NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Amounts in thousands, except share and per share amounts)
Note 1 - Operations and Basis of Presentation
Description of Business and Basis of Presentation
The financial statements include the consolidated accounts of The Chefs’ Warehouse, Inc. (the “Company”), and its wholly-owned subsidiaries. The Company’s quarterly periods end on the thirteenth Friday of each quarter. Fiscal 2022 will include a fourteenth week in the fourth quarter. Every six to seven years, the Company will add a fourteenth week to its fourth quarter to more closely align its year-end to the calendar year. The Company’s business consists of three operating segments: East Coast, Midwest and West Coast that aggregate into one reportable segment, foodservice distribution, which is concentrated primarily in the United States. The Company’s customer base consists primarily of menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos, specialty food stores, grocers and warehouse clubs.
Consolidation
The consolidated financial statements include all the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Unaudited Interim Financial Statements
The accompanying unaudited consolidated financial statements and the related interim information contained within the notes to such unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules of the Securities and Exchange Commission (“SEC”) for interim information and quarterly reports on Form 10-Q. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. These unaudited consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 24, 2021 filed as part of the Company’s Annual Report on Form 10-K, as filed with the SEC on February 22, 2022.
The unaudited consolidated financial statements appearing in this Form 10-Q have been prepared on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 22, 2022, and in the opinion of management, include all normal recurring adjustments that are necessary for the fair statement of the Company’s interim period results. The year-end consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by GAAP. Due to seasonal fluctuations, the COVID-19 pandemic and other factors, the results of operations for the thirteen and twenty-six weeks ended June 24, 2022 are not necessarily indicative of the results to be expected for the full year.
The preparation of financial statements in conformity with GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from management’s estimates.
Note 2 – Summary of Significant Accounting Policies
Revenue Recognition
Revenues from product sales are recognized at the point at which control of each product is transferred to the customer. The Company’s contracts contain performance obligations which are satisfied when customers have physical possession of each product. The majority of customer orders are fulfilled within a day and customer payment terms are typically 14 to 60 days from delivery. Shipping and handling activities are costs to fulfill the Company’s performance obligations. These costs are expensed as incurred and presented within selling, general and administrative expenses on the consolidated statements of operations. The Company offers certain sales incentives to customers in the form of rebates or discounts. These sales incentives are accounted as variable consideration. The Company estimates these amounts based on the expected amount to be provided to customers and records a corresponding reduction in revenue. The Company does not expect a significant reversal in the amount of cumulative revenue recognized. Sales tax billed to customers is not included in revenue but rather recorded as a liability owed to the respective taxing authorities at the time the sale is recognized.
The following table presents the Company’s net sales disaggregated by principal product category:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Thirteen Weeks Ended | | Twenty-Six Weeks Ended |
| June 24, 2022 | | June 25, 2021 | | June 24, 2022 | | June 25, 2021 |
Center-of-the-Plate | $ | 284,286 | | | 43.9 | % | | $ | 215,089 | | | 50.9 | % | | $ | 523,062 | | | 45.1 | % | | $ | 354,934 | | | 50.5 | % |
Dry Goods | 103,597 | | | 16.0 | % | | 57,117 | | | 13.5 | % | | 182,112 | | | 15.7 | % | | 96,897 | | | 13.8 | % |
Pastry | 76,320 | | | 11.8 | % | | 41,312 | | | 9.8 | % | | 134,071 | | | 11.6 | % | | 70,110 | | | 10.0 | % |
Cheese and Charcuterie | 59,109 | | | 9.1 | % | | 34,303 | | | 8.1 | % | | 102,597 | | | 8.8 | % | | 57,402 | | | 8.2 | % |
Produce | 37,214 | | | 5.7 | % | | 30,558 | | | 7.2 | % | | 65,111 | | | 5.6 | % | | 51,149 | | | 7.3 | % |
Dairy and Eggs | 39,846 | | | 6.1 | % | | 18,902 | | | 4.5 | % | | 69,266 | | | 6.0 | % | | 31,483 | | | 4.5 | % |
Oils and Vinegars | 31,517 | | | 4.9 | % | | 16,881 | | | 4.0 | % | | 55,604 | | | 4.8 | % | | 26,355 | | | 3.7 | % |
Kitchen Supplies | 16,215 | | | 2.5 | % | | 8,806 | | | 2.0 | % | | 28,384 | | | 2.4 | % | | 14,855 | | | 2.0 | % |
Total | $ | 648,104 | | | 100 | % | | $ | 422,968 | | | 100 | % | | $ | 1,160,207 | | | 100 | % | | $ | 703,185 | | | 100 | % |
The Company determines its product category classification based on how the Company currently markets its products to its customers. The Company’s definition of its principal product categories may differ from the way in which other companies present similar information.
Food Processing Costs
Food processing costs include but are not limited to direct labor and benefits, applicable overhead and depreciation of equipment and facilities used in food processing activities. Food processing costs included in cost of sales were $9,398 and $6,679 for the thirteen weeks ended June 24, 2022 and June 25, 2021, respectively, and $18,434 and $12,075 for the twenty-six weeks ended June 24, 2022 and June 25, 2021, respectively.
Note 3 – Net Income (Loss) per Share
The following table sets forth the computation of basic and diluted net income (loss) per common share:
| | | | | | | | | | | | | | | | | | | | | | | |
| Thirteen Weeks Ended | | Twenty-Six Weeks Ended |
| June 24, 2022 | | June 25, 2021 | | June 24, 2022 | | June 25, 2021 |
Net income (loss) per share: | | | | | | | |
Basic | $ | 0.46 | | | $ | 0.03 | | | $ | 0.49 | | | $ | (0.46) | |
Diluted | $ | 0.42 | | | $ | 0.03 | | | $ | 0.47 | | | $ | (0.46) | |
Weighted average common shares: | | | | | | | |
Basic | 37,100,968 | | | 36,831,054 | | | 37,018,044 | | | 36,615,463 | |
Diluted | 42,053,453 | | | 37,081,186 | | | 41,896,379 | | | 36,615,463 | |
Reconciliation of net income (loss) per common share:
| | | | | | | | | | | | | | | | | | | | | | | |
| Thirteen Weeks Ended | | Twenty-Six Weeks Ended |
| June 24, 2022 | | June 25, 2021 | | June 24, 2022 | | June 25, 2021 |
Numerator: | | | | | | | |
Net income (loss) | $ | 16,915 | | | $ | 1,098 | | | $ | 18,300 | | | $ | (16,823) | |
Add effect of dilutive securities | | | | | | | |
Interest on convertible notes, net of tax | 719 | | | — | | | 1,365 | | | — | |
Net income (loss) available to common shareholders | $ | 17,634 | | | $ | 1,098 | | | $ | 19,665 | | | $ | (16,823) | |
Denominator: | | | | | | | |
Weighted average basic common shares outstanding | 37,100,968 | | | 36,831,054 | | | 37,018,044 | | | 36,615,463 | |
Dilutive effect of unvested common shares | 263,071 | | | 250,132 | | | 296,538 | | | — | |
Dilutive effect of stock options and warrants | 73,381 | | | — | | | 56,817 | | | — | |
Dilutive effect of convertible notes | 4,616,033 | | | — | | | 4,524,980 | | | — | |
Weighted average diluted common shares outstanding | 42,053,453 | | | 37,081,186 | | | 41,896,379 | | | 36,615,463 | |
Potentially dilutive securities that have been excluded from the calculation of diluted net income (loss) per common share because the effect is anti-dilutive are as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Thirteen Weeks Ended | | Twenty-Six Weeks Ended |
| June 24, 2022 | | June 25, 2021 | | June 24, 2022 | | June 25, 2021 |
Restricted share awards (“RSAs”) | 106,571 | | | — | | | 83,001 | | | 349,389 | |
Stock options and warrants | — | | | 103,226 | | | — | | | 91,779 | |
Convertible notes | — | | | 4,616,033 | | | 91,053 | | | 4,205,246 | |
Note 4 – Fair Value Measurements
Assets and Liabilities Measured at Fair Value
The Company’s contingent earn-out liabilities are measured at fair value. These liabilities were estimated using Level 3 inputs. Long-term earn-out liabilities were $2,793 and $3,252 as of June 24, 2022 and December 24, 2021, respectively, and are reflected as other liabilities and deferred credits on the consolidated balance sheets. The remaining short-term earn-out liabilities are reflected as accrued liabilities on the consolidated balance sheets. The fair value of contingent consideration was determined based on a probability-based approach which includes projected results, percentage probability of occurrence and the application of a discount rate to present value the payments. A significant change in projected results, discount rate, or probabilities of occurrence could result in a significantly higher or lower fair value measurement.
Changes in the fair value of contingent earn-out liabilities are reflected in other operating expenses (income), net on the consolidated statements of operations.
The following table presents the changes in Level 3 contingent earn-out liabilities:
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Total |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Balance December 24, 2021 | | | | | | | | | | | $ | 6,877 | |
Acquisition value | | | | | | | | | | | 1,200 | |
| | | | | | | | | | | |
Cash payments | | | | | | | | | | | (2,000) | |
Changes in fair value | | | | | | | | | | | 3,628 | |
Balance June 24, 2022 | | | | | | | | | | | $ | 9,705 | |
Fair Value of Financial Instruments
The following table presents the carrying value and fair value of the Company’s convertible notes. In estimating the fair value of the convertible notes, the Company utilized Level 3 inputs including prevailing market interest rates to estimate the debt portion of the instrument and a Black Scholes valuation model to estimate the fair value of the conversion option. The Black Scholes model utilizes the market price of the Company’s common stock, estimates of the stock’s volatility and the prevailing risk-free interest rate in calculating the fair value estimate.
| | | | | | | | | | | | | | | | | | | | | | | |
| June 24, 2022 | | December 24, 2021 |
| Carrying Value | | Fair Value | | Carrying Value | | Fair Value |
Convertible Senior Notes | $ | 200,000 | | | $ | 223,854 | | | $ | 200,000 | | | $ | 206,182 | |
Convertible Unsecured Note | $ | 4,000 | | | $ | 4,474 | | | $ | 4,000 | | | $ | 4,102 | |
Note 5 – Acquisitions
During the second quarter of fiscal 2022, the Company completed two acquisitions for an aggregate purchase price of approximately $22,500, paid in cash, subject to customary working capital adjustments. The Company will also pay additional contingent consideration, if earned, in the form of earn-out amounts which could total $2,000 in the aggregate. The Company is in the process of finalizing a valuation of the tangible and intangible assets as of the acquisition date. When applicable, these valuations require the use of Level 3 inputs. Goodwill of $3,947 will be amortized over 15 years for tax purposes.
Capital Seaboard
On December 28, 2021, pursuant to an asset purchase agreement, the Company acquired substantially all of the assets of CGC Holdings, Inc. (“Capital Seaboard”), a specialty seafood and produce distributor in Maryland. The purchase price was approximately $31,036, consisting of $28,000 paid in cash at closing, common stock warrants valued at $1,701, and $1,335 paid upon settlement of a net working capital true-up. The Company is in the process of finalizing a valuation of tangible and intangible assets of Capital Seaboard as of the acquisition date. When applicable, these valuations require the use of Level 3 inputs. Goodwill for the Capital Seaboard acquisition will be amortized over 15 years for tax purposes. The goodwill recorded primarily reflects the value of acquiring an established specialty seafood and produce distributor to leverage the Company’s existing products in the markets served by Capital Seaboard, to supply Capital Seaboard’s product offerings to our East Coast markets and any intangible assets that do not qualify for separate recognition.
The Company reflected net sales and income before taxes in its consolidated statement of operations related to the Capital Seaboard acquisition as follows:
| | | | | | | | | | | | | | | | | |
| Thirteen Weeks Ended | | Twenty-Six Weeks Ended |
| June 24, 2022 | | | | June 24, 2022 | | |
Net sales | $ | 38,671 | | | | | $ | 70,353 | | | |
Income before income taxes | $ | 1,759 | | | | | $ | 2,892 | | | |
The table below presents unaudited pro forma consolidated income statement information of the Company as if the acquisitions had occurred on December 26, 2020. The pro forma results were prepared from financial information obtained from the sellers of the business, as well as information obtained during the due diligence process associated with the acquisitions. The pro forma information is not necessarily indicative of the Company’s results of operations had the acquisitions been completed on the above date, nor is it necessarily indicative of the Company’s future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisitions, any incremental costs for transitioning to become a public company, and also does not reflect additional revenue opportunities following the acquisitions. The pro forma information reflects amortization and depreciation of the acquisitions at their respective fair values.
| | | | | | | | | | | | | | | | | | | | | | | |
| Thirteen Weeks Ended | | Twenty-Six Weeks Ended |
| June 24, 2022 | | June 25, 2021 | | June 24, 2022 | | June 25, 2021 |
Net sales | $ | 667,413 | | | $ | 477,733 | | | $ | 1,179,516 | | | $ | 801,188 | |
Income (loss) before income taxes | $ | 23,169 | | | $ | 1,077 | | | $ | 25,068 | | | $ | (24,450) | |
The table below sets forth the preliminary purchase price allocation for these acquisitions:
| | | | | | | | | | |
| | | Capital Seaboard | Other Acquisitions |
Current assets | | | $ | 10,130 | | $ | 8,834 | |
Customer relationships | | | 7,250 | | 10,410 | |
Trademarks | | | 2,280 | | 620 | |
| | | | |
Goodwill | | | 8,334 | | 8,537 | |
Fixed assets | | | 9,552 | | 197 | |
Other assets | | | 122 | | 17 | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Current liabilities | | | (6,632) | | (4,915) | |
Earn-out liability | | | — | | (1,200) | |
| | | | |
Issuance of warrants | | | (1,701) | | — | |
| | | | |
Total cash consideration | | | $ | 29,335 | | $ | 22,500 | |
The Company recognized professional fees of $1,019 in operating expenses related to acquisition related activities in the second quarter of fiscal 2022.
Note 6 – Inventories
Inventories consist primarily of finished product and are reflected net of adjustments for shrinkage, excess and obsolescence totaling $9,315 and $8,312 at June 24, 2022 and December 24, 2021, respectively.
Note 7 – Equipment, Leasehold Improvements and Software
Equipment, leasehold improvements and software as of June 24, 2022 and December 24, 2021 consisted of the following:
| | | | | | | | | | | | | | | | | | | | |
| | | | |
| | Useful Lives | | June 24, 2022 | | December 24, 2021 |
Land | | Indefinite | | $ | 5,542 | | | $ | 5,020 | |
Buildings | | 20 years | | 23,443 | | | 18,406 | |
Machinery and equipment | | 5 - 10 years | | 30,067 | | | 28,099 | |
Computers, data processing and other equipment | | 3 - 7 years | | 16,386 | | | 15,480 | |
Software | | 3 - 7 years | | 40,098 | | | 39,799 | |
Leasehold improvements | | 1 - 40 years | | 92,552 | | | 69,105 | |
Furniture and fixtures | | 7 years | | 3,671 | | | 3,582 | |
Vehicles | | 5 - 10 years | | 28,007 | | | 29,632 | |
| | | | | | |
Construction-in-process | | | | 23,870 | | | 24,355 | |
| | | | 263,636 | | | 233,478 | |
Less: accumulated depreciation and amortization | | | | (108,072) | | | (99,856) | |
Equipment, leasehold improvements and software, net | | | | $ | 155,564 | | | $ | 133,622 | |
Construction-in-process at June 24, 2022 related primarily to the implementation of the Company’s Enterprise Resource Planning (“ERP”) system and the build-out of the Company’s Miami distribution facility and at December 24, 2021 related primarily to the build-outs of the Company’s Miami and Los Angeles distribution facilities. The net book value of equipment financed under finance leases at June 24, 2022 and December 24, 2021 was $9,774 and $10,874, respectively.
The components of depreciation and amortization expense were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Thirteen Weeks Ended | | Twenty-Six Weeks Ended |
| June 24, 2022 | | June 25, 2021 | | June 24, 2022 | | June 25, 2021 |
Depreciation expense | $ | 4,385 | | | $ | 3,841 | | | $ | 8,800 | | | $ | 7,776 | |
Software amortization | $ | 1,481 | | | $ | 1,712 | | | $ | 2,955 | | | $ | 2,884 | |
| $ | 5,866 | | | $ | 5,553 | | | $ | 11,755 | | | $ | 10,660 | |
Note 8 – Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill are presented as follows:
| | | | | |
| |
| |
| |
| |
Carrying amount as of December 24, 2021 | $ | 221,775 | |
Goodwill adjustments (1) | (792) | |
Acquisitions | 16,871 | |
Foreign currency translation | (66) | |
Carrying amount as of June 24, 2022 | $ | 237,788 | |
(1) The goodwill adjustments represent measurement period adjustments related to certain acquisitions completed in the prior year.
Other intangible assets as of June 24, 2022 and December 24, 2021 consisted of the following:
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June 24, 2022 | | Weighted-Average Remaining Amortization Period | | Gross Carrying Amount | | Accumulated Amortization | | Net Amount |
Customer relationships | | 120 months | | $ | 173,387 | | | $ | (79,952) | | | $ | 93,435 | |
Non-compete agreements | | 20 months | | 8,579 | | | (8,151) | | | 428 | |
Trademarks | | 163 months | | 39,407 | | | (14,744) | | | 24,663 | |
Total | | | | $ | 221,373 | | | $ | (102,847) | | | $ | 118,526 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
December 24, 2021 | | Weighted-Average Remaining Amortization Period | | Gross Carrying Amount | | Accumulated Amortization | | Net Amount |
Customer relationships | | 120 months | | $ | 155,678 | | | $ | (74,644) | | | $ | 81,034 | |
Non-compete agreements | | 26 months | | 8,579 | | | (8,018) | | | 561 | |
Trademarks | | 179 months | | 36,514 | | | (13,366) | | | 23,148 | |
Total | | | | $ | 200,771 | | | $ | (96,028) | | | $ | 104,743 | |
Amortization expense for other intangibles was $3,463 and $3,104 for the thirteen weeks ended June 24, 2022 and June 25, 2021, respectively, and $6,819 and $6,643 for the twenty-six weeks ended June 24, 2022 and June 25, 2021, respectively.
Estimated amortization expense for other intangible assets for the remainder of the fiscal year ending December 30, 2022 and each of the next four fiscal years and thereafter is as follows:
| | | | | |
2022 | $ | 6,784 | |
2023 | 13,058 | |
2024 | 12,200 | |
2025 | 11,784 | |
2026 | 11,784 | |
Thereafter | 62,916 | |
Total | $ | 118,526 | |
Note 9 – Debt Obligations
Debt obligations as of June 24, 2022 and December 24, 2021 consisted of the following:
| | | | | | | | | | | | | | |
| | June 24, 2022 | | December 24, 2021 |
Senior secured term loans | | $ | 167,819 | | | $ | 168,675 | |
Convertible senior notes | | 200,000 | | | 200,000 | |
Asset-based loan facility | | 20,000 | | | 20,000 | |
Finance lease and other financing obligations | | 10,201 | | | 11,602 | |
Convertible unsecured note | | 4,000 | | | 4,000 | |
| | | | |
| | | | |
Deferred finance fees and original issue premium (discount) | | (4,197) | | | (4,976) | |
Total debt obligations | | 397,823 | | | 399,301 | |
Less: current installments | | (4,843) | | | (5,141) | |
Total debt obligations excluding current installments | | $ | 392,980 | | | $ | 394,160 | |
On March 11, 2022, the Company entered into a third amendment to its asset-based loan facility (“ABL Facility”) which increased the aggregate commitments from $150,000 to $200,000. The interest rate charged on borrowings under the ABL Facility is equal to a spread plus, at the Company’s option, either the Base Rate (as defined in the ABL Credit Agreement) or a forward-looking term rate based on the secured overnight financing rate term (except for swingline loans) for one-, three-, or six-month interest periods chosen by the Company. The ABL Facility matures on March 11, 2027 subject to a springing maturity date of March 24, 2025 should the Company’s term loan not have been extended to at least March 11, 2027 or March 24, 2024 if the Company’s 1.875% Convertible Senior Notes due 2024 in an aggregate principal amount in excess of $40,000 remain outstanding having a maturity date not earlier than six months after March 11, 2027.
The ABL Credit Agreement contains customary affirmative covenants, negative covenants and events of default as more particularly described in the ABL Credit Agreement. The Company is required to comply with a minimum consolidated fixed charge coverage ratio of 1:1 if the amount of availability under the ABL Facility falls below $14,000, or 10%, of the lesser of the aggregate commitments and the borrowing base then in effect.
The third amendment was accounted for as a debt modification. The Company incurred transaction costs of $406 which were capitalized as deferred financing fees, presented in other assets on the Company’s consolidated balance sheets, to be amortized over the term of the ABL Facility.
The net carry value of the Company’s Convertible Senior Notes as of June 24, 2022 and December 24, 2021 was:
| | | | | | | | | | | | | | |
| | June 24, 2022 | | December 24, 2021 |
Principal amount outstanding | | $ | 200,000 | | | $ | 200,000 | |
Unamortized deferred financing fees and premium | | (2,238) | | | (2,686) | |
Net carry value | | $ | 197,762 | | | $ | 197,314 | |
The components of interest expense on the Company’s Convertible Senior Notes were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Thirteen Weeks Ended | | Twenty-Six Weeks Ended |
| June 24, 2022 | | June 25, 2021 | | June 24, 2022 | | June 25, 2021 |
Coupon interest | $ | 938 | | | $ | 938 | | | $ | 1,875 | | | $ | 1,719 | |
Amortization of deferred financing fees and premium | $ | 224 | | | $ | 224 | | | $ | 448 | | | $ | 465 | |
Total interest | $ | 1,162 | | | $ | 1,162 | | | $ | 2,323 | | | $ | 2,184 | |
The Company’s senior secured term loan credit agreement requires the Company to maintain at least $35,000 of liquidity as of the last day of any fiscal quarter where EBITDA, as defined in the Credit Agreement, is less than $10,000. The Company had minimum liquidity, as defined in the Credit Agreement, of $222,514 as of June 24, 2022.
As of June 24, 2022, the Company had reserved $20,541 of the ABL Facility for the issuance of letters of credit. As of June 24, 2022, funds totaling $159,460 were available for borrowing under the ABL Facility. At June 24, 2022, the interest rate charged on the Company’s senior secured term loan was approximately 6.6% and the interest rate charged on the Company’s ABL Facility was approximately 4.5%.
Note 10 – Stockholders’ Equity
Equity Awards
The following table reflects the activity of RSAs during the twenty-six weeks ended June 24, 2022:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Time-based | | Performance-based | | Market-based |
| | Shares | | Weighted Average Grant Date Fair Value | | Shares | | Weighted Average Grant Date Fair Value | | Shares | | Weighted Average Grant Date Fair Value |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Unvested at December 24, 2021 | | 617,996 | | | $ | 28.33 | | | 187,437 | | | $ | 32.04 | | | 185,129 | | | $ | 31.44 | |
Granted | | 154,822 | | | 27.32 | | | 167,261 | | | 32.44 | | | 167,261 | | | 29.12 | |
Vested | | (313,174) | | | 26.38 | | | — | | | — | | | — | | | — | |
Forfeited | | (12,094) | | | 29.13 | | | (14,001) | | | 32.14 | | | (14,003) | | | 30.82 | |
Unvested at June 24, 2022 | | 447,550 | | | $ | 29.32 | | | 340,697 | | | $ | 32.23 | | | 338,387 | | | $ | 30.32 | |
The Company granted 489,344 RSAs to its employees and directors at a weighted average grant date fair value of $30.50 during the twenty-six weeks ended June 24, 2022. These awards are a mix of time-, market- and performance-based grants that generally vest over a range of periods up to four years. The Company recognized expense totaling $2,939 and $3,280 on its RSAs during the thirteen weeks ended June 24, 2022 and June 25, 2021, respectively, and $5,982 and $5,738 during the twenty-six weeks ended June 24, 2022 and June 25, 2021, respectively.
At June 24, 2022, the total unrecognized compensation cost for unvested RSAs was $23,850 and the weighted-average remaining period was approximately 2.2 years. Of this total, $11,916 related to RSAs with time-based vesting provisions and $11,934 related to RSAs with performance-based vesting provisions. At June 24, 2022, the weighted-average remaining period for time-based vesting and performance-based vesting RSAs were approximately 2.1 years and 2.2 years, respectively.
No share-based compensation expense related to the Company’s RSAs or stock options has been capitalized. As of June 24, 2022, there were 2,088,866 shares available for grant under the 2019 Omnibus Equity Incentive Plan.
Note 11 – Related Parties
The Chefs’ Warehouse Mid-Atlantic, LLC, a subsidiary of the Company, leases a distribution facility that is 100% owned by entities controlled by Christopher Pappas, the Company’s chairman, president and chief executive officer, and John Pappas, the Company’s vice chairman and one of its directors, and are deemed to be affiliates of these individuals. Expense related to this facility totaled $123 during the thirteen weeks ended June 24, 2022 and June 25, 2021, and $246 during the twenty-six weeks ended June 24, 2022 and June 25, 2021.
Note 12 – Supplemental Disclosures of Cash Flow Information
| | | | | | | | | | | |
| Twenty-Six Weeks Ended |
| June 24, 2022 | | June 25, 2021 |
Supplemental cash flow disclosures: | | | |
Cash received for income taxes | $ | (239) | | | $ | (208) | |
Cash paid for interest, net of cash received | $ | 7,718 | | | $ | 7,766 | |
Cash paid for amounts included in the measurement of lease liabilities: | | | |
Operating cash flows from operating leases | $ | 13,837 | | | $ | 12,752 | |
Operating cash flows from finance leases | $ | 223 | | | $ | 282 | |
ROU assets obtained in exchange for lease liabilities: | | | |
Operating leases | $ | 20,116 | | | $ | 1,625 | |
Finance leases | $ | 411 | | | $ | 162 | |
Other non-cash investing and financing activities: | | | |
Warrants issued for acquisitions | $ | 1,701 | | | $ | 1,120 | |
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Contingent earn-out liabilities for acquisitions | $ | 1,200 | | | $ | 3,400 | |
Note 13 – Subsequent Events
On July 25, 2022, the Company entered into a stock purchase agreement to acquire substantially all of the shares of a center-of-the-plate distributor in Florida. The purchase price was $10,000 paid in cash at closing and is subject to a customary working capital true-up. The Company has not provided the preliminary purchase price allocation for this acquisition as the initial accounting is incomplete.