Founded on food, focused on service.

Transcription

1 Founded on food, focused on service. Q3 FY2016 Earnings Call May 4, 2016

2 Forward Looking Statements This presentation includes, and our response to various questions may include, certain forward looking statements, estimates, and projections with respect to our anticipated future performance, including the statements in the Fiscal 2016 Outlook section of this presentation (collectively, Forward Looking Statements ). Words such as estimates, expects, contemplates, anticipates, projects, plans, intends, believes, forecasts, may, could, should, and variations of such words or similar expressions are intended to identify Forward Looking Statements. Forward Looking Statements reflect various assumptions of the Company s management that may or may not prove to be correct and are not guarantees of the Company s future performance or results. The Company s actual results could differ materially from those anticipated in the Forward Looking Statements. These Forward Looking Statements are subject to various risks and uncertainties, including those described under Risk Factors section in our Prospectus dated October 1, 2015, which was filed with the Securities and Exchange Commission (the SEC ) pursuant to Rule 424(b) of the Securities Act on October 2, 2015, as such factors may be updated from time to time in the Company s periodic filings with the SEC and which are accessible on the SEC s website at The Company is not required and does not intend to update or alter any Forward Looking Statements in this presentation or any other information that may be furnished to any recipient, whether as a result of new information, future events, or otherwise. 1

3 Statement Regarding Non-GAAP Financial Measures This presentation includes several financial measures that are not calculated in accordance with GAAP, including EBITDA, Adjusted EBITDA, Adjusted Cost of Goods Sold, Adjusted Gross Profit, Adjusted Operating Expense, Adjusted Operating Profit, Adjusted Net Income, and Adjusted Diluted Earnings per Share. Such measures are not recognized terms under GAAP, should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP, and are not indicative of net income (loss) as determined under GAAP. EBITDA, Adjusted EBITDA, Adjusted Cost of Goods Sold, Adjusted Gross Profit, Adjusted Operating Expense, Adjusted Operating Profit, Adjusted Net Income, and Adjusted Diluted Earnings per Share and other non-gaap financial measures have limitations that should be considered before using these measures to evaluate the Company s liquidity or financial performance. EBITDA, Adjusted EBITDA, Adjusted Cost of Goods Sold, Adjusted Gross Profit, Adjusted Operating Expense, Adjusted Operating Profit, Adjusted Net Income, and Adjusted Diluted Earnings per Share, as presented, may not be comparable to similarly titled measures of other companies because of varying methods of calculation. 2

4 George Holm Chief Executive Officer

5 Q3 FY2016 Highlights Double-digit Adjusted EBITDA growth 10% - 12% growth range outlook provided Share Gains Strong organic Case growth Expanded Margins Grew independent restaurant case volume by at least 6% over the prior year Continued effective cost management Adjusted EBITDA as a % of Gross Profit grew 60 bps 4

6 Q3 FY2016 Results Case volume growth of 4.1% Net sales increased 3.0% to $3.9 billion Gross profit increased 6.5% to $480.8 million Operating profit increased 38.7% to $37.6 million Net income increased 224.1% to $9.4 million Adjusted EBITDA 1 increased 10.2% to $76.4 million Adj. EBITDA margin, as a % of Gross Profit, expanded 60 bps to 15.9% Adj. diluted EPS increased 36.4% to $0.15 per share 1 For reconciliation of non-gaap to GAAP measures see the Appendix 5

7 First Nine Months FY2016 Results Case volume growth of 4.5% Net sales increased 4.0% to $11.7 billion Gross profit increased 6.7% to $1.4 billion Operating profit increased 26.7% to $135.4 million Net income increased 75.3% to $39.1 million Adj. EBITDA 1 increased 11.4% to $251.9 million Adj. EBITDA margin, as a % of Gross Profit, expanded 80 bps to 17.4% Adj. diluted EPS increased 35.6% to $0.61 per share 1 For reconciliation of non-gaap to GAAP measures see the Appendix 6

8 PFG Customized PFG entered into an agreement to provide distribution solutions to all of Red Lobster s U.S. restaurants Agreement solidifies PFG Customized s position as the premier distributor to full-service chain restaurants Red Lobster will be served from within Customized s existing distribution network Increases Customized s annualized sales by more than $500MM Accretive to Adjusted EBITDA and EPS in FY2017 Accretive to return on invested capital PFG Customized will begin rolling out service to Red Lobster in our fiscal first and second quarters of

9 Q3 FY2016 Segment Results Net Sales EBITDA $ MM $ vs. PY $ MM $ vs. PY Performance Foodservice PFG Customized $2, % $ % (3.2%) % Vistar % % 8

10 Bob Evans Chief Financial Officer

11 Q3 Financial Results $ million, except per share Q3 FY2016 Q3 FY2015 Growth Cases + 4.1% Net Sales $ 3,909.1 $ 3, % Gross Profit % Operating Expense % Operating Profit % Net Income % Diluted EPS $0.09 $ % Adjusted EBITDA % Adj. EBITDA 1 /Gross Profit 15.9% 15.3% 60 bps Adjusted Net Income % Adjusted Diluted EPS 1 $0.15 $ % 1 For reconciliation of non-gaap to GAAP measures see the Appendix 10

12 PFG s Profit Margin Expansion Performance Foodservice: Vistar: Shift mix to Independents and proprietary Performance Brands Penetrate new channels leveraging our existing distribution network Customized: Win new customers to leverage our existing distribution network 20% 16% 12% 8% 4% 0% 15.7% Adj. EBITDA Margin as a % of Gross Profit bps + 80 bps 17.8% 16.6% 17.4% FY2010 FY2015 FY2015 FY2016 YTD 11

13 Q3 Cash Flow and Balance Sheet YTD Cash Flow highlights Operating Cash Flow of $117.6MM vs. 28.4MM PY CapEx of $68.0MM vs. $63.7MM PY Acquisitions of $40.2MM vs. $0.4MM PY Net Debt Q3 FY2015 quarter end: $ 1,494.8MM Q3 FY2016 quarter end: $ 1,203.4MM Improvement vs. PY: $ 291.4MM Net Debt / TTM Adjusted EBITDA 1 leverage Q3 FY 2016 quarter end: 3.4X Q3 FY 2015 quarter end: 4.7X Improvement: 1.3X 1 For reconciliation of non-gaap to GAAP measures see the Appendix 12

14 Asset-Based Lending Facility (ABL) In Q3 FY2016, an amendment to PFG s ABL facility went into effect Upsized the ABL Facility from $1.4 billion to $1.6 billion Lowered interest rate grid for LIBOR based loans by 25 basis points Extended the maturity to February 2021 PFG borrowed $200 million under the ABL facility and repaid $200 million of loans under our second lien term loan facility This payment, plus the lower interest rate grid under the ABL facility, will save PFG cash interest of approximately $9 million over the next 12 months, which is expected to translate into 5 per share after-tax One-time non-cash charge of approximately $5.8 million, or 3 per share, was recognized in the third quarter in interest expense 13

15 Fiscal 2016 Outlook PFG s provides Fiscal 2016 Adjusted EBITDA 1 growth versus PY outlook: 53 vs. 52 weeks: 10% 12% 52 vs. 52 weeks: 8% 10% For fiscal 2016, PFG narrows our outlook to the 10% to 12% range As a reminder, the 53 rd week is worth approximately 2% points of growth for the year and falls in the 4 th quarter 1 For reconciliation of non-gaap to GAAP measures see the Appendix 14

16 15 What we really do is deliver.

17 Non-GAAP Financial Measures PERFORMANCE FOOD GROUP COMPANY Non-GAAP Reconciliation (Unaudited) 16

18 Non-GAAP Financial Measures PERFORMANCE FOOD GROUP COMPANY Non-GAAP Reconciliation (Unaudited) 17

19 Non-GAAP Financial Measures PERFORMANCE FOOD GROUP COMPANY Non-GAAP Reconciliation (Unaudited) 18

20 Non-GAAP Financial Measures PERFORMANCE FOOD GROUP COMPANY Non-GAAP Reconciliation (Unaudited) 19

21 Non-GAAP Financial Measures PERFORMANCE FOOD GROUP COMPANY Non-GAAP Reconciliation (Unaudited) 20

22 Non-GAAP Financial Measures PERFORMANCE FOOD GROUP COMPANY Non-GAAP Reconciliation (Unaudited) A. Includes adjustments for non-cash charges arising from employee stock compensation, changes in fair value of fuel collar instruments, and adjustments to reflect certain assets held for sale to their net realizable value. In addition, this includes an increase of $1.8 million, a decrease $1.9 million, a decrease $0.3 million, and an increase $2.1 million in LIFO reserve for Q1, Q2, Q3 and Q4, respectively. B. Includes professional fees and other costs related to completed and abandoned acquisitions, costs of integrating certain of our facilities, facility closing costs, and advisory fees paid to the Sponsors. C. Consists of a legal settlement. D. Consists primarily of professional fees and related expenses associated with the Winning Together program and other productivity initiatives. E. Includes amounts related to the withdrawal from the Central States Southeast and Southwest Areas Pension Fund. F. Consists primarily of costs related to settlements on our fuel collar derivatives, certain financing transactions, lease amendments, and franchise tax expense and other adjustments permitted under our credit agreements. G. The Adjusted Net Income and Adjusted Diluted Earnings per Share impacts are shown net of tax. Tax impact of adjustments for certain items was $3.1 million, $5.0 million, $5.1 million, and a negative $2.8 million for Q1, Q2, Q3 and Q4, respectively. Amounts are calculated by multiplying the impact of each item by the effective tax rate for the related time period. 21

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