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May 1, 2002

USA: Performance Food Group Reports 114% increase in Q1 operating profit

Richmond-based Performance Food Group, which markets and distributes more than 44,000 national and private label food and food-related products, has announced a new quarterly high in net sales and net earnings for the three months ended 30 March 2002. Sales for Q1 2002 increased 38% to US$996.9m year on year. Net earnings for Q1 increased 107% to US$10.8m compared with US$5.2m a year ago. Net earnings per share for Q1 increased 71% to US$0.24 on 21% more shares outstanding.

Richmond-based Performance Food Group, which markets and distributes more than 44,000 national and private label food and food-related products, has announced a new quarterly high in net sales and net earnings for the three months ended 30 March 2002.

Sales for Q1 2002 increased 38% to US$996.9m year on year. Net earnings for Q1 increased 107% to US$10.8m compared with US$5.2m a year ago. Net earnings per share for Q1 increased 71% to US$0.24 on 21% more shares outstanding.

C. Michael Gray, president and CEO, remarked: “The Q1 gains reinforce our confidence about extending our record of growth in 2002. We are especially pleased that our internal growth of 10% significantly outpaced the industry. Acquisitions added the additional 28% of our sales growth.

“Each of our operating units contributed to our growth. Broadline sales increased 25% as a result of increasing our penetration with existing accounts, expanding our customer base and the acquisitions of Springfield Foodservice and Empire Seafood.

“Operating margins are benefiting from higher sales of our proprietary foodservice products and increasing sales to street customers.

“The announcement earlier this month of our agreement to acquire Quality Foods continues our strategy of complementing our internal growth through acquisitions of other broadliners.”

“The most significant factor driving the year-to-year growth in sales for the Q1 was the addition of Fresh Express,” Gray continued. “The increasing popularity of fresh-cut produce and the trend toward convenient, health-conscious foods continues to drive growth in this segment.”

Gray concluded: “A key element of our strategy is to maintain a strong balance sheet. We finished the quarter with a debt-to-capital ratio of 30%, excluding cash of approximately US$91m, which will allow us to continue to invest in our business and take advantage of additional growth opportunities.”  

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