Grew Net Sales 7.7% to $9.7 Billion
and Gross Profit 7.2% to $1.7 Billion
Increased Net Income 8.8% to $198
Million
Delivered Record Adjusted EBITDA of $489
Million and Record Adjusted EBITDA Margin of 5.0%
Repurchased $41 Million of Shares and
Reduced Net Leverage to 2.6x
US Foods Holding Corp. (NYSE: USFD), one of the largest
foodservice distributors in the United States, today announced
results for the second quarter fiscal year 2024.
Second Quarter Fiscal Year 2024
Highlights
- Net sales increased 7.7% to $9.7 billion
- Total case volume increased 5.2%; independent restaurant case
volume increased 5.7%
- Gross profit increased 7.2% to $1.7 billion
- Net income was $198 million
- Adjusted EBITDA increased 13.2% to $489 million
- Diluted EPS increased 9.6% to $0.80; Adjusted Diluted EPS
increased 17.7% to $0.93
“During the second quarter, we delivered record Adjusted EBITDA
and EBITDA margin in a softer macro environment. Our team’s success
further emphasizes the strength of our operating model and ability
to control the controllables,” said Dave Flitman, CEO. “Our
balanced approach to drive improved profitability through the
execution of our strategic initiatives was evident again this
quarter and we captured market share with independent restaurants
for the 13th consecutive quarter.”
“We also held an exciting investor day on June 5 where we
outlined our new long-range plan to accelerate growth,
profitability and returns. We laid out our financial algorithm from
2025 through 2027 of growing sales at a 5% CAGR, increasing
Adjusted EBITDA at a 10% CAGR, expanding EBITDA margin by at least
20 basis points per year and growing Adjusted Diluted EPS at a 20%
CAGR. We are confident that we have the right strategy and the
operational rigor in place to deliver on our 2027 financial
targets, all underpinned by our 30,000 hardworking and dedicated
associates.”
“We delivered record profitability in the second quarter through
our balanced approach to drive top- and bottom-line gains despite
the operating environment,” added Dirk Locascio, CFO. “Maintaining
our disciplined approach to capital deployment and intense focus on
driving long-term shareholder value creation, we closed on the IWC
acquisition, repurchased $41 million of shares and further reduced
our net leverage while continuing to invest in the business. Given
our strong first half of the year and outlook for the remainder of
2024, we are reiterating our net sales, Adjusted EBITDA and
Adjusted Diluted EPS guidance.”
Second Quarter Fiscal Year 2024
Results
Net sales of $9.7 billion for the quarter increased 7.7% from
the prior year, driven by total case volume growth and food cost
inflation of 2.9%. Total case volume increased 5.2% from the prior
year driven by a 5.7% increase in independent restaurant case
volume, a 6.0% increase in healthcare volume, a 2.1% increase in
hospitality volume and a 4.2% increase in chain volume.
Gross profit of $1.7 billion increased by $115 million, or 7.2%
from the prior year, primarily as a result of an increase in total
case volume, improved cost of goods sold and pricing optimization,
partially offset by an unfavorable year-over-year LIFO adjustment.
Gross profit as a percentage of net sales was 17.6%. Adjusted Gross
profit was $1.7 billion, an increase of $130 million or 8.2% from
the prior year. Adjusted Gross profit as a percentage of net sales
was 17.6%.
Operating expenses of $1.4 billion increased by $84 million, or
6.6% from the prior year, primarily as a result of an increase in
total case volume and higher distribution costs, reflecting
increased labor costs, partially offset by continued distribution
productivity improvement driven by routing efficiency gains,
turnover reduction and process standardization as well as actions
to streamline administrative processes and costs. Operating
expenses as a percentage of net sales were 13.9%. Adjusted
Operating expenses were $1.2 billion, an increase of $68 million or
5.9% from the prior year. Adjusted Operating expenses as a
percentage of net sales were 12.5%.
Net income was $198 million, an increase of $16 million compared
to the prior year. Net income margin was 2.0%, an increase of 2
basis points compared to the prior year. Adjusted EBITDA was $489
million, an increase of $57 million or 13.2%, compared to the prior
year. Adjusted EBITDA margin was 5.0%, an increase of 25 basis
points compared to the prior year. Diluted EPS was $0.80; Adjusted
Diluted EPS was $0.93.
Cash Flow and Debt
Cash flow provided by operating activities for the first six
months of fiscal year 2024 was $621 million, a decrease of $32
million from the prior year due to less working capital benefit
than prior year. Cash capital expenditures for the first six months
of fiscal year 2024 totaled $156 million, an increase of $48
million from the prior year period, related to investments in
information technology, property and equipment for fleet
replacement and maintenance of distribution facilities.
Net Debt at the end of the second quarter of fiscal year 2024
was $4.3 billion. The ratio of Net Debt to Adjusted EBITDA was 2.6x
at the end of the second quarter of fiscal year 2024, compared to
2.8x at the end of fiscal year 2023 and 3.0x at the end of the
second quarter of fiscal year 2023.
During the second quarter of fiscal year 2024, the Company
repurchased 0.7 million shares of common stock at an aggregate
purchase price of $41 million.
On June 1, 2024, the Board authorized a new share repurchase
program of up to $1 billion. Under this new authorization, the
Company repurchased $21 million of shares in June 2024 and in the
third quarter through August 7, 2024, the Company repurchased
approximately $61 million of shares and has approximately $918
million in remaining funds authorized.
M&A Update
During the second quarter of fiscal year 2024, the Company
acquired IWC Food Service, a broadline distributor which serves the
greater Nashville area, for a purchase price of approximately $220
million. The acquisition was funded with cash from operations and
closed on April 5, 2024.
Outlook for Fiscal Year
20241
The Company is reiterating its Fiscal Year 2024 guidance.
- Net Sales of $37.5 to $38.5 billion
- Adjusted EBITDA of $1.69 to $1.74 billion
- Adjusted Diluted EPS of $3.00 to $3.20
________________________
1 The Company is not providing a
reconciliation of certain forward-looking non-GAAP financial
measures, including Adjusted EBITDA and Adjusted Diluted EPS,
because the Company is unable to predict with reasonable certainty
the financial impact of certain significant items, including
restructuring activity and asset impairment charges, share-based
compensation expenses, non-cash impacts of LIFO reserve
adjustments, losses on extinguishments of debt, business
transformation costs, other gains and losses, business acquisition
and integration related costs and diluted earnings per share. These
items are uncertain, depend on various factors, and could have a
material impact on GAAP reported results for the guidance periods.
For the same reasons, the Company is unable to address the
significance of the unavailable information, which could be
material to future results.
Conference Call and Webcast
Information
US Foods will host a live webcast to discuss second quarter
fiscal year 2024 results on Thursday, August 8, 2024, at 8 a.m.
CDT. The call can also be accessed live over the phone by dialing
(877) 344-2001; the conference ID number is 2528845. Presentation
slides will be available before the webcast begins. The webcast,
slides and a copy of this press release can be found in the
Investor Relations section of our website at https://ir.usfoods.com.
About US Foods
With a promise to help its customers Make It, US Foods is one of
America’s great food companies and a leading foodservice
distributor, partnering with approximately 250,000 restaurants and
foodservice operators to help their businesses succeed. With more
than 70 broadline locations and approximately 90 cash and carry
stores, US Foods and its 30,000 associates provides its customers
with a broad and innovative food offering and a comprehensive suite
of e-commerce, technology and business solutions. US Foods is
headquartered in Rosemont, Ill. Visit www.usfoods.com to learn
more.
Forward-Looking
Statements
Statements in this press release which are not historical in
nature, including those under the heading “Outlook for Fiscal Year
2024,” are “forward-looking statements” within the meaning of the
federal securities laws. These statements often include words such
as “believe,” “expect,” “project,” “anticipate,” “intend,” “plan,”
“outlook,” “estimate,” “target,” “seek,” “will,” “may,” “would,”
“should,” “could,” “forecast,” “mission,” “strive,” “more,” “goal,”
or similar expressions (although not all forward-looking statements
may contain such words) and are based upon various assumptions and
our experience in the industry, as well as historical trends,
current conditions, and expected future developments. However, you
should understand that these statements are not guarantees of
performance or results and 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 those expressed in the forward-looking statements,
including, among others: economic factors affecting consumer
confidence and discretionary spending and reducing the consumption
of food prepared away from home; cost inflation/deflation and
commodity volatility; competition; reliance on third party
suppliers and interruption of product supply or increases in
product costs; changes in our relationships with customers and
group purchasing organizations; our ability to increase or maintain
the highest margin portions of our business; achievement of
expected benefits from cost savings initiatives; increases in fuel
costs; changes in consumer eating habits; cost and pricing
structures; the impact of climate change or related legal,
regulatory or market measures; impairment charges for goodwill,
indefinite-lived intangible assets or other long-lived assets; the
impact of governmental regulations; product recalls and product
liability claims; our reputation in the industry; labor relations
and increased labor costs and continued access to qualified and
diverse labor; indebtedness and restrictions under agreements
governing our indebtedness; interest rate increases; disruption of
existing technologies and implementation of new technologies;
cybersecurity incidents and other technology disruptions; risks
associated with intellectual property, including potential
infringement; effective consummation of pending acquisitions and
effective integration of acquired businesses; potential costs
associated with shareholder activism; changes in tax laws and
regulations and resolution of tax disputes; certain provisions in
our governing documents; health and safety risks to our associates
and related losses; adverse judgments or settlements resulting from
litigation; extreme weather conditions, natural disasters and other
catastrophic events; and management of retirement benefits and
pension obligations.
For a detailed discussion of these risks, uncertainties and
other factors that could cause our actual results to differ
materially from those anticipated or expressed in any
forward-looking statements, see the section entitled “Risk Factors”
in our Annual Report on Form 10-K for the fiscal year ended
December 30, 2023 filed with the Securities and Exchange Commission
(“SEC”). Additional risks and uncertainties are discussed from time
to time in current, quarterly and annual reports filed by the
Company with the SEC, which are available on the SEC’s website at
www.sec.gov. Additionally, we operate in a highly competitive and
rapidly changing environment; new risks and uncertainties may
emerge from time to time, and it is not possible to predict all
risks nor identify all uncertainties. The forward-looking
statements contained in this press release speak only as of the
date of this press release and are based on information and
estimates available to us at this time. We undertake no obligation
to update or revise any forward-looking statements, except as may
be required by law.
Non-GAAP Financial
Measures
We report our financial results in accordance with U.S.
generally accepted accounting principles (“GAAP”). However,
Adjusted Gross profit, Adjusted Operating expenses, EBITDA,
Adjusted EBITDA, Adjusted EBITDA margin, Net Debt, Adjusted Net
income and Adjusted Diluted EPS are non-GAAP financial measures
regarding our operational performance and liquidity. These non-GAAP
financial measures exclude the impact of certain items and,
therefore, have not been calculated in accordance with GAAP.
We use Adjusted Gross profit and Adjusted Operating expenses as
supplemental measures to GAAP measures to focus on
period-over-period changes in our business and believe this
information is helpful to investors. Adjusted Gross profit is Gross
profit adjusted to remove the impact of the LIFO inventory reserve
adjustments. Adjusted Operating expenses are Operating expenses
adjusted to exclude amounts that we do not consider part of our
core operating results when assessing our performance.
We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA margin
provide meaningful supplemental information about our operating
performance because they exclude amounts that we do not consider
part of our core operating results when assessing our performance.
EBITDA is Net income (loss), plus Interest expense-net, Income tax
provision (benefit), and Depreciation and amortization. Adjusted
EBITDA is EBITDA adjusted for (1) Restructuring activity and asset
impairment charges; (2) Share-based compensation expense; (3) the
non-cash impact of LIFO reserve adjustments; (4) loss on
extinguishment of debt; (5) Business transformation costs; and (6)
other gains, losses or costs as specified in the agreements
governing our indebtedness. Adjusted EBITDA margin is Adjusted
EBITDA divided by total net sales.
We use Net Debt as a supplemental measure to GAAP measures to
review the liquidity of our operations. Net Debt is defined as
total debt net of total Cash, cash equivalents and restricted cash
remaining on the balance sheet as of the end of the most recent
fiscal quarter. We believe that Net Debt is a useful financial
metric to assess our ability to pursue business opportunities and
investments. Net Debt is not a measure of our liquidity under GAAP
and should not be considered as an alternative to Cash Flows
Provided by Operations or Cash Flows Used in Financing
Activities.
We believe that Adjusted Net income is a useful measure of
operating performance for both management and investors because it
excludes items that are not reflective of our core operating
performance and provides an additional view of our operating
performance including depreciation, interest expense, and Income
taxes on a consistent basis from period to period. Adjusted Net
income is Net income (loss) excluding such items as restructuring
activity and asset impairment charges, Share-based compensation
expense, the non-cash impacts of LIFO reserve adjustments,
amortization expense, loss on extinguishment of debt, Business
transformation costs and other items, and adjusted for the tax
effect of the exclusions and discrete tax items. We believe that
Adjusted Net income may be used by investors, analysts, and other
interested parties to facilitate period-over-period comparisons and
provides additional clarity as to how factors and trends impact our
operating performance.
We use Adjusted Diluted Earnings per Share, which is calculated
by adjusting the most directly comparable GAAP financial measure,
Diluted Earnings per Share, by excluding the same items excluded in
our calculation of Adjusted EBITDA to the extent that each such
item was included in the applicable GAAP financial measure. We
believe the presentation of Adjusted Diluted Earnings per Share is
useful to investors because the measurement excludes amounts that
we do not consider part of our core operating results when
assessing our performance. We also believe that the presentation of
Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Diluted
Earnings per Share is useful to investors because these metrics may
be used by securities analysts, investors and other interested
parties in their evaluation of the operating performance of
companies in our industry.
Management uses these non-GAAP financial measures (a) to
evaluate our historical and prospective financial performance as
well as our performance relative to our competitors as they assist
in highlighting trends, (b) to set internal sales targets and
spending budgets, (c) to measure operational profitability and the
accuracy of forecasting, (d) to assess financial discipline over
operational expenditures, and (e) as an important factor in
determining variable compensation for management and employees.
EBITDA and Adjusted EBITDA are also used in connection with certain
covenants and restricted activities under the agreements governing
our indebtedness. We also believe these and similar non-GAAP
financial measures are frequently used by securities analysts,
investors, and other interested parties to evaluate companies in
our industry.
We caution readers that our definitions of Adjusted Gross
profit, Adjusted Operating expenses, EBITDA, Adjusted EBITDA,
Adjusted EBITDA margin, Net Debt, Adjusted Net income and Adjusted
Diluted EPS may not be calculated in the same manner as similar
measures used by other companies. Definitions and reconciliations
of the non-GAAP financial measures to their most comparable GAAP
financial measures are included in the schedules attached to this
press release.
US FOODS HOLDING CORP.
Consolidated Balance
Sheets
(Unaudited)
($ in millions)
June 29, 2024
December 30, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
405
$
269
Accounts receivable, less allowances of
$20 and $18
1,976
1,854
Vendor receivables, less allowances of $6
and $5
212
156
Inventories—net
1,593
1,600
Prepaid expenses
131
138
Other current assets
17
14
Total current assets
4,334
4,031
Property and equipment—net
2,359
2,280
Goodwill
5,779
5,697
Other intangibles—net
867
803
Other assets
364
376
Total assets
$
13,703
$
13,187
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Cash overdraft liability
$
193
$
220
Accounts payable
2,349
2,051
Accrued expenses and other current
liabilities
706
731
Current portion of long-term debt
118
110
Total current liabilities
3,366
3,112
Long-term debt
4,589
4,564
Deferred tax liabilities
282
293
Other long-term liabilities
455
469
Total liabilities
8,692
8,438
Shareholders’ equity:
Common stock
3
3
Additional paid-in capital
3,696
3,663
Retained earnings
1,789
1,509
Accumulated other comprehensive loss
(112
)
(115
)
Treasury Stock
(365
)
(311
)
Total shareholders’ equity
5,011
4,749
Total liabilities and shareholders’
equity
$
13,703
$
13,187
US FOODS HOLDING CORP.
Consolidated Statements of
Operations
(Unaudited)
13 Weeks Ended
26 Weeks Ended
($ in millions, except share and per
share data)
June 29, 2024
July 1, 2023
June 29, 2024
July 1, 2023
Net sales
$
9,709
$
9,013
$
18,658
$
17,555
Cost of goods sold
8,003
7,422
15,457
14,539
Gross profit
1,706
1,591
3,201
3,016
Distribution, selling and administrative
costs
1,354
1,269
2,671
2,507
Restructuring activity and asset
impairment charges
(1
)
—
12
—
Total operating expenses
1,353
1,269
2,683
2,507
Operating income
353
322
518
509
Other expense (income)—net
3
(2
)
2
(3
)
Interest expense—net
81
82
160
163
Income before income taxes
269
242
356
349
Income tax provision
71
60
76
85
Net income
$
198
$
182
$
280
$
264
Net income
$
198
$
182
$
280
$
264
Series A convertible preferred stock
dividends
—
—
—
(7
)
Net income available to common
shareholders
$
198
$
182
$
280
$
257
Net income per share
Basic
$
0.81
$
0.76
$
1.14
$
1.11
Diluted
$
0.80
$
0.73
$
1.13
$
1.05
Weighted-average common shares
outstanding
Basic
245,729,372
238,302,347
245,396,094
232,277,995
Diluted
248,312,117
250,991,512
248,393,517
251,389,602
US FOODS HOLDING CORP.
Consolidated Statements of
Cash Flows
(Unaudited)
26 Weeks Ended
($ in millions)
June 29, 2024
July 1, 2023
Cash flows from operating activities:
Net income
$
280
$
264
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
213
193
Gain on disposal of property and
equipment—net
(1
)
(2
)
Amortization of deferred financing
costs
5
10
Deferred tax (benefit) provision
(11
)
1
Share-based compensation expense
30
28
Provision for doubtful accounts
15
16
Changes in operating assets and
liabilities:
Increase in receivables
(181
)
(199
)
Decrease in inventories
19
85
Decrease (increase) in prepaid expenses
and other assets
13
(6
)
Increase in accounts payable and cash
overdraft liability
277
309
Decrease in accrued expenses and other
liabilities
(38
)
(46
)
Net cash provided by operating
activities
621
653
Cash flows from investing activities:
Proceeds from sales of property and
equipment
2
2
Purchases of property and equipment
(156
)
(108
)
Acquisition of businesses—net of cash
received
(214
)
—
Net cash used in investing activities
(368
)
(106
)
Cash flows from financing activities:
Principal payments on debt and financing
leases
(1,568
)
(446
)
Principal payments on debt repricing
(14
)
—
Proceeds from debt repricing
14
—
Proceeds from debt borrowings
1,503
255
Dividends paid on Series A convertible
preferred stock
—
(7
)
Repurchase of common stock
(54
)
(202
)
Debt financing costs and fees
(1
)
—
Proceeds from employee stock purchase
plan
14
13
Proceeds from exercise of stock
options
9
22
Purchase of interest rate caps
—
(3
)
Tax withholding payments for net
share-settled equity awards
(20
)
(11
)
Net cash used in financing activities
(117
)
(379
)
Net increase in cash, cash equivalents and
restricted cash
136
168
Cash, cash equivalents and restricted
cash—beginning of period
269
211
Cash, cash equivalents and restricted
cash—end of period
$
405
$
379
Supplemental disclosures of cash flow
information:
Conversion of Series A Convertible
Preferred Stock
$
—
$
534
Interest paid—net of amounts
capitalized
147
147
Income taxes paid—net
57
67
Property and equipment purchases included
in accounts payable
29
24
Leased assets obtained in exchange for
financing lease liabilities
94
81
Leased assets obtained in exchange for
operating lease liabilities
19
22
Cashless exercise of stock options
5
1
US FOODS HOLDING CORP.
Non-GAAP
Reconciliation
(Unaudited)
13 Weeks Ended
($ in millions, except share and per
share data)
June 29, 2024
July 1, 2023
Change
%
Net income and net income margin
(GAAP)
198
2.0
%
182
2.0
%
16
8.8
%
Interest expense—net
81
82
(1
)
(1.2
)%
Income tax provision
71
60
11
18.3
%
Depreciation expense
96
84
12
14.3
%
Amortization expense
12
11
1
9.1
%
EBITDA and EBITDA margin
(Non-GAAP)
458
4.7
%
419
4.6
%
39
9.3
%
Adjustments:
Restructuring activity and asset
impairment charges (1)
(1
)
—
(1
)
NM
Share-based compensation expense (2)
15
14
1
7.1
%
LIFO reserve adjustment (3)
—
(15
)
15
(100.0
)%
Business transformation costs (4)
9
3
6
200.0
%
Business acquisition and integration
related costs and other (5)
8
11
(3
)
(27.3
)%
Adjusted EBITDA and Adjusted EBITDA
margin (Non-GAAP)
489
5.0
%
432
4.8
%
57
13.2
%
Depreciation expense
(96
)
(84
)
(12
)
14.3
%
Interest expense—net
(81
)
(82
)
1
(1.2
)%
Income tax provision, as adjusted (6)
(81
)
(67
)
(14
)
20.9
%
Adjusted Net Income (Non-GAAP)
$
231
$
199
$
32
16.1
%
Diluted EPS (GAAP)
$
0.80
$
0.73
$
0.07
9.6
%
Restructuring activity and asset
impairment charges (1)
—
—
—
NM
Share-based compensation expense (2)
0.06
0.06
—
—
%
LIFO reserve adjustment (3)
—
(0.06
)
0.06
(100.0
)%
Business transformation costs (4)
0.04
0.01
0.03
300.0
%
Business acquisition and integration
related costs and other (5)
0.03
0.04
(0.01
)
(25.0
)%
Income tax provision, as adjusted (6)
—
0.01
(0.01
)
NM
Adjusted Diluted EPS (Non-GAAP)
(7)
$
0.93
$
0.79
$
0.14
17.7
%
Weighted-average diluted shares
outstanding (Non-GAAP) (8)
248,312,117
250,991,512
Gross profit (GAAP)
$
1,706
$
1,591
$
115
7.2
%
LIFO reserve adjustment (3)
—
(15
)
15
(100.0
)%
Adjusted Gross profit
(Non-GAAP)
$
1,706
$
1,576
$
130
8.2
%
Operating expenses (GAAP)
$
1,353
$
1,269
$
84
6.6
%
Depreciation expense
(96
)
(84
)
(12
)
14.3
%
Amortization expense
(12
)
(11
)
(1
)
9.1
%
Restructuring activity and asset
impairment charges (1)
1
—
1
NM
Share-based compensation expense (2)
(15
)
(14
)
(1
)
7.1
%
Business transformation costs (4)
(9
)
(3
)
(6
)
200.0
%
Business acquisition and integration
related costs and other (5)
(8
)
(11
)
3
(27.3
)%
Adjusted Operating expenses
(Non-GAAP)
$
1,214
$
1,146
$
68
5.9
%
NM - Not Meaningful
(1)
Consists primarily of severance and
related costs associated with organizational realignment and other
impairment charges.
(2)
Share-based compensation expense for
expected vesting of stock awards and employee stock purchase
plan.
(3)
Represents the impact of LIFO reserve
adjustments.
(4)
Transformation costs represent
non-recurring expenses prior to formal launch of strategic projects
with anticipated long-term benefits to the Company. These costs
generally relate to third party consulting and non-capitalizable
technology. For the 13 weeks ended June 29, 2024, business
transformation costs related to projects associated with
information technology infrastructure initiatives and workforce
efficiency initiatives. For the 13 weeks ended July 1, 2023,
business transformation costs related to projects associated with
projects associated with information technology infrastructure
initiatives.
(5)
Includes: (i) aggregate acquisition and
integration related costs of $8 million and $11 million for the 13
weeks ended June 29, 2024 and July 1, 2023, respectively and (ii)
other gains, losses or costs that we are permitted to addback for
purposes of calculating Adjusted EBITDA under certain agreements
governing our indebtedness.
(6)
Represents our income tax provision
adjusted for the tax effect of pre-tax items excluded from Adjusted
net income and the removal of applicable discrete tax items.
Applicable discrete tax items include changes in tax laws or rates,
changes related to prior year unrecognized tax benefits, discrete
changes in valuation allowances, and excess tax benefits associated
with share-based compensation. The tax effect of pre-tax items
excluded from Adjusted net income is computed using a statutory tax
rate after taking into account the impact of permanent differences
and valuation allowances.
(7)
Adjusted Diluted EPS is calculated as
Adjusted net income divided by weighted average diluted shares
outstanding (Non-GAAP).
(8)
For purposes of the Adjusted Diluted EPS
calculation (Non-GAAP), when the Company has net income (GAAP),
weighted average diluted shares outstanding (Non-GAAP) is used and
assumes conversion of the Series A convertible preferred stock,
and, when the Company has net loss (GAAP) and assumed conversion of
the Series A convertible preferred stock would be antidilutive,
weighted-average diluted shares outstanding (GAAP) is used.
US FOODS HOLDING CORP.
Non-GAAP
Reconciliation
(Unaudited)
26 Weeks Ended
($ in millions, except share and per
share data)
June 29, 2024
July 1, 2023
Change
%
Net income available to common
shareholders and net income margin (GAAP)
$
280
1.5
%
$
257
1.5
%
$
23
8.9
%
Series A convertible preferred stock
dividends
—
(7
)
7
(100.0
)%
Net income and net income margin
(GAAP)
280
1.5
%
264
1.5
%
16
6.1
%
Interest expense—net
160
163
(3
)
(1.8
)%
Income tax provision
76
85
(9
)
(10.6
)%
Depreciation expense
189
171
18
10.5
%
Amortization expense
24
22
2
9.1
%
EBITDA and EBITDA margin
(Non-GAAP)
729
3.9
%
705
4.0
%
24
3.4
%
Adjustments:
Restructuring costs and asset impairment
charges (1)
12
—
12
—
%
Share-based compensation expense (2)
30
28
2
7.1
%
LIFO reserve adjustment(3)
45
5
40
800.0
%
Business transformation costs (4)
18
7
11
157.1
%
Business acquisition and integration
related costs and other (5)
11
24
(13
)
(54.2
)%
Adjusted EBITDA and Adjusted EBITDA
margin (Non-GAAP)
845
4.5
%
769
4.4
%
76
9.9
%
Depreciation expense
(189
)
(171
)
(18
)
10.5
%
Interest expense—net
(160
)
(163
)
3
(1.8
)%
Income tax provision, as adjusted (6)
(131
)
(111
)
(20
)
18.0
%
Adjusted Net Income (Non-GAAP)
$
365
$
324
$
41
12.7
%
Diluted EPS (GAAP)
$
1.13
$
1.05
$
0.08
7.6
%
Restructuring costs and asset impairment
charges (1)
0.05
—
0.05
—
%
Share-based compensation expense (2)
0.12
0.11
0.01
9.1
%
LIFO reserve adjustment (3)
0.18
0.02
0.16
800.0
%
Business transformation costs (4)
0.07
0.03
0.04
133.3
%
Business acquisition and integration
related costs and other (5)
0.04
0.10
(0.06
)
(60.0
)%
Income tax provision, as adjusted (6)
(0.12
)
(0.02
)
(0.10
)
500.0
%
Adjusted Diluted EPS (Non-GAAP)
(7)
$
1.47
$
1.29
$
0.18
14.0
%
Weighted-average diluted shares
outstanding (Non-GAAP) (8)
248,393,517
251,389,602
Gross profit (GAAP)
$
3,201
$
3,016
$
185
6.1
%
LIFO reserve adjustment (3)
45
5
40
800.0
%
Adjusted Gross profit
(Non-GAAP)
$
3,246
$
3,021
$
225
7.4
%
Operating expenses (GAAP)
$
2,683
$
2,507
$
176
7.0
%
Depreciation expense
(189
)
(171
)
(18
)
10.5
%
Amortization expense
(24
)
(22
)
(2
)
9.1
%
Restructuring costs and asset impairment
charges (1)
(12
)
—
(12
)
—
%
Share-based compensation expense (2)
(30
)
(28
)
(2
)
7.1
%
Business transformation costs (5)
(18
)
(7
)
(11
)
157.1
%
Business acquisition and integration
related costs and other (6)
(11
)
(24
)
13
(54.2
)%
Adjusted Operating expenses
(Non-GAAP)
$
2,399
$
2,255
$
144
6.4
%
NM - Not Meaningful
(1)
Consists primarily of severance and
related costs, organizational realignment costs and other asset
impairment charges.
(2)
Share-based compensation expense for
expected vesting of stock awards and employee stock purchase
plan.
(3)
Represents the impact of LIFO reserve
adjustments.
(4)
Transformational costs represent
non-recurring expenses prior to formal launch of strategic projects
with anticipated long-term benefits to the Company. These costs
generally relate to third party consulting and non-capitalizable
technology. For the 26 weeks ended June 29, 2024, business
transformation costs related to projects associated with
information technology infrastructure initiatives and workforce
efficiency initiatives. For the 26 weeks ended July 1, 2023,
business transformation costs related to projects associated with
information technology infrastructure initiatives.
(5)
Includes: (i) aggregate acquisition and
integration related costs of $10 million and $21 million for the 26
weeks ended June 29, 2024 and July 1, 2023, respectively; (ii) CEO
sign on bonus of $3 million for the 26 weeks ended July 1, 2023 and
(iii) other gains, losses or costs that we are permitted to addback
for purposes of calculating Adjusted EBITDA under certain
agreements governing our indebtedness.
(6)
Represents our income tax provision
adjusted for the tax effect of pre-tax items excluded from Adjusted
net income and the removal of applicable discrete tax items.
Applicable discrete tax items include changes in tax laws or rates,
changes related to prior year unrecognized tax benefits, discrete
changes in valuation allowances, and excess tax benefits associated
with share-based compensation. The tax effect of pre-tax items
excluded from Adjusted net income is computed using a statutory tax
rate after taking into account the impact of permanent differences
and valuation allowances.
(7)
Adjusted Diluted EPS is calculated as
Adjusted net income divided by weighted average diluted shares
outstanding (Non-GAAP).
(8)
For purposes of the Adjusted Diluted EPS
calculation (Non-GAAP), when the Company has net income (GAAP),
weighted average diluted shares outstanding (Non-GAAP) is used and
assumes conversion of the Series A convertible preferred stock,
and, when the Company has net loss (GAAP) and assumed conversion of
the Series A convertible preferred stock would be antidilutive,
weighted-average diluted shares outstanding (GAAP) is used.
US FOODS HOLDING CORP.
Non-GAAP
Reconciliation
Net Debt and Net Leverage
Ratios
($ in millions, except ratios)
June 29, 2024
December 30, 2023
July 1, 2023
Total Debt (GAAP)
$
4,707
$
4,674
$
4,751
Cash, cash equivalents and restricted
cash
(405
)
(269
)
(379
)
Net Debt (Non-GAAP)
$
4,302
$
4,405
$
4,372
Adjusted EBITDA (1)
$
1,635
$
1,559
$
1,470
Net Leverage Ratio (2)
2.6
2.8
3.0
(1) Trailing Twelve Months (TTM) Adjusted
EBITDA
(2) Net Debt/TTM Adjusted EBITDA
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240807211740/en/
INVESTOR CONTACT: Mike Neese (847) 232-5894
Michael.Neese@usfoods.com
MEDIA CONTACT: Sara Matheu (773) 580-3775
Sara.Matheu@usfoods.com
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