channels was offset by declines in theater and retail cases sold, in the first three months of fiscal 2025 compared to the prior year period.

Current wording

Net sales for Vistar increased $32.7 million, or 2.7%, from the second quarter of fiscal 2024 to the second quarter of fiscal 2025 and increased $68.0 million, or 2.8%, from the first six months of fiscal 2024 to the first six months of fiscal 2025. The increase in net sales for the second quarter of fiscal 2025 was primarily driven by case volume growth in the vending, office coffee service, theater, and corrections channels, as well as an increase in selling price per case due to a change in sales mix. The increase in net sales for the first six months of fiscal 2025 was driven primarily by an acquisition in the second quarter of fiscal 2024. Total organic case volume growth for Vistar for the first six months of fiscal 2025 was flat, as growth in the vending, office coffee service, and corrections channels was offset by declines in theater and retail cases sold compared to the prior year period.

Previous wording

Adjusted EBITDA for Vistar decreased $5.4 million, or 6.1%, from the first three months of fiscal 2024 to the first three months of fiscal 2025. The decrease was the result of an increase in operating expenses, partially offset by an increase in gross profit. Gross profit increased $19.0 million, or 9.1%, for the first three months of fiscal 2025 compared to the prior year period primarily driven by an acquisition in the second quarter of fiscal 2024.

Current wording

Adjusted EBITDA for Vistar increased $0.3 million, or 0.3%, from the second quarter of fiscal 2024 to the second quarter of fiscal 2025. This increase was a result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Vistar’s Adjusted EBITDA increased $2.7 million, or 1.2%, for the second quarter of fiscal 2025 primarily driven by inventory holding gains. Adjusted EBITDA for Vistar decreased $5.1 million, or 2.8%, from the first six months of fiscal 2024 to the first six months of fiscal 2025. This decrease was the result of an increase in operating expenses, partially offset by an increase in gross profit. Gross profit contributing to Vistar’s Adjusted EBITDA increased $21.7 million, or 5.0%, for the first six months of fiscal 2025 compared to the prior year period primarily driven by an acquisition in the second quarter of fiscal 2024.

Previous wording

Operating expenses impacting Vistar's Adjusted EBITDA increased $24.3 million, or 20.2%, for the first three months of fiscal 2025 compared to the prior year period. Operating expenses increased $18.1 million due to an acquisition in the second quarter of fiscal 2024, $3.0 million due to variable operational expenses as a result of a shift in channel mix, and $2.1 million due to an increase in occupancy costs associated with building expansions compared to the prior year period.

Current wording

Operating expenses impacting Vistar’s Adjusted EBITDA increased $2.7 million, or 2.0%, from the second quarter of fiscal 2024 to the second quarter of fiscal 2025 primarily due to an increase in personnel expenses. Operating expenses impacting Vistar’s Adjusted EBITDA increased $27.0 million, or 10.7%, from the first six months of fiscal 2024 to the first six months of fiscal 2025 primarily driven by $18.1 million in costs related to an acquisition in the second quarter of fiscal 2024, $4.5 million in variable operational expenses as a result of a shift in channel mix, and a $2.4 million increase in occupancy costs associated with building expansions compared to the prior year period.

Previous wording

Depreciation and amortization of intangible assets recorded in this segment increased from $10.4 million in the first three months of fiscal 2024 to $14.4 million in the first three months of fiscal 2025 due primarily to an acquisition in the second quarter of fiscal 2024.

Current wording

Depreciation and amortization of intangible assets recorded in this segment increased from $12.8 million in the second quarter of fiscal 2024 to $13.3 million in the second quarter of fiscal 2025 and increased from $23.2 million in the first six months of fiscal 2024 to $27.7 million in the first six months of fiscal 2025 due primarily to an acquisition in the second quarter of fiscal 2024.

Previous wording

Net sales for Convenience increased $26.7 million, or 0.4%, from the first three months of fiscal 2024 to the first three months of fiscal 2025 driven primarily by an increase in selling price per case as a result of continued inflation for food and foodservice related products and cigarette manufacturers’ price increases, as well as an increase in food and foodservice related cases sold, partially offset by a decline in cigarette carton sales.

Current wording

Net sales for Convenience increased $26.1 million, or 0.4%, from the second quarter of fiscal 2024 to the second quarter of fiscal 2025 and increased $52.8 million, or 0.4%, from the first six months of fiscal 2024 to the first six months of fiscal 2025. These increases in net sales for the second quarter and the first six months of fiscal 2025 were driven primarily by an increase in selling price per case as a result of continued inflation and growth in cases sold for food and foodservice related products, partially offset by a decline in cigarette carton sales.

Previous wording

Adjusted EBITDA for Convenience increased $10.6 million, or 11.2%, from the first three months of fiscal 2024 to the first three months of fiscal 2025. This increase was a result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Convenience's Adjusted EBITDA increased $13.7 million, or 3.3%, for the first three months of fiscal 2025 compared to the prior year period primarily due to a favorable shift in mix of cases sold and growth in cases sold.

Current wording

Adjusted EBITDA for Convenience increased $34.4 million, or 19.3%, from the first six months of fiscal 2024 to the first six months of fiscal 2025. This increase was a result of an increase in gross profit, partially offset by an increase in operating expenses. Gross profit contributing to Convenience’s Adjusted EBITDA increased $45.8 million, or 5.8%, for the first six months of fiscal 2025 compared to the prior year period primarily due to an increase in inventory holding gains, pricing improvement from procurement efficiencies, and a favorable shift in mix of cases sold. Operating expenses impacting Convenience’s Adjusted EBITDA increased $11.1 million, or 1.8%, from the first six months of fiscal 2024 to the first six months of fiscal 2025. Operating expenses increased primarily as a result of a $10.1 million increase in personnel expenses and a $5.2 million increase in insurance expense, partially offset by a $4.8 million decrease in fuel expense driven by lower fuel prices compared to the prior year period.

Previous wording

Net sales for Corporate & All Other increased $15.7 million from the first three months of fiscal 2024 to the first three months of fiscal 2025. The increase was primarily attributable to an increase in products and services sold to our other segments.

Current wording

Net sales for Corporate & All Other increased $12.5 million from the second quarter of fiscal 2024 to the second quarter of fiscal 2025 and increased $28.2 million from the first six months of fiscal 2024 to the first six months of fiscal 2025. The increase was primarily attributable to an increase in products and services sold to our other segments.

Previous wording

Adjusted EBITDA for Corporate & All Other was a negative $56.6 million for the first three months of fiscal 2025 compared to a negative $45.5 million for the first three months of fiscal 2024. The decline in Adjusted EBITDA was primarily driven by a $5.4 million increase in corporate personnel expense and a $2.7 million increase in information technology maintenance expense primarily related to cloud-based services.

Current wording

Adjusted EBITDA for Corporate & All Other was a negative $68.1 million for the second quarter of fiscal 2025 compared to a negative $55.8 million for the second quarter of fiscal 2024 and was a negative $124.7 million for the first six months of fiscal 2025 compared to a negative $101.3 million for the first six months of fiscal 2024. The decline in Adjusted EBITDA was primarily driven by increases in corporate personnel expenses of $8.3 million and $13.2 million and increases in information technology maintenance expense primarily related to cloud-based services of $1.3 million and $3.9 million for the second quarter and first six months of fiscal 2025, respectively.

Previous wording

Depreciation and amortization of intangible assets recorded in this segment increased from $10.6 million in the first three months of fiscal 2024 to $14.9 million in the first three months of fiscal 2025 due to accelerated amortization of certain customer relationships and trade names.

Current wording

Depreciation and amortization of intangible assets recorded in this segment decreased from $20.6 million in the second quarter of fiscal 2024 to $14.6 million in the second quarter of fiscal 2025 and decreased from $31.2 million for the first six months of fiscal 2024 to $29.5 million for the first six months of fiscal 2025 due to prior period accelerated 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 net proceeds from the issuances of senior notes. Our working capital and borrowing levels are subject to seasonal fluctuations and timing of procurement and acquisition activities. 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 net proceeds from the issuances of senior notes. Our working capital and borrowing levels are subject to seasonal fluctuations and the timing of procurement and acquisition activities. 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.

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 September 28, 2024, $350.0 million of the outstanding ABL Facility balance is currently hedged under interest rate swaps which results in 89% 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 December 28, 2024, $150.0 million of the outstanding ABL Facility balance is currently hedged under interest rate swaps which results in 63% of our total debt outstanding, including finance lease obligations, being fixed-rate debt.

Previous wording

In November 2022, the Board of Directors authorized a 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 first quarter of fiscal 2025, the Company repurchased 0.4 million shares of the Company's common stock, for a total of $29.5 million or an average cost of $74.69 per share. During the three months ended September 30, 2023, the Company repurchased and subsequently retired 0.5 million shares of the Company's common stock, for a total of $28.1 million or an average cost of $60.35 per share. As of September 28, 2024, $181.1 million remained available for share repurchases.

Current wording

In November 2022, the Board of Directors authorized a 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 current 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 28, 2024, the Company repurchased and subsequently retired 0.4 million shares of the Company’s common stock for a total of $33.6 million or an average cost of $75.19 per share. During the six months ended December 30, 2023, the Company repurchased and subsequently retired 1.3 million shares of the Company’s common stock for a total of $78.1 million or an average cost of $58.83 per share. As of December 28, 2024, approximately $177.0 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 September 28, 2024, the Company had total purchase obligations of $199.7 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 September 28, 2024, the Company had commitments of $114.8 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 September 28, 2024.

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. Refer to Note 6. Debt and Note 7. Leases of the consolidated financial statements in the Form 10-Q for information regarding the Company’s expected cash requirements related to long-term debt and operating and finance leases, respectively. As of December 28, 2024, the Company had total purchase obligations of $269.8 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 28, 2024, the Company had commitments of $176.1 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 28, 2024.

Previous wording

As of September 28, 2024, our cash balance totaled $50.3 million, including restricted cash of $7.8 million, as compared to a cash balance totaling $27.7 million, including restricted cash of $7.7 million, as of June 29, 2024.

Current wording

As of December 28, 2024, our cash balance totaled $18.7 million, including restricted cash of $8.0 million, as compared to a cash balance totaling $27.7 million, including restricted cash of $7.7 million, as of June 29, 2024.

Previous wording

During the first three months of fiscal 2025 and fiscal 2024, our operating activities provided cash flow of $53.5 million and $87.1 million, respectively. The decrease in cash flow provided by operating activities in the first three months of fiscal 2025 compared to the first three months of fiscal 2024 was largely driven by advanced purchases of cigarette and candy inventory to take advantage of preferred pricing.

Current wording

During the first six months of fiscal 2025 and fiscal 2024, our operating activities provided cash flow of $379.0 million and $554.0 million, respectively. The decrease in cash flow provided by operating activities in the first six months of fiscal 2025 compared to the first six months of fiscal 2024 was largely driven by advanced purchases of cigarette and candy inventory to take advantage of preferred pricing.

Previous wording

Cash used in investing activities totaled $669.8 million in the first three months of fiscal 2025 compared to $266.9 million in the first three months of fiscal 2024. These investments consisted of cash paid of $574.3 million for an acquisition in the first three months of fiscal 2025 compared to $214.6 million for an acquisition in the first three months of fiscal 2024, along with capital purchases of property, plant, and equipment of $96.5 million and $53.2 million for the first three months of fiscal 2025 and the first three months of fiscal 2024, respectively. For the first three months of fiscal 2025, purchases of property, plant, and equipment primarily consisted of outlays for warehouse expansion and improvements, warehouse equipment, information technology, and transportation equipment. The following table presents the capital purchases of property, plant, and equipment by segment.

Current wording

Cash used in investing activities totaled $2,736.7 million in the first six months of fiscal 2025 compared to $436.4 million in the first six months of fiscal 2024. These investments consisted of cash paid for acquisitions of $2,535.5 million in the first six months of fiscal 2025 compared to $308.1 million in the first six months of fiscal 2024, along with capital purchases of property, plant, and equipment of $203.9 million and $147.1 million for the first six months of fiscal 2025 and the first six months of fiscal 2024, respectively. For the first six months of both fiscal 2025 and 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 three months of fiscal 2025, our financing activities provided cash flow of $638.9 million, which consisted primarily of $1.0 billion in cash received from the issuance and sale of the Notes due 2032, partially offset by $263.7 million in net payments under our ABL Facility.

Current wording

During the first six months of fiscal 2025, our financing activities provided cash flow of $2,348.7 million, which consisted primarily of $1,499.9 million in net borrowings under our ABL Facility and $1.0 billion in cash received from the issuance and sale of the Notes due 2032, partially offset by $84.8 million in payments under finance lease obligations.

Previous wording

During the first three months of fiscal 2024, our financing activities provided cash flow of $175.0 million, which consisted primarily of $249.0 million in net borrowings under our ABL Facility.

Current 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 $56.5 million in payments under finance lease obligations.

Previous wording

The following table summarizes outstanding borrowings, availability, and the average interest rate under the Company's ABL Facility:

Current wording

The following table summarizes outstanding borrowings, availability, and the average interest rate under the Company’s credit agreement:

Previous wording

The ABL Facility contains covenants requiring the maintenance of a minimum consolidated fixed charge coverage ratio if Alternate Availability (as defined in the ABL Facility) falls below the greater of (i) $375.0 million and (ii) 10% of the lessor of the borrowing base and the sum of (a) the aggregate commitments plus (b) any outstanding term loans for five consecutive business days. The ABL Facility also contains customary restrictive covenants that include, but are not limited to, restrictions on the loan parties' and their subsidiaries' abilities to incur additional indebtedness, pay dividends, create liens, make investments, make prepayments, redemptions, or defeasances prior to the maturity of certain restricted debt and dispose of assets. The ABL Facility provides for customary events of default, including payment defaults and cross-defaults on other material indebtedness. If an event of default occurs and is continuing, amounts due under the ABL Facility may be accelerated and the rights and remedies of the lenders may be exercised, including rights with respect to the collateral securing the obligations under such agreement.

Current wording

The ABL Facility contains covenants requiring the maintenance of a minimum consolidated fixed charge coverage ratio if Alternate Availability (as defined in the ABL Facility) falls below the greater of (i) $375.0 million and (ii) 10% of the lesser of the borrowing base and the sum of (a) the aggregate commitments plus (b) any outstanding term loans for five consecutive business days. The ABL Facility also contains customary restrictive covenants that include, but are not limited to, restrictions on the loan parties' and their subsidiaries’ abilities to incur additional indebtedness, pay dividends, create liens, make investments, make prepayments, redemptions, or defeasances prior to the maturity of the certain restricted debt, and dispose of assets. The ABL Facility provides for customary events of default, including payment defaults and cross-defaults on other material indebtedness. If an event of default occurs and is continuing, amounts due under the ABL Facility may be accelerated and the rights and remedies of the lenders may be exercised, including rights with respect to the collateral securing the obligations under such agreement.

Previous wording

Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2027 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2027 at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Beginning on October 15, 2024, Performance Food Group, Inc. may redeem all or part of the Notes due 2027 at a redemption price equal to 100.0% of the principal amount redeemed, plus accrued and unpaid interest.

Current wording

Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2027 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2027 at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. may redeem all or part of the Notes due 2027 at a redemption price equal to 100.0% of the principal amount redeemed, plus accrued and unpaid interest.

Previous wording

The ABL Facility and the indentures governing the Notes due 2027, the Notes due 2029, and the Notes due 2032 contain customary restrictive covenants under which all of the net assets of PFGC and its subsidiaries were restricted from distribution to Performance Food Group Company, except for approximately $1,872.2 million of restricted payment capacity available under such debt agreements, as of September 28, 2024. Such minimum estimated restricted payment capacity is calculated based on the most restrictive of our debt agreements and may fluctuate from period to period, which fluctuations may be material. Our restricted payment capacity under other debt instruments to which the Company is subject may be materially higher than the foregoing estimate.

Current wording

The ABL Facility and the indentures governing the Notes due 2027, the Notes due 2029, and the Notes due 2032 contain customary restrictive covenants under which all of the net assets of PFGC and its subsidiaries were restricted from distribution to Performance Food Group Company, except for approximately $1,428.4 million of restricted payment capacity available under such debt agreements, as of December 28, 2024. Such minimum estimated restricted payment capacity is calculated based on the most restrictive of our debt agreements and may fluctuate from period to period, which fluctuations may be material. Our restricted payment capacity under other debt instruments to which the Company is subject may be materially higher than the foregoing estimate.

Previous wording

Total assets for Foodservice increased $1,251.7 million from $6,633.1 million as of September 30, 2023 to $7,884.8 million as of September 28, 2024. Total assets for Foodservice increased $888.0 million from $6,996.8 million as of June 29, 2024 to $7,884.8 million as of September 28, 2024. During both time periods, this segment increased its goodwill, intangible assets, property, plant and equipment, accounts receivable, and inventory primarily due to an acquisition. Property, plant and equipment also increased due to additions of transportation equipment under finance leases and warehouse expansion and improvement projects.

Current wording

Total assets for Foodservice increased $3,961.2 million from $6,582.5 million as of December 30, 2023 to $10,543.7 million as of December 28, 2024. Total assets for Foodservice increased $3,546.9 million from $6,996.8 million as of June 29, 2024 to $10,543.7 million as of December 28, 2024. During both time periods, Foodservice increased its assets primarily due to recent acquisitions within the segment.

Previous wording

Total assets for Vistar increased $208.8 million from $1,331.5 million as of September 30, 2023 to $1,540.3 million as of September 28, 2024. During this time period, this segment increased its property, plant and equipment, goodwill, intangible assets, operating lease right-of-use assets, and inventory due to a fiscal 2024 acquisition. Total assets for Vistar increased $21.2 million from $1,519.1 million as of June 29, 2024 to $1,540.3 million as of September 28, 2024. During this time period, this segment increased its inventory and property, plant and equipment.

Current wording

Total assets for Vistar increased $131.6 million from $1,434.9 million as of December 30, 2023 to $1,566.5 million as of December 28, 2024. During this time period, this segment increased its inventory due to advanced purchases of certain products to take advantage of preferred pricing, increased its property, plant and equipment due to additional transportation equipment under finance leases, and increased its operating lease right-of-use assets due to warehouse expansion, partially offset by a decrease in intangible assets due to normal amortization. Total assets for Vistar increased $47.4 million from $1,519.1 million as of June 29, 2024 to $1,566.5 million as of December 28, 2024. During this time period, this segment increased its inventory due to advanced purchases of certain products to take advantage of preferred pricing and increased its operating lease right-of-use assets due to warehouse expansion, partially offset by a decrease in accounts receivable.