1For reconciliation of non GAAP to GAAP measures, see the Appendix.
Fiscal 2021 will likely prove to be one of the most dynamic, challenging and exciting years in Performance Food Group's (PFG) history. Our organization faced external pressure and an operating backdrop that changed from minute to minute. But our company's dedication to our customers never wavered. We began the fiscal year with depressed levels of sales and profit as recovery from the pandemic was just beginning. However, by the end of the year we were hitting record sales levels - an amazing accomplishment that reflects the passion our associates have for our business and those we serve.
We also made progress on our long-term strategic vision by announcing the acquisition of Core-Mark - one of the country's largest convenience store (c-store) distribution companies. We subsequently closed the transaction on September 1st and expect to be the second largest convenience store distributor in the United States. We are excited to welcome Core-Mark's many talented associates to the PFG family.
While we were successfully building our business and servicing our customers, we took additional steps to move the organization forward. This included publishing PFG's firstEnvironmental, Social and Governance (ESG) report - an important milestone toward improving our company's environmental and social impact. As part of these efforts, we hired our firstVice President of Diversity & Inclusion. PFG is also in the process of setting specific climate goals. These goals will be included in our next ESG report, which will be published by the end of calendar 2021.
Our business segments performed well and finished the year on a high note, achieving over $9.3 billion of net sales in the fiscal fourth quarter, including a 53rd week. This was a record amount for our company.
Our fiscal 2021 financial results include:
Total case volume growth of 15.4%
Net sales increased 21.2 % to $30.4 billion Gross profit improved 22.9% to $3.5 billion Net Income increased 135.7% to $40.7 million EBITDA increased 219.3% to $546.0 million1
Adjusted EBITDA increased 54.2% to $625.3 million1
Diluted Earnings Per Share ("EPS") increased 129.7% to $0.30
Total case volume increased 15.4% in fiscal 2021. Excluding the 53rd week in fiscal 2021, case volume increased 13.0% compared to the prior year. Net sales for fiscal 2021 increased 21.2 % to $30.4 billion. The increase in net sales was primarily attributable to the acquisition of Reinhart and the 53rd week in fiscal 2021, partially offset by the effects of the COVID-19 pandemic.
Gross profit for fiscal 2021 increased 22.9% compared to the prior year, to $3.5 billion. The gross profit increase was led by the acquisition of Reinhart and the 53rd week in fiscal 2021. The acquisition of Reinhart contributed an increase in gross profit of $501.4 million for fiscal 2021, compared to the prior year. Also, gross profit increased due to an increase in gross profit per case driven by case growth in Foodservice, particularly in the independent channel.
ACQUISITIONS & INTEGRATIONS
PFG has been a disciplined and proven acquirer over the past several years with a history of successful integrations. Despite the external challenges brought on by the pandemic, we continued along the path of integrating the Eby-Brown and Reinhart businesses into our organization. I am incredibly pleased with the results. Both Eby-Brown and Reinhart are now integral parts of our organization, thanks to a smooth transition into our company.
In May 2021, we announced an agreement to acquire Core-Mark. We closed the transaction on Septem- ber 1st, adding to PFG's strong c-store distribution platform established with the purchase of Eby-Brown. The deal makes PFG the second largest convenience store distributor in the U.S. with approximately $44 billion in annual pro-forma net sales. This acquisition increases our scale and geographic reach, adding approximately 41,000 additional c-store locations for us to service and to sell our diverse line of products. The transaction also takes PFG into our firstinternational market, Canada. We are excited to bring the outstanding leadership and expertise of Core-Mark to the PFG family of companies.
CONTINUED GROWTH STRATEGY
The COVID-19 pandemic continued to shape the world around us in fiscal 2021. However, PFG marched forward, shaping the future of our company. Our business continues to expand, both organically and through targeted acquisitions. This has resulted in increased scale and operational capabilities, which we have directed at servicing our customers and driving strong financial results. The integration of Reinhart progressed smoothly and the results from that transaction consistently exceed our expectations. The team is now working hard to integrate Core-Mark, which we believe is an important step in our strategic vision.
We continue to accelerate our ESG efforts and aim to be a leader in our industry on environmental, social and governance topics. All of these achievements could not have been possible without the hard work of our associates and support from stakeholders. We believe we have exited fiscal 2021 stronger than we were 12 months ago and are excited for all that is in store for the year ahead.
George L. Holm
Chairman, President and CEO
October 7, 2021
For the fiscal year ended July 3, 2021
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-37578
Performance Food Group Company
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization)
12500 West Creek Parkway
Richmond, Virginia 23238
(Address of principal executive offices, including zip code)
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
Common Stock, $0.01 par value
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
Smaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of theSarbanes-OxleyAct (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
At December 26, 2020, the last business day of the Registrant's most recently completed second fiscal quarter, the aggregate market value of common stock held bynon-affiliateswas $5,155,406,560 (based on the closing sale price of common stock on such date on the New York Stock Exchange).
134,043,336 shares of common stock were outstanding as of August 11, 2021.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Schedule 14A relating to the Registrant's Annual Meeting of Stockholders, to be held on or about November 16, 2021, are incorporated by reference in response to Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K. The definitive proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the Registrant's fiscal year ended July 3, 2021.
TABLE OF CONTENTS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS .................................................................................
In addition to historical information, this Annual Report on Form 10-K(this "Form10-K")may contain"forward-lookingstatements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are subject to the "safe harbor" created by those sections. All statements, other than statements of historical facts included in this Form 10-K, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, our results of operations, financial position, our business outlook, business trends and other information, and our proposed acquisition of Core-Mark Holding Company, Inc. (the "ProposedCore-MarkAcquisition") are forward-lookingstatements. Words such as "estimates," "expects," "contemplates," "will," "anticipates," "projects," "plans," "intends," "believes," "forecasts," "may," "should" and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, estimates and projections will result or be achieved, and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.
There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-K. Such risks, uncertainties and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth under Part I, Item 1A. Risk Factors in this Form 10-K, as such risk factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the "SEC"), and are accessible on the SEC's website atwww.sec.gov, and also include the following:
the material adverse impact the novel coronavirus ("COVID-19") pandemic has had, and is expected to continue to have, on the global markets, the restaurant industry, and our business specifically, including the effects on vehicle miles driven, on the financial health of our business partners, on supply chains, and on financial and capital markets;
competition in our industry is intense, and we may not be able to compete successfully;
we operate in a low margin industry, which could increase the volatility of our results of operations;
we may not realize anticipated benefits from our operating cost reduction and productivity improvement efforts;
our profitability is directly affected by cost inflation and deflation and other factors;
we do not have long-term contracts with certain of our customers;
group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations;
changes in eating habits of consumers;
extreme weather conditions, including earthquake and natural disaster damage;
our reliance on third-party suppliers;
labor relations and cost risks and availability of qualified labor;
volatility of fuel and other transportation costs;
inability to adjust cost structure where one or more of our competitors successfully implement lower costs;
we may be unable to increase our sales in the highest margin portion of our business;
changes in pricing practices of our suppliers;
our growth strategy may not achieve the anticipated results;
risks relating to acquisitions, including the risk that we are not able to realize benefits of acquisitions or successfully integrate the businesses we acquire;
environmental, health, and safety costs;
the risk that we fail to comply with requirements imposed by applicable law or government regulations or substantial changes to governmental regulations, including increased regulation of electronic cigarette and other alternative nicotine products;
PFG - Performance Food Group Company published this content on 06 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 October 2021 08:11:06 UTC.