Richmond, Va.-based food producer Performance Food Group (PFG) has posted a new quarterly high in net sales and net earnings for its Q2 ended 29 June 2002.
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Sales for the Q2 2002 amounted to US$1.07bn, up 34% from US$794.8m in the year-earlier period. Net earnings increased 107% to US$22.3m compared with US$10.8m a year ago, and net earnings per share (EPS) for the quarter increased 68% to US$0.47 per share diluted on 36% more shares outstanding compared with US$0.28 per share diluted in the Q2 2001. PFG explained however that net EPS in the Q2 2001 reflected the adoption of the new accounting standards regarding amortisation of intangible assets, and would have been US$0.31 per share, diluted.
Sales for the H1 2002 amounted to US$2.06bn, up 36% from US$1.52bn year on year. Net earnings for the same period increased 107% to US$33m compared with US$16m a year ago. Net EPS year-to-date increased 65% to US$0.71 per share diluted on 38% more shares outstanding compared to US$0.43 per share diluted in the year-earlier period.
C. Michael Gray, president and CEO, remarked, “For the first time in company history, we surpassed a billion dollars in quarterly sales. We are very proud of our results for the Q2 and year-to-date. Our results demonstrate that our growth strategies are proving successful. We achieved solid gains in sales and margins and our internal sales growth of 7.3% this quarter continues to outpace the industry. Inflation was nominal for the Q2. Each of our operating segments contributed to our growth, while acquisitions added an additional 27% to our sales growth this quarter.
“Broadline sales increased 20% as a result of our continued focus on account penetration, expanding our customer base and acquisitions. Our average drop size, as well as sales of our proprietary brands, are increasing, which are having a positive impact on our operating margins. Sales of proprietary brands rose again during the Q2 and now comprise 19% of street sales. Street sales were up 8% for the Q2 and amount to 45% of broadline sales. Our recently completed acquisitions of Quality Foods, Middendorf Meat Company and Thoms-Proestler Co are representative of our strategy to complement our internal growth with strategic acquisitions of other broadliners. We are continuing to pursue additional acquisitions that add value to our business and expand our market coverage.”
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By GlobalDataGray added: “Our customised distribution operation showed continued gains in the Q2, recording a 12% increase in net sales as a result of the growth of customers.”
“The impact of Fresh Express on our overall performance has been decidedly positive,” Gray continued. “The demand for fresh-cut produce is accelerating as consumers continue to seek out convenient and healthy foods.”
Gray concluded: “We are delighted with our performance this year as the growth strategies we have implemented are proving successful. We are also pleased with our recently revised expectations of EPS between US$1.48 to US$1.50 diluted for FY 2002, before the effect of the non-recurring charge for damage at our Springfield, Massachusetts facility which could be as high as US$0.08 to US$0.1 per share diluted.”
