- Net sales increased 30% to new quarterly high of $693.1 million.
- Net earnings rose to $8.3 million.
- Third-quarter net earnings reached record of $0.57 per share diluted.
Performance Food Group (Nasdaq/NM:PFGC) yesterday announced that net earnings per share for the third quarter increased 21% to $0.57 per share diluted compared with net earnings of $0.47 per share diluted in the year-earlier quarter, excluding an after-tax gain of $0.03 per share diluted from the sale of an investment. Net earnings for the quarter totaled $8.3 million, up 22% from $6.8 million a year ago, excluding the investment gain. Net sales for the three months amounted to $693.1 million, up 30% from $534.6 million in the year-earlier period.
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Net earnings per share for the first nine months of 2000 increased to $1.31 per share diluted compared with pro forma net earnings of $1.08 per share diluted in the first nine months of 1999. Pro forma adjustments in the first nine months of 1999 included the exclusion of nonrecurring merger expenses, the effect of the change in tax status for NorthCenter Foodservice from an S-corporation to a C-corporation, and the gain from the sale of an investment.
The Company indicated that net earnings, excluding goodwill amortization, amounted to $0.61 per share diluted for the third quarter, up 20% from a year ago, excluding nonrecurring gains, and nine-month earnings per share on the same basis totaled $1.42 per share diluted, up 23% from the year-earlier period.
Robert C. Sledd, chairman and chief executive officer, remarked, “The gains for the third quarter added to the growth recorded during the first half, resulting in solid increases in sales and earnings for the year to date. Our exceptional sales growth this year is attributable almost entirely to internal gains. We expect to end the year on a strong note based on results and trends to date, and we expect to meet analyst estimates for the fourth quarter. The anticipated gains in the fourth quarter will result in 2000 being a year of outstanding progress and our sixth consecutive year of record net sales and net earnings.”
Sledd said, “Our broadline business has contributed significantly to our growth in each quarter this year. The 24% increase in net sales for the third quarter for this segment of our business reflects our ongoing success in increasing sales to independent restaurant operators. Our growth this year has also been positively impacted by the selective addition of certain multi-unit restaurant chains. A related, and very important, dimension of our success in broadline is the development of signature brands that offer customers compelling value.
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By GlobalData“Our customized operations recorded a 37% gain in net sales for the quarter. We now have the capability to service customers in 49 states through our five distribution centers. Work is underway on a new distribution center in Maryland that will replace the leased facility that we have outgrown. Success in this area of our business demands a close working partnership with customers. We are confident about the growth potential in customized foodservice distribution and are also dedicated to supporting the expansion plans of our current customers.”
Sledd added, “Our fresh-cut produce division has successfully completed the integration of the Dixon acquisition and expanded its capacity with new facilities in Atlanta and Dallas. Fresh-cut produce remains one of the fastest growing categories in the food industry, and we have very clear opportunities to leverage our core products into new product offerings. During the third quarter, we entered the final phase of development for pre-sliced tomatoes, a new, high quality product that will involve an automated production process that will bring significant value to customers. Much of our success in this area has come from an eagerness to pursue new opportunities, and we are excited about the strong potential of this latest new product.
“A key initiative for us is to link our various operations much more closely to ensure the sharing of best practices and to capitalize on our position as one of the nation’s largest foodservice distributors. An important dimension of that effort is the development of a comprehensive information system that is planned to be installed in all of our broadline distribution facilities in early 2001. We are confident these initiatives will translate into a meaningful increase in our operating margins over the next few years.”
Performance Food Group markets and distributes more than 25,000 national and private label food and food-related products to approximately 25,000 restaurants, hotels, cafeterias, schools, healthcare facilities and other institutions. For more information on Performance Food Group, visit www.pfgc.com.
Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They include statements regarding anticipated earnings for the balance of the year, sales momentum, customer and product sales mix, expected efficiencies in the Company’s business and the ability of Performance Food Group to realize expected synergies following acquisitions. These statements involve risks and uncertainties and are based on current expectations and management’s estimates; actual results may differ materially. The risks and uncertainties which could impact these statements include, but are not limited to, the relatively low margins and economic sensitivity of the foodservice business, thee Company’s reliance on major customers, the ability to identify and successfully complete acquisitions of other foodservice distributors and management of the Company’s planned growth, all as detailed from time to time in the reports filed by the Company with the Securities and Exchange Commission.
PERFORMANCE FOOD GROUP COMPANY
Unaudited Financial Highlights
Three Months Ended
------------------------------
Sept. 30, Oct. 2,
2000 1999
------------- --------------
Net sales $ 693,127,000 $ 534,583,000
Net earnings $ 8,329,000 $ 7,236,000
Net earnings per share:
Basic $ 0.60 $ 0.52
Diluted $ 0.57 $ 0.50
Pro forma net earnings per share(1)(2):
Basic $ 0.60 $ 0.49
Diluted $ 0.57 $ 0.47
Weighted average number of shares
outstanding:
Basic 13,983,000 13,911,000
Diluted 14,697,000 14,368,000
Nine Months Ended
------------------------------
Sept. 30, Oct. 2,
2000 1999
-------------- --------------
Net sales $1,927,480,000 $1,502,921,000
Net earnings $ 18,933,000 $ 13,317,000
Net earnings per share:
Basic $ 1.36 $ 0.97
Diluted $ 1.31 $ 0.94
Pro forma net earnings per share(1)(2):
Basic $ 1.36 $ 1.12
Diluted $ 1.31 $ 1.08
Weighted average number of shares
outstanding:
Basic 13,948,000 13,659,000
Diluted 14,487,000 14,125,000
(1) Pro forma adjustments to net earnings per common share add
back nonrecurring merger expenses and adjust income taxes as if
NorthCenter Foodservice was taxed as a C-corporation for income tax
purposes rather than as an S-corporation prior to the merger of
NorthCenter Foodservice in February 1999.
(2) The three and nine months ended Oct. 2, 1999 also excludes a
nonrecurring gain of $768,000 on the sale of an investment.
Performance Food Group Company
Condensed Consolidated Balance Sheet and Income Statement
September 30, 2000
(In thousands, except net earnings per common share)
Sept. 30, 2000 Jan. 1, 2000
-------------- ------------
Assets
Cash $ 9,607 $ 5,606
Accounts receivable, net 150,687 119,126
Inventory 120,751 108,550
Other current assets 9,595 9,600
-------- --------
Total current assets 290,640 242,882
-------- --------
Property, plant and
equipment, net 125,915 113,930
Intangible assets, net 111,235 103,328
Other assets 1,436 1,905
-------- --------
Total assets $529,226 $462,045
======== ========
Liabilities and Shareholders' Equity
Outstanding checks in excess
of deposits $ 27,009 $ 14,082
Current portion of long-term debt 701 703
Accounts payable 131,477 116,821
Other current liabilities 44,190 40,397
-------- --------
Total current liabilities 203,377 172,003
-------- --------
Notes payable 110,430 92,404
Deferred income taxes 8,391 8,294
Shareholders' equity 207,028 189,344
-------- --------
Total liabilities and
shareholders' equity $529,226 $462,045
======== ========
Three Months Ended
Sept. 30, 2000 Oct. 2, 1999
-------------------------------------------
Net sales $ 693,127 100.0% $ 534,583 100.0%
Cost of goods sold 599,904 86.6% 460,208 86.1%
-------------------------------------------
Gross profit 93,223 13.4% 74,375 13.9%
Operating expenses 78,084 11.2% 62,266 11.6%
-------------------------------------------
Operating profit 15,139 2.2% 12,109 2.3%
Other income (expense):
Interest expense (1,716) (1,299)
Nonrecurring merger
expenses - -
Other, net 10 862
-------------------------------------------
Other expense, net (1,706) -0.2% (437) -0.1%
-------------------------------------------
Earnings before
income taxes 13,433 2.0% 11,672 2.2%
Income taxes 5,104 0.8% 4,436 0.8%
-------------------------------------------
Net earnings $ 8,329 1.2% $ 7,236 1.4%
===========================================
Weighted average common
shares outstanding 13,983 13,911
===========================================
Basic net earnings per
common share $ 0.60 $ 0.52
===========================================
Weighted average common
shares and common share
equivalents outstanding 14,697 14,368
===========================================
Diluted net earnings per
common share $ 0.57 $ 0.50
===========================================
Pro forma basic net
earnings per common
share(1)(2) $ 0.60 $ 0.49
===========================================
Pro forma diluted net
earnings per common
share(1)(2) $ 0.57 $ 0.47
===========================================
Nine Months Ended
Sept. 30, 2000 Oct. 2, 1999
-------------------------------------------
Net sales $ 1,927,480 100.0% $1,502,921 100.0%
Cost of goods sold 1,669,869 86.6% 1,297,698 86.3%
-------------------------------------------
Gross profit 257,611 13.4% 205,223 13.7%
Operating expenses 222,520 11.6% 176,758 11.8%
-------------------------------------------
Operating profit 35,091 1.8% 28,465 1.9%
Other income (expense):
Interest expense (4,604) (3,942)
Nonrecurring merger
expenses - (3,812)
Other, net 50 966
-------------------------------------------
Other expense, net (4,554) -0.2% (6,788) -0.5%
-------------------------------------------
Earnings before
income taxes 30,537 1.6% 21,677 1.4%
Income taxes 11,604 0.6% 8,360 0.5%
-------------------------------------------
Net earnings $ 18,933 1.0% $ 13,317 0.9%
===========================================
Weighted average common
shares outstanding 13,948 13,659
===========================================
Basic net earnings per
common share $ 1.36 $ 0.97
===========================================
Weighted average common
shares and common share
equivalents outstanding 14,487 14,125
===========================================
Diluted net earnings per
common share $ 1.31 $ 0.94
===========================================
Pro forma basic net
earnings per common
share(1)(2) $ 1.36 $ 1.12
===========================================
Pro forma diluted net
earnings per common
share(1)(2) $ 1.31 $ 1.08
===========================================
(1) Pro forma adjustments to net earnings per common share add
back nonrecurring merger expenses and adjust income taxes as if
NorthCenter Foodservice was taxed as a C-corporation for income tax
purposes rather than as an S-corporation prior to the merger of
NorthCenter Foodservice in February 1999.
(2) The three and nine months ended Oct. 2, 1999 also excludes a
gain of $768,000 on the sale of an investment.
