Chefs Warehouse Inc
For the period ended Jun 28, 2024. Filed Jul 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 28, 2024 · Filed Jul 31, 2024
CHEF$103.77+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-29; filed 2024-05-01.
0001517175-24-000011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-28; filed 2024-07-31.
0001517175-24-000013
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 39 previous paragraphs and 53 current paragraphs.
27 unchanged; 12 reworded; 10 added; 0 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 10 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Other operating expenses, net decreased by $3.8 million primarily due to an impairment charge on customer relationships intangible assets of $1.8 million recorded during the thirteen weeks ended June 30, 2023 related to the loss of a significant Hardie’s Fresh Foods customer post-acquisition and lower third-party deal costs incurred in connection with business acquisitions and financing arrangements during the thirteen weeks ended June 28, 2024 compared to the prior year quarter.
Current report
Interest expense decreased primarily due to lower principal amounts outstanding on the senior secured term loans in 2024.
Current report
Twenty-Six Weeks Ended June 28, 2024 Compared to Twenty-Six Weeks Ended June 30, 2023
Current report
Net Sales
Current report
Gross Profit
Current report
Selling, General and Administrative Expenses
Current report
Other Operating Expenses, Net
Current report
Interest Expense
Current report
Provision for Income Taxes
Current report
During the twenty-six weeks ended June 28, 2024, we made a scheduled principal payment of $5.0 million towards the unsecured note issued in connection with the GreenLeaf acquisition. The note is presented under the caption “Finance leases and other financing obligations” in the table above.
Reworded paragraphs (12)
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided as a supplement to the accompanying condensed consolidated financial statements and footnotes to help provide an understanding of our financial condition, changes in our financial condition and results of operations. The following discussion should be read in conjunction with information included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2023 (the “2023 Form 10-K”) filed with the Securities and Exchange Commission (“SEC”). Unless otherwise indicated, the terms “Company”, “Chefs’ Warehouse”, “we”, “us” and “our” refer to The Chefs’ Warehouse, Inc. and its subsidiaries.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided as a supplement to the accompanying condensed consolidated financial statements and footnotes to help provide an understanding of our financial condition, changes in our financial condition and results of operations. The following discussion should be read in conjunction with information included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2023 (the “2023 Form 10-K”) filed with the SEC. Unless otherwise indicated, the terms “Company”, “Chefs’ Warehouse”, “we”, “us” and “our” refer to The Chefs’ Warehouse, Inc. and its subsidiaries.
Previous wording
Organic growth contributed $63.3 million, or 8.8%, to sales growth and the remaining sales growth of $91.5 million, or 12.7%, resulted from acquisitions. Organic case count increased approximately 4.6% in our specialty category. In addition, specialty unique customers and placements increased 10.1% and 12.0%, respectively, compared to the prior year period. Organic pounds sold in our center-of-the-plate category increased 6.2% compared to the prior year. Estimated inflation was 1.2% in our specialty category and 4.6% in our center-of-the-plate category compared to the prior year period.
Current wording
Organic growth contributed $62.8 million, or 7.2%, to sales growth and the remaining sales growth of $10.1 million, or 1.1%, resulted from acquisitions. Organic case count increased approximately 4.7% in our specialty category. In addition, specialty unique customers and placements increased 8.2% and 11.3%, respectively, compared to the prior year period. Organic pounds sold in our center-of-the-plate category increased 2.9% compared to the prior year. Estimated inflation was 2.7% in our specialty category and 4.3% in our center-of-the-plate category compared to the prior year period.
Previous wording
The increase in selling, general and administrative expenses was primarily due to higher depreciation and amortization driven by acquisitions and facility investments, and higher costs associated with compensation and benefits, facilities and distribution to support sales growth. Our ratio of selling, general and administrative expenses to net sales increased 10 basis points due to increased near-term costs associated with our investments in facilities and acquisitions.
Current wording
The increase in selling, general and administrative expenses was primarily due to higher depreciation and amortization expenses driven by acquisitions and facility investments, and higher costs associated with compensation and benefits, facilities and distribution to support sales growth. Our ratio of selling, general and administrative expenses to net sales increased 10 basis points due to increased near-term costs associated with our investments in facilities and acquisitions.
Previous wording
Gross profit dollars increased primarily as a result of increased sales and price inflation. Gross profit margin increased approximately 37 basis points. Gross profit margins decreased 4 basis points in the Company’s specialty category and increased 18 basis points in the Company’s center-of-the-plate category.
Current wording
Gross profit dollars increased primarily as a result of sales growth and price inflation. Gross profit margin increased approximately 36 basis points. Gross profit margins increased 27 basis points in the Company’s specialty category and increased 7 basis points in the Company’s center-of-the-plate category.
Previous wording
Other operating expenses increased by $1.4 million primarily due to charges associated with employee severance in the first quarter of 2024.
Current wording
The decrease in net other operating expense relates primarily to an impairment charge on customer relationships intangible assets of $1.8 million recorded during the twenty-six weeks ended June 30, 2023 related to the loss of a significant Hardie’s Fresh Foods customer post-acquisition, non-cash credits of $0.6 million for changes in the fair value of our contingent earn-out liabilities in the current period compared to non-cash charges of $1.1 million in the prior year period and lower third-party deal costs incurred in connection with business acquisitions and financing arrangements during the twenty-six weeks ended June 28, 2024, partially offset by charges associated with employee severance in the first quarter of 2024.
Previous wording
Interest expense increased primarily driven by higher principal amounts of outstanding debt and higher rates of interest charged on the variable rate portion of our outstanding debt.
Current wording
Interest expense increased primarily driven by higher average principal amounts of outstanding debt during the period and higher rates of interest charged on the variable rate portion of our outstanding debt.
Previous wording
In March 2024, we amended our senior secured term loan agreement, which reduced the interest rate spread by 75 basis points on our senior secured term loan B facility. Additionally, during the thirteen weeks ended March 29, 2024, we made voluntary principal prepayments of $6.0 million towards the senior secured term loan.
Current wording
In March 2024, we amended our senior secured term loan agreement, which reduced the interest rate spread by 75 basis points on our senior secured term loan facility. Additionally, during the twenty-six weeks ended June 28, 2024, we made voluntary principal prepayments of $8.0 million towards the senior secured term loan.
Previous wording
In November 2023, we announced a two-year share repurchase program in an amount up to $100,000, targeting $25.0 million to $100.0 million of share repurchases by the end of fiscal 2025. During the thirteen weeks ended March 29, 2024, we repurchased 134,553 shares of our common stock at an average purchase price of $37.16 per share. The share repurchases were funded by our available cash. The remaining share purchase authorization was $95,000 at March 29, 2024. We are not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time.
Current wording
In November 2023, we announced a two-year share repurchase program in an amount up to $100.0 million, targeting $25.0 million to $100.0 million of share repurchases by the end of fiscal 2025. During the thirteen weeks ended June 28, 2024, we repurchased 129,523 shares of our common stock at an average purchase price of $38.58 per share and during the twenty-six weeks ended June 28, 2024, we repurchased 264,076 shares of our common stock at an average purchase price of $37.86 per share. The share repurchases were funded by our available cash. The remaining share purchase authorization was $90.0 million at June 28, 2024. We are not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time.
Previous wording
We expect our capital expenditures, excluding cash paid for acquisitions, for fiscal 2024 will be approximately $35.0 million to $45.0 million. We believe our existing balances of cash and cash equivalents, working capital and the availability under our asset-based loan facility, are sufficient to satisfy our working capital needs, capital expenditures, debt service and other liquidity requirements associated with our current operations over the next twelve months.
Current wording
We expect our capital expenditures, excluding cash paid for acquisitions, for fiscal 2024 will be approximately $40.0 million to $45.0 million. We believe our existing balances of cash and cash equivalents, working capital and the availability under our asset-based loan facility, are sufficient to satisfy our working capital needs, capital expenditures, debt service and other liquidity requirements associated with our current operations over the next twelve months.
Previous wording
Our cash provided by operating activities is predominately driven by net sales to our customers. Our cash used in operating activities is primarily driven by our payments to suppliers for our inventory, employee compensation, payments to support our facilities, our distribution network, interest on our indebtedness, payments to tax authorities and other general corporate expenditures. Net cash provided by operations was $30.9 million for the thirteen weeks ended March 29, 2024 compared to cash used in operating activities of $2.3 million for the thirteen weeks ended March 31, 2023. The increase in cash provided by operating activities was primarily due to lower inventory purchase levels in the current period as the prior year results included a strategic pull forward of inventory purchases that did not recur.
Current wording
Our cash provided by operating activities is predominately driven by net sales to our customers. Our cash used in operating activities is primarily driven by our payments to suppliers for our inventory, employee compensation, payments to support our facilities, our distribution network, interest on our indebtedness, payments to tax authorities and other general corporate expenditures. Net cash provided by operations was $60.2 million for the twenty-six weeks ended June 28, 2024 compared to $10.8 million for the twenty-six weeks ended June 30, 2023. The increase in cash provided by operating activities was primarily due to sales growth and lower inventory purchase levels in the current period as the prior year results included a strategic pull forward of inventory purchases that did not recur.
Previous wording
Net cash used in investing activities was $17.4 million for the thirteen weeks ended March 29, 2024, driven by capital expenditures of $17.1 million.
Current wording
Net cash used in investing activities was $33.4 million for the twenty-six weeks ended June 28, 2024, driven by capital expenditures of $33.1 million.
Previous wording
Net cash used in financing activities was $21.3 million for the thirteen weeks ended March 29, 2024 driven by $6.8 million of payments of debt and other financing obligations, $5.0 million used to repurchase our common stock, $7.1 million paid for shares surrendered to pay tax withholding related to the vesting of equity incentive plan awards, $1.3 million of earn-out payments and $1.1 million of finance lease payments.
Current wording
Net cash used in financing activities was $38.4 million for the twenty-six weeks ended June 28, 2024 driven by $14.5 million of payments of debt and other financing obligations, $10.0 million used to repurchase our common stock, $7.3 million paid for shares surrendered to pay tax withholding related to the vesting of equity incentive plan awards, $3.6 million of earn-out payments and $3.8 million of finance lease payments.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Gross profit dollars increased primarily as a result of increased sales and price inflation. Gross profit margin increased approximately 35 basis points. Gross profit margins increased 50 basis points in the Company’s specialty category and were relatively unchanged in the Company’s center-of-the-plate category.
Current report — wording carried from elsewhere
Organic growth contributed $126.2 million, or 7.9%, to sales growth and the remaining sales growth of $101.6 million, or 6.3%, resulted from acquisitions. Organic case count increased approximately 4.7% in our specialty category. In addition, specialty unique customers and placements increased 9.1% and 11.6%, respectively, compared to the prior year period. Organic pounds sold in our center-of-the-plate category increased 4.5% compared to the prior year. Estimated inflation was 2.1% in our specialty category and 4.5% in our center-of-the-plate category compared to the prior year period.
Current report — wording carried from elsewhere
The increase in selling, general and administrative expenses was primarily due to higher depreciation and amortization expenses, driven by acquisitions and facility investments, and higher costs associated with compensation and benefits, facilities and distribution to support sales growth. Our ratio of selling, general and administrative expenses to net sales increased by 20 basis points due to increased near-term costs associated with our investments in facilities and acquisitions.
Current report — wording carried from elsewhere
The higher effective tax rate for the twenty-six weeks ended June 28, 2024 was primarily driven by the non-deductibility of certain compensation-related items.