UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March ~~27, 2020~~26, 2021



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number: 001-35249

THE CHEFS’ WAREHOUSE, INC.

(Exact name of registrant as specified in its charter)

Delaware

20-3031526

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

100 East Ridge Road

Ridgefield,, Connecticut06877

(Address of principal executive offices)

Registrant’s telephone number, including area code: (~~203~~) (203) 894-1345

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	CHEF	The NASDAQ Stock Market LLC
Preferred Stock Purchase Rights	CHEF	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒☐

Accelerated filer

☐☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock, par value $.01 per share, outstanding at ~~May 4, 2020:~~ ~~31,031,894~~

April 26, 2021: 37,901,560

THE CHEFS’ WAREHOUSE, INC.

FORM 10-Q

Table of Contents



		Page
PART I. FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements (unaudited):	4

	Consolidated Balance Sheets	4

	Consolidated Statements of Operations and Comprehensive ~~(Loss) Income~~Loss	5

	Consolidated Statements of Changes in Stockholders’ Equity	6

	Consolidated Statements of Cash Flows	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1716

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2220

Item 4.	Controls and Procedures	2220

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	2320

Item 1A.	Risk Factors	2320

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2321

Item 3.	Defaults Upon Senior Securities	2421

Item 4.	Mine Safety Disclosures	2421

Item 5.	Other Information	2421

Item 6.	Exhibits	2522

	Signatures	2623

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Statements in this report regarding the business of The Chefs’ Warehouse, Inc. (the “Company”) that are not historical facts are “forward-looking statements” ~~within the meaning of the Private Securities Litigation Reform Act, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended,~~ that involve risks and uncertainties and are based on current expectations and management estimates; actual results may differ materially. Words such as “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and/or could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The risks and uncertainties which could impact these statements include, but are not limited to the following: our sensitivity to general economic conditions, including disposable income levels and changes in consumer discretionary spending; our ability to expand our operations in our existing markets and to penetrate new markets through acquisitions; we may not achieve the benefits expected from our acquisitions, which could adversely impact our business and operating results; we may have difficulty managing and facilitating our future growth; conditions beyond our control could materially affect the cost and/or availability of our specialty food products or center-of-the-plate products and/or interrupt our distribution network; our increased distribution of center-of-the-plate products, like meat, poultry and seafood, involves increased exposure to price volatility experienced by those products; our business is a low-margin business and our profit margins may be sensitive to inflationary and deflationary pressures; because our foodservice distribution operations are concentrated in certain culinary markets, we are susceptible to economic and other developments, including adverse weather conditions, in these areas; fuel cost volatility may have a material adverse effect on our business, financial condition or results of operations; our ability to raise capital in the future may be limited; we may be unable to obtain debt or other financing, including financing necessary to execute on our acquisition strategy, on favorable terms or at all; interest charged on our outstanding debt may be adversely affected by changes in the method of determining London Interbank Offered Rate (LIBOR), or the replacement of LIBOR with an alternative rate; our business operations and future development could be significantly disrupted if we lose key members of our management team; and significant public health epidemics or pandemics, including the COVID-19 pandemic, may adversely affect our business, results of operations and financial ~~condition;~~condition. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, as such, speak only as of the date made. A more detailed description of these and other ~~risks and uncertainties included under~~risk factors is contained in the ~~heading Risk Factors in our~~Company’s most recent Annual Report on Form 10-K filed ~~on February 24, 2020~~ with the Securities and Exchange Commission ~~(the “SEC”~~(“SEC”) on February 23, 2021 and inother reports, including this Quarterly Report on Form ~~10-Q.~~10-Q, filed by the Company with the SEC since that date. The Company is not undertaking to update any information in the foregoing report until the effective date of its future reports required by applicable laws.

PART I FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

THE CHEFS’ WAREHOUSE, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)


	March 26, 2021 (unaudited)		December 25, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	175,000	$	193,281
Accounts receivable, net of allowance of $22,379 in 2021 and $24,027 in 2020	99,459		96,383
Inventories, net	91,814		82,519

Prepaid expenses and other current assets	32,631		33,479
Total current assets	398,904		405,662

Equipment, leasehold improvements and software, net	113,450		115,448
Operating lease right-of-use assets	110,726		115,224
Goodwill	214,888		214,864
Intangible assets, net	108,219		111,717
Deferred taxes, net	12,560		7,535
Other assets	3,835		3,875
Total assets	$	962,582	$	974,325
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	69,461	$	57,515
Accrued liabilities	26,829		27,924
Short-term operating lease liabilities	16,898		17,167
Accrued compensation	10,603		9,401
Current portion of long-term debt	6,043		6,095
Total current liabilities	129,834		118,102
Long-term debt, net of current portion	396,489		398,084
Operating lease liabilities	105,016		109,133

Other liabilities and deferred credits	3,227		4,416
Total liabilities	634,566		629,735
Commitments and contingencies	0		0
Stockholders’ equity:
Preferred Stock - $0.01 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at March 26, 2021 and December 25, 2020	0		0
Common Stock, - $0.01 par value, 100,000,000 shares authorized, 37,909,695 and 37,274,768 shares issued and outstanding at March 26, 2021 and December 25, 2020, respectively	379		373
Additional paid in capital	304,994		303,734
Accumulated other comprehensive loss	(1,970)		(2,051)
Retained earnings	24,613		42,534
Total stockholders’ equity	328,016		344,590
Total liabilities and stockholders’ equity	$	962,582	$	974,325

March 27, 2020
(unaudited) December 27, 2019
ASSETS

Current assets:

Cash and cash equivalents $ 193,517
$ 140,233
Accounts receivable, net of allowance of $25,618 in 2020 and $8,846 in 2019 144,263
175,044
Inventories, net 129,999
124,056
Prepaid expenses and other current assets 24,914
13,823
Total current assets 492,693
453,156
Equipment, leasehold improvements and software, net 125,635
92,846
Operating lease right-of-use assets 127,255
127,649
Goodwill 212,510
197,743
Intangible assets, net 145,752
138,751
Other assets 3,069
3,534
Total assets $ 1,106,914
$ 1,013,679
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable $ 92,621
$ 94,097
Accrued liabilities 29,477
29,847
Short-term operating lease liabilities 18,091
17,453
Accrued compensation 8,172
8,033
Current portion of long-term debt 4,069
721
Total current liabilities 152,430
150,151
Long-term debt, net of current portion 495,860
386,106
Operating lease liabilities 119,786
120,572
Deferred taxes, net 8,983
10,883
Other liabilities and deferred credits 10,238
10,034
Total liabilities 787,297
677,746
Commitments and contingencies

Stockholders’ equity:

Preferred Stock - $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding at March 27, 2020 and December 27, 2019 —
—
Common Stock, - $0.01 par value, 100,000,000 shares authorized, 30,989,742 and 30,341,941 shares issued and outstanding at March 27, 2020 and December 27, 2019, respectively 310
304
Additional paid in capital 210,381
212,240
Accumulated other comprehensive loss (2,426 ) (2,048 )
Retained earnings 111,352
125,437
Total stockholders’ equity 319,617
335,933
Total liabilities and stockholders’ equity $ 1,106,914
$ 1,013,679

See accompanying notes to the consolidated financial statements.


	Common Stock			Additional Paid in Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total
	Shares	Amount
Balance December 25, 2020	37,274,768	$	373	$	303,734	$	(2,051)	$	42,534	$	344,590

Net loss	—	—		—		—		(17,921)		(17,921)
Stock compensation	673,430	6		2,452		—		—		2,458




Cumulative translation adjustment	—	—		—		81		—		81
Shares surrendered to pay tax withholding	(38,503)	—		(1,192)		—		—		(1,192)
Balance March 26, 2021	37,909,695	$	379	$	304,994	$	(1,970)	$	24,613	$	328,016

Common Stock
Additional
Paid in
Capital

Accumulated
Other
Comprehensive
Loss

Retained
Earnings
Total
Shares Amount
Balance December 27, 2019 30,341,941
$ 304
$ 212,240
$ (2,048 ) $ 125,437
$ 335,933
Net loss —
—
—
—
(14,085 ) (14,085 )
Stock compensation 807,433
8
843
—
—
851
Cumulative translation adjustment —
—
—
(378 ) —
(378 )
Shares surrendered to pay tax withholding (159,632 ) (2 ) (2,702 ) —
—
(2,704 )
Balance March 27, 2020 30,989,742
$ 310
$ 210,381
$ (2,426 ) $ 111,352
$ 319,617


Balance December 27, 2019	30,341,941	$	304	$	212,240	$	(2,048)	$	125,437	$	335,933

Net loss	—	—		—		—		(14,085)		(14,085)
Stock compensation	807,433	8		843		—		—		851




Cumulative translation adjustment	—	—		—		(378)		—		(378)
Shares surrendered to pay tax withholding	(159,632)	(2)		(2,702)		—		—		(2,704)
Balance March 27, 2020	30,989,742	$	310	$	210,381	$	(2,426)	$	111,352	$	319,617

See accompanying notes to the consolidated financial statements.


	Thirteen Weeks Ended
	March 26, 2021		March 27, 2020
Cash flows from operating activities:
Net loss	$	(17,921)	$	(14,085)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	5,107		4,762
Amortization of intangible assets	3,539		3,298
Provision for allowance for doubtful accounts	(451)		18,431
Non-cash operating lease expense	109		244
Benefit for deferred income taxes	(5,025)		(1,900)
Amortization of deferred financing fees	864		762

Stock compensation	2,458		851
Change in fair value of contingent earn-out liabilities	(1,308)		(6,812)
Loss on asset disposal	5		42
Changes in assets and liabilities, net of acquisitions:
Accounts receivable	(2,585)		33,141
Inventories	(9,357)		2,501
Prepaid expenses and other current assets	850		(8,855)
Accounts payable, accrued liabilities and accrued compensation	12,026		(14,311)

Other assets and liabilities	26		3,916
Net cash (used in) provided by operating activities	(11,663)		21,985

Cash flows from investing activities:
Capital expenditures	(2,896)		(3,093)
Cash paid for acquisitions, net of cash received	0		(63,450)

Net cash used in investing activities	(2,896)		(66,543)

Cash flows from financing activities:

Payment of debt, finance lease and other financing obligations	(32,834)		(687)

Proceeds from debt issuance	51,750		0

Payment of deferred financing fees	(1,450)		0

Surrender of shares to pay withholding taxes	(1,192)		(838)
Cash paid for contingent earn-out liability	0		(500)
Borrowings under asset-based loan facility	0		100,000
Payments under asset based loan facility	(20,000)		0

Net cash (used in) provided by financing activities	(3,726)		97,975

Effect of foreign currency on cash and cash equivalents	4		(133)
Net change in cash and cash equivalents	(18,281)		53,284
Cash and cash equivalents-beginning of period	193,281		140,233
Cash and cash equivalents-end of period	$	175,000	$	193,517

See accompanying notes to the consolidated financial statements.

Note 1 - Operations and Basis of Presentation

Description of Business and Basis of Presentation

The COVID-19 Pandemic

Unaudited Interim Financial Statements

Guidance Adopted in Fiscal ~~2020~~

~~Measurement of Credit Losses on Financial Instruments:~~
In June 2016 and as further amended in November 2018, the Financial Accounting Standards Board (the “FASB”) issued guidance which requires entities to use a forward-looking expected loss model to estimate credit losses. It also requires additional disclosure related to credit quality of trade and other receivables, including information related to management’s estimate of credit allowances. The Company adopted this guidance on December 28, 2019. The Company analyzes customer creditworthiness, accounts receivable balances, payment history, payment terms and historical bad debt levels when evaluating the adequacy of its allowance for doubtful accounts. In instances where a reserve has been recorded for a particular customer, future sales to the customer are either conducted using cash-on-delivery terms or the account is closely monitored so that agreed-upon payments are received prior to orders being released. A failure to pay results in held or cancelled orders. The Company also estimates receivables that will ultimately be uncollectible based upon historical write-off experience. Management incorporates current macro-economic factors in existence as of the balance sheet date that may impact the food-away-from-home industry and/or its customers, and specifically in the first quarter of fiscal 2020, the impact of COVID-19. Adoption of this guidance did not have a material effect on the Company’s consolidated financial statements.

~~Guidance Not Yet Adopted~~

Simplifying the Accounting for Income Taxes: In December 2019, the ~~FASB~~Financial Accounting Standards Board (the “FASB”) issued guidance that eliminates certain exceptions related to the approach for intraperiod tax allocations, the methodology for calculating income taxes in an interim period and other simplifications and clarifications. As a result of the new guidance, the Company may recognize additional income tax benefits during interim periods in which interim losses exceed full year projections due to provisions in the guidance that remove loss limitation rules. This guidance was adopted on December 26, 2020 and adoption had an immaterial impact on the Company’s consolidated financial statements.

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity: In August 2020, the FASB issued guidance that simplifies the accounting models for financial instruments with characteristics of debt and equity. The amendments in the guidance result in fewer instances in which an embedded conversion feature must be accounted for separately from its host contract. This guidance will be effective for fiscal years beginning after December 15, ~~2020. Early~~2021. This guidance was adopted on December 26, 2020 and adoption ~~is permitted. The Company expects to adopt this guidance when effective and is evaluating~~did not impact the ~~impact of adoption on its~~Company’s consolidated financial statements.

Note 2 – Summary of Significant Accounting Policies

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 20 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 ~~operating~~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.


	Thirteen Weeks Ended
	March 26, 2021				March 27, 2020
Center-of-the-Plate	$	139,880	49.9	%	$	163,820	43.6	%
Dry Goods	37,749		13.5	%	57,886		15.4	%
Pastry	40,978		14.6	%	49,261		13.1	%
Cheese and Charcuterie	23,125		8.3	%	35,073		9.3	%
Produce	20,535		7.3	%	24,020		6.4	%
Dairy and Eggs	2,297		0.8	%	22,146		5.9	%
Oils and Vinegars	9,567		3.4	%	16,159		4.3	%
Kitchen Supplies	6,086		2.2	%	7,066		2.0	%
Total	$	280,217	100	%	$	375,431	100	%

Thirteen Weeks Ended
March 27, 2020 March 29, 2019
Center-of-the-Plate $ 163,820
43.6 % $ 156,616
43.9 %
Dry Goods 67,654
18.0 % 63,754
17.9 %
Pastry 54,904
14.6 % 50,205
14.1 %
Cheese and Charcuterie 38,130
10.2 % 35,355
9.9 %
Dairy and Eggs 24,716
6.6 % 25,614
7.2 %
Oils and Vinegars 18,190
4.8 % 18,693
5.2 %
Kitchen Supplies 8,017
2.2 % 6,790
1.8 %
Total $ 375,431
100 % $ 357,027
100 %

~~Deferred Revenue~~

Food Processing Costs

~~Certain customer arrangements~~

The Company’s standard terms and conditions provide customers with a right of return if the goods received are not merchantable. Customers are either issued a replacement order at no cost, or are issued a credit for the returned goods. The Company recorded a refund liability of $245 and $314 as of March 27, 2020 and December 27, 2019, respectively. Refund liabilities are reflected as ~~accrued liabilities~~ on the consolidated balance sheets. The Company recognized a corresponding asset of $151 and $194 as of March 27, 2020 and December 27, 2019, respectively, for its right to recover products from customers on settling its refund liabilities. This asset is reflected as ~~inventories, net~~ ~~on the consolidated balance sheets.~~

~~Sales commissions are expensed when incurred because the amortization period is one year or less. These costs are presented within~~ ~~operating expenses~~ ~~on the Company’s consolidated statements of operations.~~

Note 3 – Net ~~(Loss) Income~~Loss per Share

The following table sets forth the computation of basic and diluted net (loss) income per common share:


	Thirteen Weeks Ended
	March 26, 2021		March 27, 2020
Net loss per share:
Basic	$	(0.49)	$	(0.48)
Diluted	$	(0.49)	$	(0.48)
Weighted average common shares:
Basic	36,401,748		29,621,433
Diluted	36,401,748		29,621,433

Thirteen Weeks Ended
March 27, 2020 March 29, 2019
Net (loss) income per share:
Basic $ (0.48 ) $ 0.04
Diluted $ (0.48 ) $ 0.04
Weighted average common shares:
Basic 29,621,433
29,457,257
Diluted 29,621,433
29,840,979

Thirteen Weeks Ended
March 27, 2020 March 29, 2019
Numerator:
Net (loss) income $ (14,085 ) $ 1,134
Denominator:
Weighted average basic common shares outstanding 29,621,433
29,457,257
Dilutive effect of stock options and unvested common shares —
383,722
Weighted average diluted common shares outstanding 29,621,433
29,840,979


	Thirteen Weeks Ended
	March 26, 2021		March 27, 2020
Numerator:
Net loss	$	(17,921)	$	(14,085)



Denominator:
Weighted average basic common shares outstanding	36,401,748		29,621,433


Weighted average diluted common shares outstanding	36,401,748		29,621,433


	Thirteen Weeks Ended
	March 26, 2021	March 27, 2020
Restricted share awards (“RSAs”)	779,968	75,779
Stock options	115,639	39,075
Convertible notes	3,795,570	3,484,788

Thirteen Weeks Ended
March 27, 2020 March 29, 2019
Restricted share awards (“RSAs”) 27,649
—
Convertible notes 3,484,788
91,053

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 ~~$7,478~~$1,248 and ~~$7,957~~$2,556 as of March ~~27, 2020~~26, 2021 and December ~~27, 2019,~~25, 2020, 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 (income)expenses, net on the consolidated statements of operations.


	Fells Point		Bassian		Sid Wainer		Other Acquisitions		Total
Balance December 27, 2019	$	4,544	$	7,957	$	0	$	2,197	$	14,698
Acquisition value	0		0		2,081		1,383		3,464

Cash payments	0		(2,250)		0		(1,677)		(3,927)
Changes in fair value	(4,544)		(4,631)		(1,570)		(734)		(11,479)
Balance December 25, 2020	$	0	$	1,076	$	511	$	1,169	$	2,756



Changes in fair value	0		4		(511)		(801)		(1,308)
Balance March 26, 2021	$	0	$	1,080	$	0	$	368	$	1,448

Fells Point Bassian Sid Wainer Other Acquisitions Total
Balance December 27, 2019 $ 4,544
$ 7,957
$ —
$ 2,197
$ 14,698
Acquisition value —
—
2,081
1,383
3,464
Cash payments —
—
—
(500 ) (500 )
Changes in fair value (2,583 ) (1,777 ) (1,602 ) (850 ) (6,812 )
Balance March 27, 2020 $ 1,961
$ 6,180
$ 479
$ 2,230
$ 10,850

Fair Value of Financial Instruments

March 27, 2020 December 27, 2019
Carrying Value Fair Value Carrying Value Fair Value
Convertible Senior Notes $ 150,000
$ 130,977
$ 150,000
$ 165,000
Convertible Unsecured Note $ 4,000
$ 3,595
$ 4,000
$ 4,282


	March 26, 2021				December 25, 2020
	Carrying Value		Fair Value		Carrying Value		Fair Value
Convertible Senior Notes	$	200,000	$	238,661	$	150,000	$	163,204
Convertible Unsecured Note	$	4,000	$	4,687	$	4,000	$	4,290

Note 5 ~~– Acquisitions~~

On January 27, 2020, pursuant to an asset purchase agreement, the Company acquired substantially all of the assets, including certain real-estate assets, of Sid Wainer & Son (“Sid Wainer”), a specialty food and produce distributor in New England. The purchase price was approximately $46,450 paid in cash at closing and is subject to a customary working capital true-up. The Company will also pay additional contingent consideration, if earned, in the form of an earn-out amount which could total $4,000 over a two-year period. The payment of the earn-out liability is subject to the successful achievement of certain gross profit targets. The Company estimated the fair value of this contingent earn-out liability to be $2,081 and $479 as of January 27, 2020 and March 27, 2020, respectively.

The Company is in the process of finalizing a valuation of the earn-out liability, and tangible and intangible assets of Sid Wainer as of the acquisition date. When applicable, these valuations require the use of Level 3 inputs. Goodwill for the Sid Wainer acquisition will be amortized over 15 years for tax purposes. The goodwill recorded primarily reflects the value of acquiring an established specialty food and produce distributor to leverage the Company’s existing products in the markets served by Sid Wainer, to supply Sid Wainer’s produce offerings to our New York market and any intangible assets that do not qualify for separate recognition. The Company reflected net sales of $25,751 and an operating loss of $1,105 for Sid Wainer in its consolidated statement of operations for the thirteen weeks ended March 27, 2020.

The table below presents unaudited pro forma consolidated income statement information of the Company as if the Sid Wainer acquisition had occurred on December 29, 2018. 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 acquisition. The pro forma information is not necessarily indicative of the Company’s results of operations had the acquisition 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 acquisition, any incremental costs for Sid Wainer transitioning to become a public company, and also does not reflect additional revenue opportunities following the acquisition. The pro forma information reflects amortization and depreciation of the Sid Wainer acquisition at their respective fair values.

Thirteen Weeks Ended
March 27, 2020 —
March 29, 2019
Net sales $ 388,209
$ 402,074
Loss before income taxes (23,187 ) (439 )

~~Additionally, during the quarter ended March 27, 2020, the Company paid approximately $17,000 for a specialty center-of-the plate distributor in New England.~~

~~The table below sets forth the purchase price allocation of these acquisitions:~~

Sid Wainer Other Acquisitions
Current assets $ 24,735
$ 6,790
Customer relationships —
6,200
Trademarks 3,500
700
Goodwill 9,645
5,131
Fixed assets 21,055
503
Right-of-use assets 8,259
1,019
Lease liabilities (8,259 ) (1,019 )
Current liabilities (10,404 ) (941 )
Earn-out liability (2,081 ) (1,383 )
Total consideration $ 46,450
$ 17,000

~~The Company recognized professional fees of $435 in~~ ~~operating expenses~~ ~~related to the acquisitions in the first quarter of fiscal 2020.~~

~~Note 6~~ – Inventories

Note 76 – Equipment, Leasehold Improvements and Software



	Useful Lives	March 26, 2021		December 25, 2020
Land	Indefinite	$	5,020	$	5,020
Buildings	20 years	15,685		15,685
Machinery and equipment	5 - 10 years	25,116		24,900
Computers, data processing and other equipment	3 - 7 years	14,328		14,207
Software	3 - 7 years	41,273		33,063
Leasehold improvements	1 - 40 years	68,855		68,747
Furniture and fixtures	7 years	3,418		3,412
Vehicles	5 - 7 years	21,926		21,873
Other	7 years	88		88
Construction-in-process		2,435		8,115
		198,144		195,110
Less: accumulated depreciation and amortization		(84,694)		(79,662)
Equipment, leasehold improvements and software, net		$	113,450	$	115,448

Useful Lives March 27, 2020 December 27, 2019
Land Indefinite $ 5,020
$ 1,170
Buildings 20 years 15,871
1,360
Machinery and equipment 5-10 years 25,881
21,718
Computers, data processing and other equipment 3-7 years 13,653
12,686
Software 3-7 years 29,331
29,305
Leasehold improvements 1-40 years 71,297
70,903
Furniture and fixtures 7 years 3,322
3,309
Vehicles 5-7 years 19,464
6,410
Other 7 years 95
95
Construction-in-process 9,772
9,200
193,706
156,156
Less: accumulated depreciation and amortization (68,071 ) (63,310 )
Equipment, leasehold improvements and software, net $ 125,635
$ 92,846

~~The components of depreciation and amortization expense were as follows:~~

Thirteen Weeks Ended
March 27, 2020 March 29, 2019
Depreciation expense $ 3,568
$ 1,973
Software amortization $ 1,194
$ 908
$ 4,762
$ 2,881

The net book value of equipment financed under finance leases at March ~~27, 2020~~26, 2021 and December ~~27, 2019~~25, 2020 was ~~$16,337~~$15,592 and ~~$3,905,~~$14,705, respectively.


	Thirteen Weeks Ended
	March 26, 2021		March 27, 2020
Depreciation expense	$	3,935	$	3,568
Software amortization	$	1,172	$	1,194
	$	5,107	$	4,762

Note 87 – Goodwill and Other Intangible Assets

COVID-19 has had a material impact on the Company’s customers. In an effort to limit the spread of the virus, federal, state and local governments have implemented measures that have resulted in the closure of non-essential businesses in many of the markets the Company serves, which has forced its customers in those markets to either transition their establishments to take-out service, delivery service or temporarily cease operations. These actions have led to a significant decrease in demand for the Company’s products. The adverse impact to the Company’s customer base and its market capitalization were triggering events and accordingly, the Company performed interim goodwill and long-lived asset quantitative impairment tests as of March 27, 2020.

~~Goodwill Impairment Test~~

The Company estimated the fair value of its reporting units using an income approach that incorporates the use of a discounted cash flow model that involves many management assumptions that are based upon future growth projections which include estimates of COVID-19’s impact on our business. Assumptions include estimates of future revenues, growth rates which take into account estimated inflation rates, estimates of future levels of gross profit and operating profit, projected capital expenditures and discount rates based upon industry and competitor analyses. On the basis of these assumptions, the Company determined that the fair values of its reporting units exceeded the net carry values of their assets and liabilities by approximately $400,000, $19,000 and $14,000 for the East Coast, Midwest and West Coast reporting units, respectively. As such, goodwill was not impaired.

~~Long-lived Impairment Test~~

Long-lived assets, including other intangible assets, were tested for recoverability at the asset group level. The Company estimated the net undiscounted cash flows expected to be generated from the asset group over the expected useful of the asset group’s primary asset. Key assumptions include future revenues, growth rates, estimates of future levels of gross profit and operating profit and projected capital expenditures necessary to maintain the operating capacity of each asset group. On the basis of these assumptions, the Company determined that the undiscounted cash flows for each of the Company’s asset groups exceeded their respective carry values and therefore long-lived assets were not impaired.

Although the interim quantitative goodwill and long-lived asset impairment tests indicated no impairment existed as of March 27, 2020, the impacts of COVID-19 on our business are uncertain and will depend on future developments, and as such, it is possible that another triggering event could occur that under certain circumstances could cause us to recognize an impairment charge in the future.






Carrying amount as of December 25, 2020	$	214,864


Foreign currency translation	24
Carrying amount as of March 26, 2021	$	214,888

Carrying amount as of December 27, 2019 $ 197,743
Acquisitions 14,776
Foreign currency translation (9 )
Carrying amount as of March 27, 2020 $ 212,510

Other intangible assets consist of customer relationships being amortized over a period ranging from four to twenty years, trademarks being amortized over a period of one to forty years, and non-compete agreements being amortized over a period of two to six years.


March 26, 2021	Gross Carrying Amount		Accumulated Amortization		Net Amount
Customer relationships	$	141,701	$	(57,616)	$	84,085
Non-compete agreements	8,579		(7,818)		761
Trademarks	44,539		(21,166)		23,373
Total	$	194,819	$	(86,600)	$	108,219

December 27, 2019
Customer relationships $ 135,226
$ (45,454 ) $ 89,772
Non-compete agreements 8,579
(7,479 ) 1,100
Trademarks 64,505
(16,626 ) 47,879
Total $ 208,310
$ (69,559 ) $ 138,751

The Company occasionally makes small, tuck-in acquisitions that are immaterial, both individually and in the aggregate. Therefore, increases in goodwill and gross intangible assets per the above tables may not agree to the increases of these assets as shown for specific acquisitions in Note 5 “Acquisitions.”

Estimated amortization expense for other intangible assets for the remainder of the fiscal year ending December ~~25, 2020~~24, 2021 and each of the next four fiscal years and thereafter is as follows:


2021	$	9,254
2022	11,555
2023	10,525
2024	9,921
2025	9,488
Thereafter	57,476
Total	$	108,219

2020 $ 9,956
2021 13,270
2022 12,490
2023 11,463
2024 11,119
Thereafter 87,454
Total $ 145,752

Note 98 – Debt Obligations


	March 26, 2021		December 25, 2020
Senior secured term loans	$	169,959	$	201,553
Convertible senior notes	200,000		150,000
Asset-based loan facility	20,000		40,000
Finance lease and other financing obligations	16,434		15,798
Convertible unsecured note	4,000		4,000


Deferred finance fees and original issue premium (discount)	(7,861)		(7,172)
Total debt obligations	402,532		404,179
Less: current installments	(6,043)		(6,095)
Total debt obligations excluding current installments	$	396,489	$	398,084

March 27, 2020 December 27, 2019
Senior secured term loan $ 238,129
$ 238,129
Convertible senior notes 150,000
150,000
Asset-based loan facility 100,000
—
Convertible unsecured note 4,000
4,000
Finance lease and other financing obligations 16,337
3,905
Deferred finance fees and original issue discount (8,537 ) (9,207 )
Total debt obligations 499,929
386,827
Less: current installments (4,069 ) (721 )
Total debt obligations excluding current installments $ 495,860
$ 386,106


	March 26, 2021		December 25, 2020
Principal amount outstanding	$	200,000	$	150,000
Unamortized deferred financing fees and premium	(3,814)		(4,999)
Net carry value	$	203,814	$	154,999


	Thirteen Weeks Ended
	March 26, 2021		March 27, 2020
Coupon interest	$	781	$	703
Amortization of deferred financing fees and premium	$	241	$	250
Total interest	$	1,022	$	953

~~5.1%~~ ~~and 1.9%, respectively, at March 27, 2020.~~

Note 109 – Stockholders’ Equity

~~Preferred Stock Purchase Rights~~

On March 22, 2020, the Company’s board of directors approved a limited duration Preferred Stock Purchase Rights Agreement (the “Rights Agreement”). Under the Rights Agreement, the board of directors approved a dividend of one preferred share purchase right (a “Right”) for each share outstanding share of the Company’s common stock to purchase one one-thousandth of a share of Series A Preferred Stock of the Company at a price of $40.00 per Unit of Preferred Stock, subject to adjustment as provided in the Rights Agreement. The Rights will expire on March 21, 2021, unless the Rights are earlier redeemed or exchanged by the Company or upon the occurrence of certain transactions.


	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 25, 2020	901,318	$	16.14	0	$	0	26,952	$	30.16
Granted	276,891	31.85		199,231	32.00		199,241	32.00
Vested	(479,790)	11.45		0	0		0	0
Forfeited	(1,933)	18.51		0	0		0	0
Unvested at March 26, 2021	696,486	$	25.59	199,231	$	32.00	226,193	$	31.78

Shares
Weighted Average
Grant Date Fair Value
Unvested at December 27, 2019 740,609
$ 27.68
Granted 822,134
18.57
Vested (192,357 ) 23.89
Forfeited (14,701 ) 22.06
Unvested at March 27, 2020 1,355,685
$ 22.76

At March 27, 2020, respectively.

~~The Company’s stock options fully vested during the first quarter of fiscal 2019. The Company recognized expense $114 on stock options during the thirteen weeks ended March 29, 2019.~~ NaN share-based compensation expense related to the Company’s RSAs or stock options has been capitalized.

As of March ~~27, 2020,~~26, 2021, there were ~~1,414,655~~889,294 shares available for grant under the 2019 Omnibus Equity Incentive Plan.

Note ~~11 – Income Taxes~~

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law on March 27, 2020. The legislation provides temporary changes to the extent to which companies can carryback net operating losses, changes to interest expense deduction limitations and other tax relief provisions.

The Company’s effective income tax rate was 36.5% and 27.5% for the thirteen weeks ended March 27, 2020 and March 29, 2019, respectively. The higher effective tax rate in the current period is primarily related to the Company’s current net loss forecast for fiscal 2020 which, under the CARES Act, allows the Company to claim tax refunds against taxes paid in fiscal 2015 and 2017, both of which were at statutory tax rates of 35%. The Company recorded an income tax refund receivable of $8,762 as of March 27, 2020 which is reflected in ~~prepaid expenses and other current assets~~ ~~on the Company’s consolidated balance sheet.~~

~~Note 12~~10 – Related Parties

Note 1311 – Supplemental Disclosures of Cash Flow Information


	Thirteen Weeks Ended
	March 26, 2021		March 27, 2020
Supplemental cash flow disclosures:
Cash paid for income taxes, net of cash received	$	(237)	$	334
Cash paid for interest, net of cash received	$	2,929	$	2,883
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,369	$	6,700
Operating cash flows from finance leases	$	145	$	111
ROU assets obtained in exchange for lease liabilities:
Operating leases	$	14	$	4,989
Finance leases	$	162	$	13,208
Other non-cash investing and financing activities:







Contingent earn-out liabilities for acquisitions	$	0	$	3,464

Thirteen Weeks Ended
March 27, 2020 March 29, 2019
Supplemental cash flow disclosures:
Cash paid for income taxes, net of cash received $ 334
$ 964
Cash paid for interest, net of cash received $ 2,883
$ 5,271
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 6,700
$ 5,890
Operating cash flows from finance leases $ 111
$ 17
ROU assets obtained in exchange for lease liabilities:
Operating leases $ 4,989
$ 131,819
Finance leases $ 13,208
$ 854
Other non-cash investing and financing activities:
Convertible notes issued for acquisitions $ —
$ 4,000
Contingent earn-out liabilities for acquisitions $ 3,464
$ 4,080

Note 1412 – Subsequent Events

On April 16, 2020, the White House Coronavirus Task Force released guidelines for a three-phased approach to reopening the U.S. economy. The guidelines were issued to help state and local governments plan for a responsible reopening of their economies along with certain health and safety precautions. Certain state governors, including those of Florida, Ohio and Texas, markets in which we operate, announced phased reopenings of their economies in May 2020. The timing of a broad reopening of the U.S. economy cannot be predicted at this time nor can COVID-19’s impact on future consumer spending behavior. The Company continues to support its customer base as they serve their communities while managing its liquidity effectively during this time of demand uncertainty. As of April 30, 2020, the Company had cash and cash equivalents of approximately $200,000 and availability on its asset-based loan facility of $33,359.

performance targets.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Effect of the COVID-19 Pandemic on our Business and Operations

Our management team is responding rapidly to the changing landscape and pursuing alternate sources of revenue to mitigate the extent of sales declines in our core customer base. Our sales force is working closely with our core customers and developing solutions to help them fulfill the demand in their communities whilst complying with health and safety restrictions. We are actively entering into new business relationships with retail food outlets as they experience a sharp increase in demand. As we develop these new sales channels, we are negotiating favorable credit terms given the nature of the underlying customer base and the current market environment. In addition, our purchasing teams have worked diligently to shift our product purchases to SKUs that are in high demand. Thus far, we have not experienced difficulties in procuring products from our suppliers.

In response to the pandemic, we expanded our direct-to-consumer product offerings by launching our “Shop Like a Chef” online home delivery platform in several of the markets we serve. We now offer products directly to consumers through our Allen Brothers and “Shop Like a Chef” online platforms.

We have implemented cost control measures during this time of demand volatility. Our variable cost structure naturally decreases as our sales decrease, however, we are also reducing our fixed cost structure. Among other actions, we have postponed planned capital expenditures, returned certain equipment on short-term rental agreements, and reduced compensation expense through salary reductions, furloughs and lay-offs as we right-size our organization to current levels of demand.

~~Management determined COVID-19’s adverse~~The Pandemic’s impact on our ~~operations and our market capitalization were triggering events that required us to test goodwill and long-lived assets for impairment as~~net sales was the most significant at the inception of ~~March 27, 2020. No impairments were recorded as a result of these tests. However,~~ the impacts of COVID-19 on our business are uncertain and will depend on future developments, and as such, it is possible that another triggering event could occur that under certain circumstances could cause us to recognize an impairment chargePandemic in the ~~future.~~

~~We closed~~United States and Canada during the second quarter ~~with total cash and cash equivalents~~ of ~~$193.5 million, inclusive of a $100.0 million draw on our asset-based loan facility on March 18,~~ 2020. Subsequent to this draw, we had approximately $33.4 million of remaining availability under our asset-based loan facility as of March 27, 2020. We are actively monitoring our working capital to effectively manage our liquidity during this time of uncertainty and expect to use the proceeds of the draw, if any, to rescale our business when demand returns.

The future impact of ~~COVID-19~~the Pandemic on our business, operations and liquidity is difficult to predict at this time and is highly dependent ~~upon decisions made by~~on future developments including new information that may emerge on the severity of the disease, the extent of the outbreak, federal, state and local ~~governments~~government responses, trends in infection rates, development of effective medical treatments for the disease, and future consumer spending ~~behavior.~~behavior, among others.

~~Recent Acquisitions~~

~~On February 3, 2020, the Company entered into an asset purchase agreement to acquire substantially all~~The future impact of the ~~assets of Cambridge Packing Co, Inc., a specialty center-of-the-plate producer~~Pandemic on our business, operations and ~~distributor in New England. The purchase price was approximately $17.0 million paid in cash~~liquidity is difficult to predict at ~~closing~~this time and is subject to a customary working capital true-up. The Company is required to pay additional contingent consideration, if earned, of up to $3.0 million over a two-year period upon successful attainment of certain gross profit targets.

~~On January 27, 2020,~~highly dependent on future developments including new information that may emerge on the ~~Company entered into an asset purchase agreement to acquire substantially all~~severity of the ~~assets, including certain real-estate assets,~~disease, the extent of ~~Sid Wainer & Son, a specialty food~~outbreaks, federal, state and ~~produce distributor~~local government responses, trends in ~~New England. The purchase price was approximately $46.5 million paid in cash at closing~~infection rates, development of effective medical treatments for the disease, the pace of vaccination programs and is subject to a customary working capital true-up. The Company is required to pay additional contingent consideration, if earned, of up to $4.0 million over a two-year period upon successful attainment of certain gross profit targets.future consumer spending behavior, among others.


	Thirteen Weeks Ended
	March 26, 2021		March 27, 2020
Net sales	$	280,217	$	375,431
Cost of sales	221,270		289,943
Gross profit	58,947		85,488
Selling, general and administrative expenses	80,245		108,882
Other operating (income) expenses, net	(1,170)		(6,336)
Operating loss	(20,128)		(17,058)


Interest expense	4,763		5,124
Loss before income taxes	(24,891)		(22,182)
Provision for income tax benefit	(6,970)		(8,097)
Net loss	$	(17,921)	$	(14,085)

Thirteen Weeks Ended
March 27, 2020 March 29, 2019
Net sales $ 375,431
$ 357,027
Cost of sales 284,530
266,838
Gross profit 90,901
90,189
Operating expenses 107,917
84,039
Operating (loss) income (17,016 ) 6,150
Interest and other expense 5,166
4,585
(Loss) income before income taxes (22,182 ) 1,565
Provision for income taxes (8,097 ) 431
Net (loss) income $ (14,085 ) $ 1,134

Thirteen Weeks Ended March ~~27, 2020~~26, 2021 Compared to Thirteen Weeks Ended March ~~29, 2019~~27, 2020

Net Sales


	2021		2020		$ Change		% Change
Net sales	$	280,217	$	375,431	$	(95,214)	(25.4)	%

2020 2019 $ Change % Change
Net sales $ 375,431
$ 357,027
$ 18,404
5.2 %

Sales growth from acquisitions contributed ~~$41.9~~$9.8 million, or ~~11.8%~~2.6%, to sales growth. Organic sales declined ~~$23.5~~$105.0 million, or ~~6.6%~~28.0%, versus the prior year period primarily due to impacts of ~~COVID-19.~~the Pandemic. Organic case count declined approximately ~~5.0%~~39.4% in our specialty category. In addition, specialty unique customers and placements declined ~~1.9%~~22.3% and ~~9.6%~~34.1%, respectively, compared to the prior year period. Pounds sold in our center-of-the-plate category decreased ~~10.0%~~27.6% compared to the prior year. Estimated ~~deflation~~inflation was ~~2.1%~~6.4% in our specialty category and ~~inflation was 3.1%~~6.1% in our center-of-the-plate category compared to the prior year period.

Gross Profit


	2021		2020		$ Change	% Change
Gross profit	58,947		85,488		(26,541)	(31.0)	%
Gross profit margin	21.0	%	22.8	%

2020 2019 $ Change % Change
Gross profit $ 90,901
$ 90,189
$ 712
0.8 %
Gross profit margin 24.2 % 25.3 %

Gross profit ~~was relatively unchanged versus~~declined primarily as a result of reduced sales due to the ~~prior year quarter despite~~impacts of the ~~increase in net sales.~~Pandemic. Gross profit margin decreased approximately ~~105~~173 basis points. Gross profit margins decreased ~~311~~24 basis points in the Company’s specialty category predominately due to cost inflation and ~~increased 157~~unfavorable sales mix. Gross profit margins decreased 253 basis points in the Company’s center-of-the-plate category ~~compared~~due to cost inflation and unfavorable sales mix.

Selling, General and Administrative Expenses


	2021		2020		$ Change	% Change
Selling, general and administrative expenses	80,245		108,882		(28,637)	(26.3)	%
Percentage of net sales	28.6	%	29.0	%

The decrease in selling, general and administrative expenses was primarily due to lower costs associated with compensation and benefits and lower general and administrative related costs in the quarter. The prior year ~~period. Our specialty category gross profit results include~~quarter includes a charge of approximately $3.3 million related to estimated inventory losses from obsolescence due to impacts of COVID-19. Center-of-the-plate category gross profit was favorably impacted by a greater mix of retail sales in the current year period.

~~Operating Expenses~~

2020 2019 $ Change % Change
Operating expenses 107,917
84,039
$ 23,878
28.4 %
Percentage of net sales 28.7 % 23.5 %

~~The increase in operating expenses relates primarily to our recent acquisitions and an~~non-recurring estimated non-cash charge of approximately $15.8 million related to incremental bad debt expense ~~as a result COVID-19, partially offset by a~~at the onset of the Pandemic. Our ratio of selling, general and administrative expenses to net sales was relatively unchanged.

Other Operating (Income) Expense, Net


	2021	2020	$ Change	% Change
Other operating (income) expense, net	(1,170)	(6,336)	5,166	(81.5)	%

The decrease in ~~non-cash charges~~other operating income was primarily due to ~~changes in the fair value~~non-cash credits of ~~our contingent earn-out liabilities. Total operating expenses~~$1.3 million for ~~the thirteen weeks ended March 27, 2020 includes a $6.8 million credit due to a reduction~~changes in the fair value of our contingent earn-out liabilities compared to ~~a charge~~non-cash credits of ~~$0.1~~$6.8 million ~~for~~in the ~~thirteen weeks ended March 29, 2019. Our ratio of operating expenses to net sales was higher~~prior year period.

Interest Expense


	2021	2020	$ Change	% Change
Interest expense	4,763	5,124	(361)	(7.0)	%

Interest expense decreased slightly as a result of ~~adverse COVID-19 impacts to~~lower average long-term debt balances in the first quarter of fiscal 2021, primarily the result of the reduction of principal outstanding on our ~~sales growth~~senior secured term loan and ~~a 467 basis point increase in non-cash charges related to bad debt expense,~~asset-based loan facility, partially offset by ~~a 184 basis point decrease in non-cash charges related to changes in~~ the ~~fair value~~issuance of ~~our contingent earn-out liabilities.~~an additional $50.0 million of convertible senior notes.

~~Interest and Other Expense~~

2020 2019 $ Change % Change
Interest and other expense 5,166
4,585
$ 581
12.7 %

Interest and other expense increased primarily due to the interest charged on our Convertible Senior Notes issued on November 22, 2019 and the $100.0 million draw on our asset-based loan facility on March 18, 2020, partially offset by lower effective interest rates charged on our outstanding debt.

Provision for Income Taxes


	2021		2020		$ Change	% Change
Provision for income tax benefit	(6,970)		(8,097)		1,127	(13.9)	%
Effective tax rate	28.0	%	36.5	%

2020 2019 $ Change % Change
Provision for income taxes (8,097 ) 431
$ (8,528 ) (1,978.7 )%
Effective tax rate 36.5 % 27.5 %

The higher effective tax rate in fiscal 2020 is primarily related to our ~~current~~ net loss forecast for fiscal 2020 which ~~allows~~allowed us to claim tax refunds against taxes paid in fiscal 2015 and 2017, both of which were at statutory tax rates of 35%.

LIQUIDITY AND CAPITAL RESOURCES

We finance our day-to-day operations and growth primarily with cash flows from operations, borrowings under our senior secured credit facilities and other indebtedness, operating leases, trade payables and equity financing.

Indebtedness

The following table presents selected financial information on our indebtedness (in thousands):


	March 26, 2021		December 25, 2020
Senior secured term loan	$	169,959	$	201,553
Total convertible debt	204,000		154,000
Borrowings outstanding on asset-based loan facility	20,000		40,000
Finance leases and other financing obligations	16,434		15,798
Total	$	410,393	$	411,351

March 27, 2020 December 27, 2019
Senior secured term loan $ 238,129
$ 238,129
Total convertible debt $ 154,000
$ 154,000
Borrowings outstanding on asset-based loan facility $ 100,000
$ —
Finance leases and other financing obligations $ 16,337
$ 3,905

As of March ~~27, 2020,~~26, 2021, we have various floating- and fixed-rate debt instruments with varying maturities for an aggregate principal amount of ~~$492.1~~$394.0 million.

On March 1, 2021, the we issued $50.0 million aggregate principal amount of 1.875% Convertible Senior Notes at a premium which were offered as an additional issuance of our $150.0 million Convertible Senior Notes due 2024 issued on November 22, 2019. Net proceeds were used to repay all outstanding borrowings under the our 2022 tranche of senior secured term loans of $31.2 million and repay a portion of borrowings outstanding under our asset-based loan facility. We incurred transaction costs of approximately $1.4 million which were capitalized as deferred financing fees to be amortized over the term of the underlying debt.

Liquidity

The following table presents selected financial information on liquidity (in thousands):



	March 26, 2021		December 25, 2020
Cash and cash equivalents	$	175,000	$	193,281
Working capital, excluding cash and cash equivalents	94,070		94,279
Availability under asset-based loan facility	53,817		50,282
Total	$	322,887	$	337,842

March 27, 2020 December 27, 2019
Cash and cash equivalents $ 193,517
$ 140,233
Working capital,excluding cash and cash equivalents
$ 146,746
$ 162,772
Availability under asset-based loan facility $ 33,359
$ 133,359

We ~~anticipate~~are not providing guidance on our capital expenditures ~~excluding cash paid for acquisitions,~~ for fiscal 2020 will be in the range of $10.0 million to $12.0 million which is down from our original estimate of $38.0 million to $42.0 million. The decrease is a result of us postponing certain investments2021 due to ~~COVID-19.~~the continued uncertainty with regards to the pace of the economic recovery and the duration of the Pandemic related restrictions on our customers. We believe our existing balances of cash and cash equivalents, working capital and the availability under our asset-based loan facility, are sufficient to satisfy our working capital needs, capital expenditures, debt service and other liquidity requirements associated with our current operations over the next 12 months.

Cash Flows

Thirteen Weeks Ended
March 27, 2020 March 29, 2019
Net (loss) income $ (14,085 ) $ 1,134
Non-cash charges $ 19,678
$ 9,855
Changes in working capital $ 16,392
$ (3,598 )
Cash provided by operating activities $ 21,985
$ 7,391
Cash used in investing activities $ (66,543 ) $ (32,115 )
Cash provided by (used in) financing activities $ 97,975
$ (367 )
The following table presents selected financial information on cash flows (in thousands):


	Thirteen Weeks Ended
	March 26, 2021		March 27, 2020
Net loss	$	(17,921)	$	(14,085)
Non-cash charges	$	5,298	$	19,678
Changes in working capital	$	960	$	16,392
Cash (used in) provided by operating activities	$	(11,663)	$	21,985
Cash used in investing activities	$	(2,896)	$	(66,543)
Cash (used in) provided by financing activities	$	(3,726)	$	97,975

Net cash ~~provided by~~used in operations was ~~$22.0~~$11.7 million for the thirteen weeks ended March ~~27, 2020~~26, 2021 consisting of a net loss of ~~$14.1~~$17.9 million offset by ~~$19.7~~$5.3 million of non-cash charges and cash generated from working capital of ~~$16.4~~$1.0 million. ~~The increase~~Non-cash charges decreased $14.4 million primarily due to a $15.8 million charge incurred in ~~non-cash charges of $9.8 million is primarily driven by an increase in non-cash~~the prior year quarter related to incremental bad debt expense due to ~~COVID-19, partially offset by a $6.8 million credit due to~~ the ~~reduction in~~onset of the ~~fair value of our contingent earn-out liabilities.~~Pandemic. The cash generated from working capital ~~increase~~decrease of ~~$20.0~~$15.4 million is primarily driven by ~~a $19.4 million increase from accounts receivable.~~the impacts of reduced demand due to the Pandemic.

Net cash used in investing activities was ~~$66.5~~$2.9 million for the thirteen weeks ended March ~~27, 2020,~~26, 2021, driven by ~~$63.5 million in cash used to fund acquisitions and $3.1 million in~~ capital expenditures which included implementations of our Enterprise Resource Planning ~~system.~~system and the build-out of our Los Angeles distribution facility.

Net cash ~~provided by~~used in financing activities was ~~$98.0~~$3.7 million for the thirteen weeks ended March ~~27, 2020,~~26, 2021, driven by $32.8 million of payments made on senior term loans and finance lease obligations and a ~~$100.0~~$20.0 million ~~draw~~payment on our asset-based loan ~~facility.~~facility, partially offset by $51.8 million of proceeds from the issuance of additional convertible senior notes.

Seasonality

Excluding our direct-to-consumer business, we generally do not experience any material seasonality. However, our sales and operating results may vary from quarter to quarter due to factors such as changes in our operating expenses, management’s ability to execute our operating and growth strategies, personnel changes, demand for our products, supply shortages, weather patterns and general economic conditions.

Our direct-to-consumer business is subject to seasonal fluctuations, with direct-to-consumer center-of-the-plate protein sales typically higher during the holiday season in our fourth quarter; accordingly, a disproportionate amount of operating cash flows from this portion of our business is generated by our direct-to-consumer business in the fourth quarter of our fiscal year. Despite a significant portion of these sales occurring in the fourth quarter, there are operating expenses, principally advertising and promotional expenses, throughout the year.

The Pandemic has had a material impact on our business and operations and those of our customers. Our net sales were most significantly impacted during the second quarter of fiscal 2020 when, in an effort to limit the spread of the virus, federal, state and local governments began implementing various restrictions that resulted in the closure of non-essential businesses in many of the markets we serve, which forced our customers in those markets to either transition their establishments to take-out service, delivery service or temporarily cease operations.

Inflation

Our profitability is dependent on, among other things, our ability to anticipate and react to changes in the costs of key operating resources, including food and other raw materials, labor, energy and other supplies and services. Substantial increases in costs and expenses could impact our operating results to the extent that such increases cannot be passed along to our customers. The impact of inflation and deflation on food, labor, energy and occupancy costs can significantly affect the profitability of our operations.

Off-Balance Sheet Arrangements

As of March ~~27, 2020,~~26, 2021, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.

Critical Accounting Policies and Estimates

The preparation of the Company’s consolidated financial statements requires it to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The SEC has defined critical accounting policies as those that are both most important to the portrayal of the Company’s financial condition and results and require its most difficult, complex or subjective judgments or estimates. Based on this definition, we believe our critical accounting policies include the following: (i) determining our allowance for doubtful accounts, (ii) inventory valuation, with regard to determining inventory balance adjustments for excess and obsolete inventory, (iii) business combinations, (iv) valuing goodwill and intangible assets, (v) ~~vendor rebates and other promotional incentives, (vi)~~ self-insurance reserves, ~~(vii)~~(vi) accounting for income taxes and ~~(viii)~~(vii) contingent earn-out liabilities. Our critical accounting policies and estimates are described in the Form 10-K filed with the SEC on February ~~24, 2020. Pursuant to our adoption of Accounting Standards Update 2016-13~~ 23, 2021.

~~Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments~~ ~~on December 28, 2019, our accounting policy for determining our allowance for doubtful accounts has been changed as follows:~~

~~Allowance for Doubtful Accounts~~

We analyze customer creditworthiness, accounts receivable balances, payment history, payment terms and historical bad debt levels when evaluating the adequacy of our allowance for doubtful accounts. In instances where a reserve has been recorded for a particular customer, future sales to the customer are either conducted using cash-on-delivery terms or the account is closely monitored so that agreed-upon payments are received prior to orders being released. A failure to pay results in held or cancelled orders. We also estimate receivables that will ultimately be uncollectible based upon historical write-off experience. Management incorporates current macro-economic factors in existence as of the balance sheet date that may impact the food-away-from-home industry and/or its customers, and specifically in the first quarter of fiscal 2020 the impact of the COVID-19 pandemic. We may be required to increase or decrease our allowance for doubtful accounts due to various factors, including the overall economic environment and particular circumstances of individual customers.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

As of March ~~27, 2020,~~26, 2021, we had an aggregate ~~$338.1~~$190.0 million of indebtedness outstanding under the Term Loan and ABL Facility that bore interest at variable rates. A 100 basis point increase in market interest rates would decrease our after tax earnings by approximately ~~$2.1~~$1.4 million per annum, holding other variables constant.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of March ~~27, 2020.~~26, 2021.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended March ~~27, 2020~~26, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in legal proceedings, claims and litigation arising out of the ordinary conduct of our business. Although we cannot assure the outcome, management presently believes that the result of such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on our consolidated financial statements, and no material amounts have been accrued in our consolidated financial statements with respect to these matters.

ITEM 1A. RISK FACTORS

Except as stated below, there have been no material changes to our risk factors as previously disclosed in Part I, Item 1A. included in our Annual Report on Form 10-K for the year ended December ~~27, 2019~~25, 2020 filed with the SEC on February ~~24, 2020.~~23, 2021. In addition to the information contained herein, you should consider the risk factors disclosed in our Annual Report on Form 10-K.

~~Significant public health epidemics or pandemics, including COVID-19, may adversely affect our business, results of operations and financial condition.~~

A public health epidemic or pandemic can significantly impact our business or those of our core customers or suppliers, particularly if located in geographies in which we have significant operations. Such events could significantly impact the food-away-from-home industry and other industries that are sensitive to changes in consumer discretionary spending habits. In addition, our operations could be disrupted if we were required to quarantine employees that work at our various distribution centers and processing facilities.

For instance, the recent outbreak of COVID-19 and its development into a pandemic is resulting in governmental authorities in many locations where we operate, and in which our customers are present and suppliers operate, to impose mandatory closures, seek voluntary closures and impose restrictions on, or advisories with respect to, travel, business operations and public gatherings or interactions. Among other matters, these actions have required or strongly urged various venues where foodservice products are served, including restaurants and hotels, to reduce or discontinue operations, which has and will continue to adversely affect demand in the foodservice industry, including demand for our products and services. In addition, the perceived risk of infection and health risk associated with COVID-19, and the illness of many individuals across the globe, is resulting in many of the same effects intended by such governmental authorities to stop the spread of COVID-19. These events have had, and could continue to have, an adverse impact on numerous aspects of our business, financial condition and results of operations including, but not limited to, our growth, product costs, supply chain disruptions, labor shortages, logistics constraints, customer demand for our products and industry demand generally, consumer spending, our liquidity, the price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally. The extent to which the COVID-19 pandemic impacts our financial condition or results of operations is uncertain and will depend on future developments including new information that may emerge on the severity of the disease, the extent of the outbreak, and federal, state and local government responses, among others.

ITEM 2. ~~UNREGISTERD~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


	Total Number of Shares Repurchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs
December 26, 2020 to January 22, 2021	—	$	—	—	—
January 23, 2021 to February 19, 2021	—	—		—	—
February 20, 2021 to March 26, 2021	38,503	29.51		—	—
Total	38,503	$	29.51	—	—

(1)During the thirteen weeks ended March 26, 2021, we withheld 38,503 shares of our common stock to satisfy tax withholding requirements related to restricted shares of our common stock awarded to our officers and key employees resulting from either elections under 83(b) of the Internal Revenue Code of 1986, as amended, or upon vesting of such awards.

Total Number
of Shares
Repurchased(1)

Average
Price
Paid Per Share

Total
Number of Shares
Purchased as Part
of Publicly
Announced Plans
or Programs

Maximum
Number (or
Approximate
Dollar Value) of
Shares That May
Yet Be Purchased
Under the Plans
or Programs
December 28, 2019 to January 24, 2020 —
$ —
—
—
January 25, 2020 to February 21, 2020 22,899
37.28
—
—
February 22, 2020 to March 27, 2020 136,733
13.50
—
—
Total 159,632
$ 16.91
—
—


~~(1)~~	During the thirteen weeks ended March 27, 2020, we withheld 159,632 shares of our common stock to satisfy tax withholding requirements related to restricted shares of our common stock awarded to our officers and key employees resulting from either elections under 83(b) of the Internal Revenue Code of 1986, as amended, or upon vesting of such awards.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS


Exhibit No.		Description


~~Exhibit No.~~		~~Description~~












~~3.1~~31.1		~~Certificate of Designation of the Voting Powers, Designation, Preferences and Relative, Participating,~~ ~~Optional or Other Special Rights and Qualifications, Limitations and Restrictions of the Series A~~ ~~Preferred Stock of The Chefs’ Warehouse, Inc. (incorporated by reference to Exhibit 3.1 to the~~ ~~Company’s Form 8-K filed on March 23, 2020)~~

~~4.1~~	Rights Agreement, dated as of March 22, 2020, between The Chefs’ Warehouse, Inc. and American Stock Transfer & Trust Company, LLC, as Rights Agent (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on March 23, 2020)

~~10.1~~	Form of Restricted Share Award Agreement under The Chefs’ Warehouse, Inc. 2019 Omnibus Equity Incentive Plan*

~~10.2~~	The Chefs’ Warehouse, Inc. Executive Change in Control Plan*

~~10.3~~	Form of Executive Severance Agreement*

~~31.1~~	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document – the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

* Compensatory Plan or Arrangement

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on ~~May 6, 2020.~~

April 28, 2021.



									THE CHEFS’ WAREHOUSE, INC.
									(Registrant)

Date: ~~May 6, 2020~~April 28, 2021									/s/ James Leddy
									James Leddy
									Chief Financial Officer
									(Principal Financial Officer)

Date: ~~May 6, 2020~~April 28, 2021									/s/ Timothy McCauley
									Timothy McCauley
									Chief Accounting Officer
									(Principal Accounting Officer)



	March 27, 2020 (unaudited)			December 27, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	193,517		$	140,233
Accounts receivable, net of allowance of $25,618 in 2020 and $8,846 in 2019	144,263			175,044
Inventories, net	129,999			124,056
Prepaid expenses and other current assets	24,914			13,823
Total current assets	492,693			453,156
Equipment, leasehold improvements and software, net	125,635			92,846
Operating lease right-of-use assets	127,255			127,649
Goodwill	212,510			197,743
Intangible assets, net	145,752			138,751
Other assets	3,069			3,534
Total assets	$	1,106,914		$	1,013,679
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	92,621		$	94,097
Accrued liabilities	29,477			29,847
Short-term operating lease liabilities	18,091			17,453
Accrued compensation	8,172			8,033
Current portion of long-term debt	4,069			721
Total current liabilities	152,430			150,151
Long-term debt, net of current portion	495,860			386,106
Operating lease liabilities	119,786			120,572
Deferred taxes, net	8,983			10,883
Other liabilities and deferred credits	10,238			10,034
Total liabilities	787,297			677,746
Commitments and contingencies
Stockholders’ equity:
Preferred Stock - $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding at March 27, 2020 and December 27, 2019	—			—
Common Stock, - $0.01 par value, 100,000,000 shares authorized, 30,989,742 and 30,341,941 shares issued and outstanding at March 27, 2020 and December 27, 2019, respectively	310			304
Additional paid in capital	210,381			212,240
Accumulated other comprehensive loss	(2,426		)	(2,048		)
Retained earnings	111,352			125,437
Total stockholders’ equity	319,617			335,933
Total liabilities and stockholders’ equity	$	1,106,914		$	1,013,679


	Thirteen Weeks Ended						Thirteen Weeks Ended
	March 27, 2020			March 29, 2019			March 26, 2021		March 27, 2020
Net sales	$	375,431		$	357,027	Net sales	$	280,217	$	375,431
Cost of sales	284,530			266,838		Cost of sales	221,270		289,943
Gross profit	90,901			90,189		Gross profit	58,947		85,488
Operating expenses	107,917			84,039
Operating (loss) income	(17,016		)	6,150
Selling, general and administrative expenses						Selling, general and administrative expenses	80,245		108,882
Other operating (income) expenses, net						Other operating (income) expenses, net	(1,170)		(6,336)
Operating loss						Operating loss	(20,128)		(17,058)
Interest expense	5,124			4,551		Interest expense	4,763		5,124
Loss on asset disposal	42			34
(Loss) income before income taxes	(22,182		)	1,565
Provision for income taxes	(8,097		)	431
Net (loss) income	$	(14,085	)	$	1,134
Other comprehensive (loss) income:

Loss before income taxes						Loss before income taxes	(24,891)		(22,182)
Provision for income tax benefit						Provision for income tax benefit	(6,970)		(8,097)
Net loss						Net loss	$	(17,921)	$	(14,085)
Other comprehensive income (loss):						Other comprehensive income (loss):
Foreign currency translation adjustments	(378		)	55		Foreign currency translation adjustments	81		(378)
Comprehensive (loss) income	$	(14,463	)	$	1,189
Net (loss) income per share:
Comprehensive loss						Comprehensive loss	$	(17,840)	$	(14,463)
Net loss per share:						Net loss per share:
Basic	$	(0.48	)	$	0.04	Basic	$	(0.49)	$	(0.48)
Diluted	$	(0.48	)	$	0.04	Diluted	$	(0.49)	$	(0.48)
Weighted average common shares outstanding:						Weighted average common shares outstanding:
Basic	29,621,433			29,457,257		Basic	36,401,748		29,621,433
Diluted	29,621,433			29,840,979		Diluted	36,401,748		29,621,433



Balance December 28, 2018	29,968,483		$	300	$	207,326		$	(2,221	)	$	103,271		$	308,676
Cumulative effect adjustment due to adoption of new accounting standard	—		—		—			—			(2,027		)	(2,027		)
Net income	—		—		—			—			1,134			1,134
Stock compensation	(23,680	)	—		915			—			—			915
Exercise of stock options	20,383		—		412			—			—			412
Cumulative translation adjustment	—		—		—			55			—			55
Shares surrendered to pay tax withholding	(24,002	)	—		(742		)	—			—			(742		)
Balance March 29, 2019	29,941,184		$	300	$	207,911		$	(2,166	)	$	102,378		$	308,423



	Thirteen Weeks Ended
	March 27, 2020			March 29, 2019
Cash flows from operating activities:
Net (loss) income	$	(14,085	)	$	1,134
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	4,762			2,881
Amortization of intangible assets	3,298			2,877
Provision for allowance for doubtful accounts	18,431			851
Non-cash operating lease expense	244			537
Deferred taxes	(1,900		)	1,131
Amortization of deferred financing fees	762			522
Stock compensation	851			915
Change in fair value of contingent earn-out liabilities	(6,812		)	107
Loss on asset disposal	42			34
Changes in assets and liabilities, net of acquisitions:
Accounts receivable	33,141			13,778
Inventories	2,501			677
Prepaid expenses and other current assets	(8,855		)	(207		)
Accounts payable, accrued liabilities and accrued compensation	(14,311		)	(18,010		)
Other assets and liabilities	3,916			164
Net cash provided by operating activities	21,985			7,391

Cash flows from investing activities:
Capital expenditures	(3,093		)	(4,125		)
Cash paid for acquisitions, net of cash received	(63,450		)	(27,990		)
Net cash used in investing activities	(66,543		)	(32,115		)

Cash flows from financing activities:
Payment of debt, finance lease and other financing obligations	(687		)	(37		)
Proceeds from exercise of stock options	—			412
Surrender of shares to pay withholding taxes	(838		)	(742		)
Cash paid for contingent earn-out liability	(500		)	—
Borrowings under asset-based loan facility	100,000			—
Net cash provided by (used in) financing activities	97,975			(367		)

Effect of foreign currency on cash and cash equivalents	(133		)	(2		)
Net change in cash and cash equivalents	53,284			(25,093		)
Cash and cash equivalents-beginning of period	140,233			42,410
Cash and cash equivalents-end of period	$	193,517		$	17,317



	Sid Wainer			Other Acquisitions
Current assets	$	24,735		$	6,790
Customer relationships	—			6,200
Trademarks	3,500			700
Goodwill	9,645			5,131
Fixed assets	21,055			503
Right-of-use assets	8,259			1,019
Lease liabilities	(8,259		)	(1,019		)
Current liabilities	(10,404		)	(941		)
Earn-out liability	(2,081		)	(1,383		)
Total consideration	$	46,450		$	17,000



Carrying amount as of December 27, 2019	$	197,743
Acquisitions	14,776
Foreign currency translation	(9		)
Carrying amount as of March 27, 2020	$	212,510



December 27, 2019
Customer relationships	$	135,226	$	(45,454	)	$	89,772
Non-compete agreements	8,579		(7,479		)	1,100
Trademarks	64,505		(16,626		)	47,879
Total	$	208,310	$	(69,559	)	$	138,751



2020	$	9,956
2021	13,270
2022	12,490
2023	11,463
2024	11,119
Thereafter	87,454
Total	$	145,752



	Shares		Weighted Average Grant Date Fair Value
Unvested at December 27, 2019	740,609		$	27.68
Granted	822,134		18.57
Vested	(192,357	)	23.89
Forfeited	(14,701	)	22.06
Unvested at March 27, 2020	1,355,685		$	22.76



	2020		2019		$ Change		% Change
Net sales	$	375,431	$	357,027	$	18,404	5.2	%