Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 25, 2016 | Apr. 29, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Chefs' Warehouse, Inc. | |
Entity Central Index Key | 1,517,175 | |
Document Type | 10-Q | |
Trading Symbol | CHEF | |
Document Period End Date | Mar. 25, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-25 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 26,215,412 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Mar. 25, 2016 | Dec. 25, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 2,745 | $ 2,454 |
Accounts receivable, net of allowance of $5,875 in 2016 and $5,803 in 2015 | 113,333 | 124,139 |
Inventories, net | 91,266 | 92,758 |
Deferred taxes, net | 5,022 | 5,256 |
Prepaid expenses and other current assets | 8,791 | 9,164 |
Total current assets | 221,157 | 233,771 |
Equipment and leasehold improvements, net | 56,023 | 54,283 |
Software costs, net | 4,725 | 4,511 |
Goodwill | 155,848 | 155,816 |
Intangible assets, net | 129,500 | 132,211 |
Other assets | 3,286 | 3,089 |
Total assets | 570,539 | 583,681 |
Current liabilities: | ||
Accounts payable | 57,920 | 64,888 |
Accrued liabilities | 23,554 | 24,258 |
Accrued compensation | 5,807 | 7,732 |
Current portion of long-term debt | 4,701 | 6,030 |
Total current liabilities | 91,982 | 102,908 |
Long-term debt, net of current portion | 262,615 | 266,207 |
Deferred taxes, net | 9,954 | 9,316 |
Other liabilities and deferred credits | 16,183 | 17,286 |
Total liabilities | $ 380,734 | $ 395,717 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred Stock, $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding March 25, 2016 and December 25, 2015 | ||
Common Stock, $0.01 par value, 100,000,000 shares authorized, 26,220,426 and 26,290,675 shares issued and outstanding March 25, 2016 and December 25, 2015, respectively | $ 263 | $ 263 |
Additional paid in capital | 125,433 | 125,170 |
Cumulative foreign currency translation adjustment | (2,364) | (2,949) |
Retained earnings | 66,473 | 65,480 |
Stockholders' equity | 189,805 | 187,964 |
Total liabilities and stockholders' equity | $ 570,539 | $ 583,681 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 25, 2016 | Dec. 25, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for accounts receivable | $ 5,875 | $ 5,803 |
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, authorized | 5,000,000 | 5,000,000 |
Preferred Stock, issued | 0 | 0 |
Preferred Stock, outstanding | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, authorized | 100,000,000 | 100,000,000 |
Common Stock, issued | 26,220,426 | 26,290,675 |
Common Stock, outstanding | 26,220,426 | 26,290,675 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2016 | Mar. 27, 2015 | |
Income Statement [Abstract] | ||
Net sales | $ 262,401 | $ 197,891 |
Cost of sales | 196,443 | 148,135 |
Gross profit | 65,958 | 49,756 |
Operating expenses | 60,598 | 46,616 |
Operating income | 5,360 | 3,140 |
Interest expense | 3,656 | 1,836 |
Loss (gain) on asset disposal | 3 | (349) |
Income before income taxes | 1,701 | 1,653 |
Provision for income tax expense | 708 | 686 |
Net income | 993 | 967 |
Other comprehensive loss: | ||
Foreign currency translation adjustments | 585 | (161) |
Comprehensive income | $ 1,578 | $ 806 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.04 | $ 0.04 |
Diluted (in dollars per share) | $ 0.04 | $ 0.04 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 25,884,051 | 24,666,557 |
Diluted (in shares) | 25,917,350 | 24,722,275 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2016 | Mar. 27, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 993 | $ 967 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 1,206 | 887 |
Amortization | 2,783 | 1,345 |
Provision for allowance for doubtful accounts | 1,034 | 662 |
Deferred rent | 869 | (15) |
Deferred taxes | 1,159 | (722) |
Amortization of deferred financing fees | 358 | 284 |
Stock compensation | 560 | 324 |
Change in fair value of contingent earn-out liability | (345) | 40 |
Loss (gain) on sale of assets | 3 | (349) |
Changes in assets and liabilities, net of acquisitions: | ||
Accounts receivable | 9,855 | 3,272 |
Inventories | 1,626 | 4,249 |
Prepaid expenses and other current assets | 377 | 2,268 |
Accounts payable, accrued liabilities and accrued compensation | (10,773) | (5,762) |
Other liabilities | (271) | (156) |
Other assets | (519) | (87) |
Net cash provided by operating activities | 8,915 | 7,207 |
Cash flows from investing activities: | ||
Capital expenditures | (3,161) | (9,053) |
Proceeds from asset disposals | 1,516 | |
Net cash used in investing activities | (3,161) | (7,537) |
Cash flows from financing activities: | ||
Payment of debt | (1,897) | (1,884) |
Surrender of shares to pay withholding taxes | (297) | (222) |
Cash paid for contingent earn-out liability | (1,420) | |
Borrowings under revolving credit facility | 12,800 | 24,300 |
Payments under revolving credit facility | (16,182) | (21,700) |
Net cash used in financing activities | (5,576) | (926) |
Effect of foreign currency on cash and cash equivalents | 113 | (112) |
Net increase (decrease) in cash and cash equivalents | 291 | (1,368) |
Cash and cash equivalents-beginning of period | 2,454 | 3,328 |
Cash and cash equivalents-end of period | 2,745 | 1,960 |
Supplemental cash flow disclosures: | ||
Cash paid for income taxes | 1,934 | 624 |
Cash paid for interest | $ 3,087 | $ 2,052 |
Operations and Basis of Present
Operations and Basis of Presentation | 3 Months Ended |
Mar. 25, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Operations and Basis of Presentation | Note 1 Operations and Basis of Presentation Description of Business and Basis of Presentation The financial statements include the consolidated accounts of The Chefs Warehouse, Inc. (the Company), and its wholly-owned subsidiaries. The Companys quarterly periods end on the thirteenth Friday of each quarter. Every six to seven years the Company will add a fourteenth week to its fourth quarter to more closely align its year end to the calendar year. Consolidation The consolidated financial statements include all the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Unaudited Interim Financial Statements The accompanying unaudited condensed consolidated financial statements and the related interim information contained within the notes to such unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and the applicable rules of the Securities and Exchange Commission (SEC) for interim information and quarterly reports on Form 10-Q. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Companys audited consolidated financial statements and notes thereto for the fiscal year ended December 25, 2015 filed as part of the Companys Annual Report on Form 10-K, as filed with the SEC on March 4, 2016. The unaudited condensed consolidated financial statements appearing in this Form 10-Q have been prepared on the same basis as the audited consolidated financial statements included in the Companys Annual Report on Form 10-K, as filed with the SEC on March 4, 2016, and in the opinion of management include all normal recurring adjustments that are necessary for the fair statement of the Companys interim period results. The year-end condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by GAAP. Due to seasonal fluctuations and other factors, the results of operations for the thirteen weeks ended March 25, 2016 are not necessarily indicative of the results to be expected for the full year. The preparation of financial statements in conformity with GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from managements estimates. Reclassification Changes have been made to the prior period presentation in the condensed consolidated statements of operations and comprehensive income to conform to the current period presentation Amounts previously included in operating expenses are now included in net sales and cost of sales. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued guidance to clarify the principles for recognizing revenue. This guidance includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On August 12, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of ASU 2014-09 is permitted but not before the original effective date (annual periods beginning after December 15, 2016). We expect to adopt this guidance when effective and adoption is not expected to have a material impact on our financial statements. In July 2015, the FASB issued guidance to simplify the subsequent measurement of inventory. This guidance provides that inventory should be measured at lower of cost or net realizable value. This guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within fiscal years beginning after December 15, 2017 and is required to be applied on a prospective basis. Early adoption is permitted at the beginning of an interim or annual reporting period. We expect to adopt this guidance when effective and are still evaluating the impact this standard will have on our financial statements. In November 2015, the FASB issued guidance to simplify the presentation of deferred income tax assets and liabilities. Current GAAP requires an entity to separate deferred income tax assets and liabilities into current and non-current classifications. This guidance requires that all deferred tax liabilities be classified as non-current. This guidance is effective for fiscal years beginning after December 15, 2016 and may be applied on a prospective or retrospective basis. Early adoption is permitted as of the beginning of an interim or annual reporting period. We expect to adopt this guidance when effective and adoption is not expected to have a material effect on our financial statements. In February 2016, the FASB issued guidance to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Current GAAP does not require lessees to recognize assets and liabilities arising from operating leases on the balance sheet. This guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We expect to adopt this guidance when effective and are evaluating the impact this standard will have on our financial statements. In March 2016, the FASB issued guidance to simplify the accounting for stock compensation. This guidance requires that all excess tax benefits and deficiencies be recognized as income tax expense in the period in which they occur and that they be reflected as an operating activity in the statement of cash flows. Current GAAP has excess tax benefits recognized as additional paid in capital and as a financing activity in the statement of cash flows. In addition, the guidance gives companies the option of estimating the number of awards that will ultimately vest or accounting for forfeitures as they occur. This guidance is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted. We expect to adopt this guidance when effective and are evaluating the impact this standard will have on our financial statements. Guidance Adopted in 2016 Simplifying the Presentation of Debt Issuance Costs Other Assets Total assets Current portion of long-term debt Total current liabilities Long-term debt Total liabilities Total liabilities and stockholders' equity Previously reported $ 5,626 $ 586,218 $ 6,266 $ 103,144 $ 268,508 $ 398,254 $ 586,218 Simplifying the Presentation of Debt Issuance Costs (2,537 ) (2,537 ) (236 ) (236 ) (2,301 ) (2,537 ) (2,537 ) Current presentation $ 3,089 $ 583,681 $ 6,030 $ 102,908 $ 266,207 $ 395,717 $ 583,681 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 25, 2016 | |
Net income per share: | |
Earnings Per Share | Note 2 Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Thirteen Weeks Ended March 25, 2016 March 27, 2015 Net income per share: Basic $ 0.04 $ 0.04 Diluted $ 0.04 $ 0.04 Weighted average common shares: Basic 25,884,051 24,666,557 Diluted 25,917,350 24,722,275 Reconciliation of net income per common share: Thirteen Weeks Ended March 25, 2016 March 27, 2015 Numerator: Net income $ 993 $ 967 Denominator: Weighted average basic common shares outstanding 25,884,051 24,666,557 Dilutive effect of unvested common shares 33,299 55,718 Weighted average diluted common shares outstanding 25,917,350 24,722,275 We had unvested common shares of 156,240 and notes convertible into 1,237,374 shares that were anti-dilutive at March 25, 2016. There were no unvested common shares that were anti-dilutive at March 27, 2015. |
Fair Value Measurements; Fair V
Fair Value Measurements; Fair Value of Financial Instruments | 3 Months Ended |
Mar. 25, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements; Fair Value of Financial Instruments | Note 3 Fair Value Measurements; Fair Value of Financial Instruments We account for certain assets and liabilities at fair value. We categorize each of our fair value measurements in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety: Level 1 - Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets. Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities include the following: a) quoted prices for similar assets in active markets; b) quoted prices for identical or similar assets in inactive markets; c) inputs other than quoted prices that are observable for the asset; and d) inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset. Level 3 - Inputs to the valuation methodology are unobservable (i.e., supported by little or no market activity) and significant to the fair value measure. Assets and Liabilities Measured at Fair Value As of March 25, 2016, the Companys only assets or liabilities measured at fair value were the contingent earn-out liabilities for the Allen Brothers and Del Monte acquisitions. These liabilities were estimated using Level 3 inputs and had fair values of $4,344 and $13,447 at March 25, 2016, respectively. These liabilities are reflected as accrued liabilities and other liabilities and deferred credits on the balance sheet. 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. The following table presents the changes in Level 3 contingent consideration liability: Del Monte Allen Total Balance December 25, 2015 $ 13,792 $ 4,344 $ 18,136 Changes in fair value (345 ) (345 ) Balance March 25, 2016 $ 13,447 $ 4,344 $ 17,791 Fair Value of Financial Instruments The carrying amounts reported in the Companys consolidated balance sheets for accounts receivable and accounts payable approximate fair value, due to the immediate to short-term maturity of these financial instruments. The fair values of the current and former revolving credit facilities and term loans approximated their book values as of March 25, 2016 and December 25, 2015, as these instruments had variable interest rates that reflected current market rates available to the Company. The carrying amount of the Companys senior secured notes at March 25, 2016 and December 25, 2015 approximates fair value, as the interest rate obtained by the Company approximates the prevailing interest rates available to the Company for similar instruments. The fair value of these debt instruments were estimated using Level 3 inputs. The following table presents the carrying value and fair value of the Companys convertible subordinated notes. In estimating the fair value of these convertible secured notes, the Company utilized Level 3 inputs including, prevailing market interest rates to estimate the debt portion of the instrument and a Black Scholes valuation model to estimate the fair value of the conversion option. The Black Scholes model utilizes the market price of the Companys common stock, estimates of the stocks volatility and the prevailing risk free interest rate in calculating the fair value estimate. March 25, 2016 December 25, 2015 Carrying Fair Carrying Fair Convertible Secured Notes $ 36,750 $ 35,916 $ 36,750 $ 34,300 |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 25, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Note 4 Acquisitions The Company accounts for acquisitions in accordance with ASC 805 Business Combinations. Assets acquired and liabilities assumed are recorded in the accompanying consolidated balance sheet at their estimated fair values as of the acquisition date. Results of operations are included in the Companys financial statements from the date of acquisition. For the acquisition noted below, the Company used the income approach to determine the fair value of the customer relationships, the relief from royalty method to determine the fair value of trademarks and the comparison of economic income using the with/without approach to determine the fair value of non-compete agreements. The Company used Level 3 inputs to determine the fair value of all these intangible assets. On April 6, 2015, the Company acquired substantially all the equity interests of Del Monte Capitol Meat Co. and substantially all the assets of certain of its affiliated companies (collectively Del Monte). Del Monte supplies high quality USDA inspected beef, pork, lamb, veal, poultry and seafood products to Northern California. The aggregate purchase price paid by the Company at closing was approximately $185,332, including the impact of an initial net working capital adjustment which is subject to a post-closing working capital adjustment true up. Approximately $123,893 was paid in cash through cash-on-hand, the proceeds from the issuance of additional senior secured notes and additional borrowings under the revolving portion of the Amended and Restated Credit Agreement (as defined below). The remaining approximately $61,439 consisted of (i) approximately 1.1 million shares of the Companys common stock totaling approximately $24,689 and (ii) $36,750 in aggregate principal amounts of convertible subordinated notes with a six-year maturity bearing interest at 2.5% with a conversion price of $29.70 per share issued to certain of the Del Monte entities. The Company will also pay additional contingent consideration, if earned, in the form of an earn-out amount which could total approximately $24,500 to certain of the Del Monte entities; the payment of the earn-out liability is subject to certain conditions, including the successful achievement of Adjusted EBITDA targets for the Del Monte entities and improvements in certain operating metrics for the Companys existing protein business and the business of any protein companies subsequently acquired by the Company over the six years following the closing of the Del Monte acquisition. At April 6, 2015, the Company estimated the fair value of this contingent earn-out liability to be $13,139. This contingent liability is adjusted to fair value on a quarterly basis and is estimated to be $13,447 at March 25, 2016. The Company expensed $1,546 of professional fees and $3,000 of transaction bonuses in operating expenses related to the Del Monte acquisition during the fiscal year ended December 25, 2015. The Company is in the process of finalizing a valuation of the tangible and intangible assets of Del Monte as of the acquisition date. These assets are being valued at fair value using Level 3 inputs. Customer lists are being amortized over 15 years and trademarks are being amortized over 20 years. Goodwill for the Del Monte acquisition will be amortized over 15 years for tax purposes. For the thirteen weeks ended March 25, 2016, the Company reflected net sales and income before taxes and amortization of intangibles of $52,130 and $4,840, respectively, for Del Monte in its condensed consolidated statement of operations. Del Monte Current assets (includes cash acquired) $ 31,872 Customer Relationships 62,246 Trademarks 29,261 Goodwill 77,505 Fixed assets 5,652 Other assets 137 Earn-out liability (13,139 ) Deferred tax liability (361 ) Convertible subordinated notes (36,750 ) Issuance of common shares (24,689 ) Current liabilities (7,841 ) Cash purchase price $ 123,893 |
Inventory
Inventory | 3 Months Ended |
Mar. 25, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 5 Inventory Inventory consists of finished product. Our different entities record inventory using a mixture of first-in, first-out and average cost, which we believe approximates first-in, first-out. Inventory is reflected net of reserves for shrinkage and obsolescence totaling $1,621 and $1,956 at March 25, 2016 and December 25, 2015, respectively. |
Equipment and Leasehold Improve
Equipment and Leasehold Improvements | 3 Months Ended |
Mar. 25, 2016 | |
Property, Plant and Equipment [Abstract] | |
Equipment and Leasehold Improvements | Note 6 Equipment and Leasehold Improvements Equipment and leasehold improvements consisted of the following: As of Useful Lives March 25, 2016 December 25, 2015 Land Indefinite $ 1,571 $ 1,571 Buildings 20 years 2,802 2,740 Machinery and equipment 5-10 years 12,292 10,739 Computers, data processing and other equipment 3-7 years 8,165 7,598 Leasehold improvements 7-22 years 42,781 41,653 Furniture and fixtures 7 years 1,826 1,488 Vehicles 5-7 years 2,072 2,077 Other 7 years 95 95 Construction-in-process 7,826 8,884 79,430 76,845 Less: accumulated depreciation and amortization (23,407 ) (22,562 ) Equipment and leasehold improvements, net $ 56,023 $ 54,283 Construction-in-process at March 25, 2016 related primarily to the implementation of its Enterprise Resource Planning (ERP) system. The rollout of our ERP system will continue throughout fiscal 2016 and 2017. Construction-in process at December 25, 2015 related primarily to the build out of the Companys new distribution facility in San Francisco, CA and the implementation of its ERP system. At March 25, 2016 and December 25, 2015, the Company had $506 of equipment and vehicles financed by capital leases. The Company recorded depreciation on equipment under capital leases of $24 and $24 on these assets during the thirteen weeks ended March 25, 2016 and March 27, 2015, respectively. Depreciation expense on equipment and leasehold improvements was $844 and $606 for the thirteen weeks ended March 25, 2016 and March 27, 2015, respectively. Capitalized software is recorded net of accumulated amortization of $4,089 and $3,751 at March 25, 2016 and December 25, 2015, respectively. Depreciation expense on software was $338 and $257 for the thirteen weeks ended March 25, 2016 and March 27, 2015, respectively. During the thirteen weeks ended March 25, 2016 and March 27, 2015, the Company incurred interest expense of $3,656 and $1,836, respectively. The Company capitalized interest expense of $0 and $486, respectively, during the same periods. Capitalized interest was related to the build outs of the new distribution facilities in Bronx, NY and Las Vegas, NV. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 25, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 7 Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill are presented as follows: Carrying amount as of December 25, 2015 $ 155,816 Foreign currency translation 32 Carrying amount as of March 25, 2016 $ 155,848 Gross Accumulated Net Amount March 25, 2016; Customer relationships $ 94,145 (14,506 ) $ 79,639 Non-compete agreements 7,166 (4,556 ) 2,610 Trademarks 52,584 (5,333 ) 47,251 Total $ 153,895 (24,395 ) $ 129,500 December 25, 2015: Customer relationships $ 94,097 (12,755 ) $ 81,342 Non-compete agreements 7,166 (4,213 ) 2,953 Trademarks 52,549 (4,633 ) 47,916 Total $ 153,812 (21,601 ) $ 132,211 Amortization expense for other intangibles was $2,783 and $1,345 for the thirteen weeks ended March 25, 2016 and March 27, 2015, respectively. Estimated amortization expense for other intangibles for the fiscal year ending December 30, 2016 and each of the next four fiscal years and thereafter is as follows: 2016 $ 10,791 2017 10,756 2018 9,617 2019 9,340 2020 9,067 Thereafter 82,640 Total $ 132,211 |
Debt Obligations
Debt Obligations | 3 Months Ended |
Mar. 25, 2016 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Note 8 Debt Obligations Debt obligations as of March 25, 2016 and December 25, 2015 consisted of the following: March 25, December 25, Senior secured notes $ 125,000 $ 125,000 Revolving credit facility 90,000 93,382 Term loan 3,181 4,681 New Markets Tax Credit loan 11,000 11,000 Convertible subordinated notes 36,750 36,750 Capital leases and financed software 3,564 3,961 Deferred finance fees (2,179 ) (2,537 ) Total debt obligations 267,316 272,237 Less: current installments (4,701 ) (6,030 ) Total debt obligations excluding current installments $ 262,615 $ 266,207 As of March 25, 2016, the Company was in compliance with all debt covenants and the Company had reserved $6,495 of the revolving credit facility portion of the Amended and Restated Credit Agreement for the issuance of letters of credit. As of March 25, 2016, funds totaling $43,505 were available for borrowing under the revolving credit facility portion of the Amended and Restated Credit Agreement. |
Stockholders Equity
Stockholders Equity | 3 Months Ended |
Mar. 25, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 9 Stockholders Equity During the thirteen weeks ended March 25, 2016, the Company granted 120,325 restricted stock awards (RSAs) to its employees at a weighted average grant date fair value of $20.23 each. These awards are a mix of time and performance based grants which will vest over periods of two to four years. During the thirteen weeks ended March 25, 2016, the Company recognized expense totaling $53 on these RSAs and $451 of expense for RSAs issued in prior years. During the thirteen weeks ended March 25, 2016, the Company granted 259,577 non-qualified stock options with market condition provisions to its employees at a weighted average grant date fair value of $7.82 each. These awards vest over a period of three years and require the Companys stock to trade at or above $30 per share for 20 consecutive days within four years of issuance to meet the market condition threshold. During the thirteen weeks ended March 25, 2016, the Company recognized expense totaling $56 on these options. At March 25, 2016, the Company had 322,262 unvested RSAs outstanding. At March 25, 2016, the total unrecognized compensation cost for these unvested RSAs was $5,444, and the weighted-average remaining useful life was approximately 21 months. Of this total, $3,981 related to RSAs with time-based vesting provisions and $1,463 related to RSAs with performance-based vesting provisions. At March 25, 2016, the weighted-average remaining useful lives for time-based vesting RSAs and performance-based vesting RSAs were approximately 19 months and 26 months, respectively. No compensation expense related to the Companys RSAs has been capitalized. As of March 25, 2016, there were 656,150 shares available for grant under the Companys 2011 Omnibus Equity Incentive Plan. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 25, 2016 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 10 Related Parties The Company leases two warehouse facilities from related parties. These facilities are 100% owned by entities controlled by certain of the Companys current and former directors and officers and current stockholders and are deemed to be affiliates of those individuals. Expenses related to these facilities totaled $216 and $412, respectively, during the thirteen weeks ended March 25, 2016 and March 27, 2015. One of the facilities is a distribution facility leased by Chefs Warehouse Mid-Atlantic, LLC for which the Company recently extended the lease expiration date to September 30, 2019. The other facility is a distribution facility which one of the Companys subsidiaries, Dairyland, sublet from TCW Leasing Co., LLC (Leasing), an entity controlled by the Companys founders. Each of Christopher Pappas, CEO, John Pappas, Vice Chairmanand Dean Facatselis (the brother-in-law of Messrs. Pappas) owns 8.33% of a New York City-based restaurant customer of the Company and its subsidiaries that purchased approximately $26 and $27, respectively, of products from the Company during the thirteen weeks ended March 25, 2016 and March 27, 2015. Messrs. Pappas and Facatselis have no other interest in the restaurant other than these equity interests and are not involved in the day-to-day operation or management of this restaurant. An entity owned 50% by John Couri, a director of the Company, and of which Messrs. C. Pappas and S. Hanson (also directors of the Company) previously held ownership interests owns an interest in an aircraft that the Company uses for business purposes in the course of its operations. Mr. Couri paid for his ownership interest in the aircraft himself and bears his share of all operating, personnel and maintenance costs associated with the operation of this aircraft. The Company made payments of $0 and $32, respectively for the thirteen weeks ended March 25, 2016 and March 27, 2015 for use of such aircraft. All payments were paid directly to an entity that manages the aircraft in which Mr. Couri has a de minimis The Company paid $231 and $134 to Architexture Studios, Inc. for interior decorating and design including the purchase of furniture and leasehold improvements primarily for our Las Vegas, San Francisco and Chicago facilities during the thirteen weeks ended March 25, 2016 and March 27, 2015, respectively. This entity is owned by Julie Hardridge, the sister-in-law of Christopher Pappas. With the acquisition of Del Monte, the Company acquired two warehouse facilities that the Company leases from certain prior owners of Del Monte. Three of the owners are current employees, one of whom, John DeBenedetti, serves on the Companys board of directors. The first property is located in American Canyon, CA and is owned by TJ Management Co. LLC, an entity owned 50% by John DeBenedetti and 50% by Theresa Lincoln, John DeBenedettis sister. The Company paid rent on this facility totaling $52 for the thirteen weeks ended March 25, 2016. The second property is located in West Sacramento, CA and is owned by David DeBenedetti and Victoria DeBenedetti, the parents of John DeBenedetti. The Company paid rent on this facility totaling $56 for the thirteen weeks ended March 27, 2016. John DeBenedetti, Theresa Lincoln and Victoria DeBenedetti are employees of a subsidiary of the Company. John DeBenedetti and Theresa Lincoln, indirectly through TJ Investments, LLC, own a 16.67% ownership interest in Old World Provisions, which supplies products to the Company following the Del Monte acquisition. During the thirteen weeks ended March 25, 2016 the Company purchased approximately $148 of products from Old World Provisions. Neither Mr. J. DeBenedetti nor Ms. Lincoln is involved in the day-to-day management of Old World Provisions. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 25, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 Commitments and Contingencies Until February 29, 2016, the Company sublet a distribution facility from Leasing (an entity controlled by the Companys founders). Leasing leases the distribution center from the New York City Industrial Development Agency. In connection with this sublease arrangement and Leasings obligations under a related mortgage to its mortgage lender, the Company, Dairyland and another of the Companys subsidiaries initially were required to act as guarantors of Leasings mortgage obligation on the distribution center. The mortgage payoff date is December 2029 and the potential obligation under this guarantee totaled $5,498 at March 25, 2016. By agreement dated July 1, 2005, the lender released the Company and its subsidiaries from their guaranty obligations, provided the sublease between Dairyland and Leasing remained in full force and effect. As of February 29, 2016, Dairyland exited the sublease arrangement with Leasing, triggering the guarantee obligation. The Company believes that the fair value of the building securing the mortgage more than offsets any potential obligation. In addition, Leasing is in the process of refinancing its mortgage with another lender. The Company, upon completion of the refinancing, expects that the Company and its subsidiaries will be unconditionally and fully released from any guaranty of Leasings mortgage loan. |
Operations and Basis of Prese17
Operations and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 25, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation The financial statements include the consolidated accounts of The Chefs Warehouse, Inc. (the Company), and its wholly-owned subsidiaries. The Companys quarterly periods end on the thirteenth Friday of each quarter. Every six to seven years the Company will add a fourteenth week to its fourth quarter to more closely align its year end to the calendar year. |
Consolidation | Consolidation The consolidated financial statements include all the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. |
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements The accompanying unaudited condensed consolidated financial statements and the related interim information contained within the notes to such unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and the applicable rules of the Securities and Exchange Commission (SEC) for interim information and quarterly reports on Form 10-Q. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Companys audited consolidated financial statements and notes thereto for the fiscal year ended December 25, 2015 filed as part of the Companys Annual Report on Form 10-K, as filed with the SEC on March 4, 2016. The unaudited condensed consolidated financial statements appearing in this Form 10-Q have been prepared on the same basis as the audited consolidated financial statements included in the Companys Annual Report on Form 10-K, as filed with the SEC on March 4, 2016, and in the opinion of management include all normal recurring adjustments that are necessary for the fair statement of the Companys interim period results. The year-end condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by GAAP. Due to seasonal fluctuations and other factors, the results of operations for the thirteen weeks ended March 25, 2016 are not necessarily indicative of the results to be expected for the full year. The preparation of financial statements in conformity with GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from managements estimates. |
Reclassification | Reclassification Changes have been made to the prior period presentation in the condensed consolidated statements of operations and comprehensive income to conform to the current period presentation Amounts previously included in operating expenses are now included in net sales and cost of sales. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued guidance to clarify the principles for recognizing revenue. This guidance includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On August 12, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of ASU 2014-09 is permitted but not before the original effective date (annual periods beginning after December 15, 2016). We expect to adopt this guidance when effective and adoption is not expected to have a material impact on our financial statements. In July 2015, the FASB issued guidance to simplify the subsequent measurement of inventory. This guidance provides that inventory should be measured at lower of cost or net realizable value. This guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within fiscal years beginning after December 15, 2017 and is required to be applied on a prospective basis. Early adoption is permitted at the beginning of an interim or annual reporting period. We expect to adopt this guidance when effective and are still evaluating the impact this standard will have on our financial statements. In November 2015, the FASB issued guidance to simplify the presentation of deferred income tax assets and liabilities. Current GAAP requires an entity to separate deferred income tax assets and liabilities into current and non-current classifications. This guidance requires that all deferred tax liabilities be classified as non-current. This guidance is effective for fiscal years beginning after December 15, 2016 and may be applied on a prospective or retrospective basis. Early adoption is permitted as of the beginning of an interim or annual reporting period. We expect to adopt this guidance when effective and adoption is not expected to have a material effect on our financial statements. In February 2016, the FASB issued guidance to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Current GAAP does not require lessees to recognize assets and liabilities arising from operating leases on the balance sheet. This guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We expect to adopt this guidance when effective and are evaluating the impact this standard will have on our financial statements. In March 2016, the FASB issued guidance to simplify the accounting for stock compensation. This guidance requires that all excess tax benefits and deficiencies be recognized as income tax expense in the period in which they occur and that they be reflected as an operating activity in the statement of cash flows. Current GAAP has excess tax benefits recognized as additional paid in capital and as a financing activity in the statement of cash flows. In addition, the guidance gives companies the option of estimating the number of awards that will ultimately vest or accounting for forfeitures as they occur. This guidance is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted. We expect to adopt this guidance when effective and are evaluating the impact this standard will have on our financial statements. Guidance Adopted in 2016 Simplifying the Presentation of Debt Issuance Costs Other Assets Total assets Current portion of long-term debt Total current liabilities Long-term debt Total liabilities Total liabilities and stockholders' equity Previously reported $ 5,626 $ 586,218 $ 6,266 $ 103,144 $ 268,508 $ 398,254 $ 586,218 Simplifying the Presentation of Debt Issuance Costs (2,537 ) (2,537 ) (236 ) (236 ) (2,301 ) (2,537 ) (2,537 ) Current presentation $ 3,089 $ 583,681 $ 6,030 $ 102,908 $ 266,207 $ 395,717 $ 583,681 |
Operations and Basis of Prese18
Operations and Basis of Presentation (Tables) | 3 Months Ended |
Mar. 25, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of assets and liabilities on adoption of guidance | As a result of adopting this guidance, total assets and total liabilities as of December 25, 2015 decreased as discussed below. Other Assets Total assets Current portion of long-term debt Total current liabilities Long-term debt Total liabilities Total liabilities and stockholders' equity Previously reported $ 5,626 $ 586,218 $ 6,266 $ 103,144 $ 268,508 $ 398,254 $ 586,218 Simplifying the Presentation of Debt Issuance Costs (2,537 ) (2,537 ) (236 ) (236 ) (2,301 ) (2,537 ) (2,537 ) Current presentation $ 3,089 $ 583,681 $ 6,030 $ 102,908 $ 266,207 $ 395,717 $ 583,681 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 25, 2016 | |
Net income per share: | |
Schedule of earnings per share | The following table sets forth the computation of basic and diluted earnings per share: Thirteen Weeks Ended March 25, 2016 March 27, 2015 Net income per share: Basic $ 0.04 $ 0.04 Diluted $ 0.04 $ 0.04 Weighted average common shares: Basic 25,884,051 24,666,557 Diluted 25,917,350 24,722,275 |
Schedule of reconciliation of earnings per share | Reconciliation of net income per common share: Thirteen Weeks Ended March 25, 2016 March 27, 2015 Numerator: Net income $ 993 $ 967 Denominator: Weighted average basic common shares outstanding 25,884,051 24,666,557 Dilutive effect of unvested common shares 33,299 55,718 Weighted average diluted common shares outstanding 25,917,350 24,722,275 |
Fair Value Measurements; Fair20
Fair Value Measurements; Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 25, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of changes in Level 3 contingent consideration liability | The following table presents the changes in Level 3 contingent consideration liability: Del Monte Allen Total Balance December 25, 2015 $ 13,792 $ 4,344 $ 18,136 Changes in fair value (345 ) (345 ) Balance March 25, 2016 $ 13,447 $ 4,344 $ 17,791 |
Schedule of carrying value and fair value of the company's convertible subordinated notes | The Black Scholes model utilizes the market price of the Companys common stock, estimates of the stocks volatility and the prevailing risk free interest rate in calculating the fair value estimate. March 25, 2016 December 25, 2015 Carrying Fair Carrying Fair Convertible Secured Notes $ 36,750 $ 35,916 $ 36,750 $ 34,300 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 25, 2016 | |
Business Combinations [Abstract] | |
Schedule of assets and liabilities acquired | For the thirteen weeks ended March 25, 2016, the Company reflected net sales and income before taxes and amortization of intangibles of $52,130 and $4,840, respectively, for Del Monte in its condensed consolidated statement of operations. Del Monte Current assets (includes cash acquired) $ 31,872 Customer Relationships 62,246 Trademarks 29,261 Goodwill 77,505 Fixed assets 5,652 Other assets 137 Earn-out liability (13,139 ) Deferred tax liability (361 ) Convertible subordinated notes (36,750 ) Issuance of common shares (24,689 ) Current liabilities (7,841 ) Cash purchase price $ 123,893 |
Equipment and Leasehold Impro22
Equipment and Leasehold Improvements (Tables) | 3 Months Ended |
Mar. 25, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of plant, equipment and leasehold improvements | Equipment and leasehold improvements consisted of the following: As of Useful Lives March 25, 2016 December 25, 2015 Land Indefinite $ 1,571 $ 1,571 Buildings 20 years 2,802 2,740 Machinery and equipment 5-10 years 12,292 10,739 Computers, data processing and other equipment 3-7 years 8,165 7,598 Leasehold improvements 7-22 years 42,781 41,653 Furniture and fixtures 7 years 1,826 1,488 Vehicles 5-7 years 2,072 2,077 Other 7 years 95 95 Construction-in-process 7,826 8,884 79,430 76,845 Less: accumulated depreciation and amortization (23,407 ) (22,562 ) Equipment and leasehold improvements, net $ 56,023 $ 54,283 |
Goodwill and Other Intangible23
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 25, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The changes in the carrying amount of goodwill are presented as follows: Carrying amount as of December 25, 2015 $ 155,816 Foreign currency translation 32 Carrying amount as of March 25, 2016 $ 155,848 |
Schedule of other intangible assets | Other intangible assets consisted of the following at March 25, 2016 and December 25, 2015: Gross Accumulated Net Amount March 25, 2016; Customer relationships $ 94,145 (14,506 ) $ 79,639 Non-compete agreements 7,166 (4,556 ) 2,610 Trademarks 52,584 (5,333 ) 47,251 Total $ 153,895 (24,395 ) $ 129,500 December 25, 2015: Customer relationships $ 94,097 (12,755 ) $ 81,342 Non-compete agreements 7,166 (4,213 ) 2,953 Trademarks 52,549 (4,633 ) 47,916 Total $ 153,812 (21,601 ) $ 132,211 |
Schedule of estimated future amortization expense | Estimated amortization expense for other intangibles for the fiscal year ending December 30, 2016 and each of the next four fiscal years and thereafter is as follows: 2016 $ 10,791 2017 10,756 2018 9,617 2019 9,340 2020 9,067 Thereafter 82,640 Total $ 132,211 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 3 Months Ended |
Mar. 25, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of debt obligations | Debt obligations as of March 25, 2016 and December 25, 2015 consisted of the following: March 25, December 25, Senior secured notes $ 125,000 $ 125,000 Revolving credit facility 90,000 93,382 Term loan 3,181 4,681 New Markets Tax Credit loan 11,000 11,000 Convertible subordinated notes 36,750 36,750 Capital leases and financed software 3,564 3,961 Deferred finance fees (2,179 ) (2,537 ) Total debt obligations 267,316 272,237 Less: current installments (4,701 ) (6,030 ) Total debt obligations excluding current installments $ 262,615 $ 266,207 |
Operations and Basis of Prese25
Operations and Basis of Presentation (Details) - USD ($) $ in Thousands | Mar. 25, 2016 | Dec. 25, 2015 |
Other Assets | $ 3,286 | $ 3,089 |
Total assets | 570,539 | 583,681 |
Current portion of long-term debt | 4,701 | 6,030 |
Total current liabilities | 91,982 | 102,908 |
Long-term debt | 262,615 | 266,207 |
Total liabilities | 380,734 | 395,717 |
Total liabilities and stockholders' equity | $ 570,539 | 583,681 |
Previously Reported [Member] | ||
Other Assets | 5,626 | |
Total assets | 586,218 | |
Current portion of long-term debt | 6,266 | |
Total current liabilities | 103,144 | |
Long-term debt | 268,508 | |
Total liabilities | 398,254 | |
Total liabilities and stockholders' equity | 586,218 | |
Simplifying the Presentation of Debt Issuance Costs [Member] | ||
Other Assets | (2,537) | |
Total assets | (2,537) | |
Current portion of long-term debt | (236) | |
Total current liabilities | (236) | |
Long-term debt | (2,301) | |
Total liabilities | (2,537) | |
Total liabilities and stockholders' equity | $ (2,537) |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) | 3 Months Ended |
Mar. 25, 2016shares | |
Unvested Common Shares [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive shares | 156,240 |
Convertible Notes [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive shares | 1,237,374 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 25, 2016 | Mar. 27, 2015 | |
Net income per share: | ||
Basic (in dollars per share) | $ 0.04 | $ 0.04 |
Diluted (in dollars per share) | $ 0.04 | $ 0.04 |
Weighted average common shares: | ||
Basic (in shares) | 25,884,051 | 24,666,557 |
Diluted (in shares) | 25,917,350 | 24,722,275 |
Numerator: | ||
Net income | $ 993 | $ 967 |
Denominator: | ||
Weighted average basic common shares outstanding (in shares) | 25,884,051 | 24,666,557 |
Dilutive effect of unvested common shares (in shares) | 33,299 | 55,718 |
Weighted average diluted common shares outstanding (in shares) | 25,917,350 | 24,722,275 |
Fair Value Measurements; Fair28
Fair Value Measurements; Fair Value of Financial Instruments (Details Narrative) - Fair Value Inputs Level 3 [Member] $ in Thousands | Mar. 25, 2016USD ($) |
Allen Brothers, Inc And Subsidiaries [Member] | |
Contingent earn-out liabilities, fair value | $ 4,344 |
Del Monte [Member] | |
Contingent earn-out liabilities, fair value | $ 13,447 |
Fair Value Measurements; Fair29
Fair Value Measurements; Fair Value of Financial Instruments (Details) - Fair Value Inputs Level 3 [Member] $ in Thousands | 3 Months Ended |
Mar. 25, 2016USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning | $ 18,136 |
Changes in fair value | (345) |
Balance at ending | 17,791 |
Del Monte [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning | 13,792 |
Changes in fair value | (345) |
Balance at ending | 13,447 |
Allen Brothers, Inc And Subsidiaries [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning | $ 4,344 |
Changes in fair value | |
Balance at ending | $ 4,344 |
Fair Value Measurements; Fair30
Fair Value Measurements; Fair Value of Financial Instruments (Details 1) - Fair Value Inputs Level 3 [Member] - USD ($) $ in Thousands | Mar. 25, 2016 | Dec. 25, 2015 |
Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Convertible Secured Notes | $ 36,750 | $ 36,750 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Convertible Secured Notes | $ 35,916 | $ 34,300 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - Del Monte [Member] - USD ($) $ / shares in Units, $ in Thousands | Apr. 06, 2015 | Mar. 25, 2016 | Dec. 25, 2015 |
Effective acquisition date | Apr. 6, 2015 | ||
Aggregate purchase price | $ 185,332 | ||
Portion purchase price cash-on-hand | $ 123,893 | 123,893 | |
Portion purchase price additional senior secured notes and additional borrowings | $ 61,439 | ||
Number of common stock issued for acquisition | 1,100,000 | ||
Value of common stock issued for acquisition | 24,689 | $ 24,689 | |
Additional contingent consideration | $ 24,500 | ||
Description of payment for contingent consideration arrangements | The payment of the earn-out liability is subject to certain conditions, including the successful achievement of Adjusted EBITDA targets for the Del Monte entities and improvements in certain operating metrics for the Companys existing protein business and the business of any protein companies subsequently acquired by the Company over the six years following the closing of the Del Monte acquisition. | ||
Fair value of contingent consideration | (13,139) | $ 13,447 | |
Professional fees | $ 1,546 | ||
Operating expenses | $ 3,000 | ||
Net sales | 52,130 | ||
Income before taxes | $ 4,840 | ||
Other Amortizable Intangibles [Member] | Maximum [Member] | |||
Weighted average useful life | 20 years | ||
Other Amortizable Intangibles [Member] | Minimum [Member] | |||
Weighted average useful life | 15 years | ||
Goodwill [Member] | |||
Weighted average useful life | 15 years | ||
Convertible Subordinated Notes [Member] | |||
Aggregate principal amounts | $ 36,750 | ||
Maturity period | 6 years | ||
Stated interest rate | 2.50% | ||
Conversion price (in dollars per share) | $ 29.70 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Mar. 25, 2016 | Dec. 25, 2015 | Apr. 06, 2015 |
Goodwill | $ 155,848 | $ 155,816 | |
Del Monte [Member] | |||
Current assets (includes cash acquired) | $ 31,872 | ||
Goodwill | 77,505 | ||
Fixed assets | 5,652 | ||
Other assets | 137 | ||
Earn-out liability | 13,447 | (13,139) | |
Deferred tax liability | (361) | ||
Convertible subordinated notes | (36,750) | ||
Issuance of common shares | (24,689) | (24,689) | |
Current liabilities | (7,841) | ||
Cash purchase price | $ 123,893 | 123,893 | |
Del Monte [Member] | Customer Relationships [Member] | |||
Other intangibles | 62,246 | ||
Del Monte [Member] | Trademarks [Member] | |||
Other intangibles | $ 29,261 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) $ in Thousands | Mar. 25, 2016 | Dec. 25, 2015 |
Inventory Disclosure [Abstract] | ||
Reserves for shrinkage and obsolescence | $ 1,621 | $ 1,956 |
Equipment and Leasehold Impro34
Equipment and Leasehold Improvements (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 25, 2016 | Mar. 27, 2015 | Dec. 25, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 844 | $ 606 | |
Accumulated amortization | 23,407 | $ 22,562 | |
Interest expense | 3,656 | 1,836 | |
Capitalized interest expense | 0 | 846 | |
Assets Held Under Capital Leases [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Assets financed by capital lease | 506 | 506 | |
Depreciation | 24 | 24 | |
Computer Software Intangible Asset [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | 338 | $ 257 | |
Accumulated amortization | $ 4,089 | $ 3,751 |
Equipment and Leasehold Impro35
Equipment and Leasehold Improvements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2016 | Dec. 25, 2015 | |
Equipment and leasehold improvements, gross | $ 79,430 | $ 76,845 |
Less: accumulated depreciation and amortization | (23,407) | (22,562) |
Equipment and leasehold improvements, net | 56,023 | 54,283 |
Land [Member] | ||
Equipment and leasehold improvements, gross | $ 1,571 | 1,571 |
Buildings [Member] | ||
Useful Lives | 20 years | |
Equipment and leasehold improvements, gross | $ 2,802 | 2,740 |
Machinery and equipment [Member] | ||
Equipment and leasehold improvements, gross | $ 12,292 | 10,739 |
Machinery and equipment [Member] | Minimum [Member] | ||
Useful Lives | 5 years | |
Machinery and equipment [Member] | Maximum [Member] | ||
Useful Lives | 10 years | |
Computers, data processing and other equipment [Member] | ||
Equipment and leasehold improvements, gross | $ 8,165 | 7,598 |
Computers, data processing and other equipment [Member] | Minimum [Member] | ||
Useful Lives | 3 years | |
Computers, data processing and other equipment [Member] | Maximum [Member] | ||
Useful Lives | 7 years | |
Leasehold improvements [Member] | ||
Equipment and leasehold improvements, gross | $ 42,781 | 41,653 |
Leasehold improvements [Member] | Minimum [Member] | ||
Useful Lives | 7 years | |
Leasehold improvements [Member] | Maximum [Member] | ||
Useful Lives | 22 years | |
Furniture and fixtures [Member] | ||
Useful Lives | 7 years | |
Equipment and leasehold improvements, gross | $ 1,826 | 1,488 |
Vehicles [Member] | ||
Equipment and leasehold improvements, gross | $ 2,072 | 2,077 |
Vehicles [Member] | Minimum [Member] | ||
Useful Lives | 5 years | |
Vehicles [Member] | Maximum [Member] | ||
Useful Lives | 7 years | |
Other [Member] | ||
Useful Lives | 7 years | |
Equipment and leasehold improvements, gross | $ 95 | 95 |
Construction-in-process [Member] | ||
Equipment and leasehold improvements, gross | $ 7,826 | $ 8,884 |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2016 | Mar. 27, 2015 | |
Amortization expense | $ 2,783 | $ 1,345 |
Customer Relationships [Member] | Minimum [Member] | ||
Useful life | 4 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Useful life | 20 years | |
Trademarks [Member] | Minimum [Member] | ||
Useful life | 1 year | |
Trademarks [Member] | Maximum [Member] | ||
Useful life | 40 years | |
Non-compete Agreements [Member] | Minimum [Member] | ||
Useful life | 2 years | |
Non-compete Agreements [Member] | Maximum [Member] | ||
Useful life | 6 years |
Goodwill and Other Intangible37
Goodwill and Other Intangible Assets (Details) $ in Thousands | 3 Months Ended |
Mar. 25, 2016USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 155,816 |
Foreign currency translation | 32 |
Ending balance | $ 155,848 |
Goodwill and Other Intangible38
Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Thousands | Mar. 25, 2016 | Dec. 25, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 153,895 | $ 153,812 |
Accumulated Amortization | (24,395) | (21,601) |
Net Amount | 129,500 | 132,211 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 94,145 | 94,097 |
Accumulated Amortization | (14,506) | (12,755) |
Net Amount | 79,639 | 81,342 |
Non-compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,166 | 7,166 |
Accumulated Amortization | (4,556) | (4,213) |
Net Amount | 2,610 | 2,953 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 52,584 | 52,549 |
Accumulated Amortization | (5,333) | (4,633) |
Net Amount | $ 47,251 | $ 47,916 |
Goodwill and Other Intangible39
Goodwill and Other Intangible Assets (Details 2) $ in Thousands | Mar. 25, 2016USD ($) |
Estimated amortization in fiscal year: | |
2,016 | $ 10,791 |
2,017 | 10,756 |
2,018 | 9,617 |
2,019 | 9,340 |
2,020 | 9,067 |
Thereafter | 82,640 |
Total | $ 132,211 |
Debt Obligations (Details Narra
Debt Obligations (Details Narrative) - Amended And Restated Credit Agreement [Member] $ in Thousands | 3 Months Ended |
Mar. 25, 2016USD ($) | |
Convertible Subordinated Notes [Member] | |
Debt Instrument [Line Items] | |
Debt covenants compliance | $ 6,495 |
Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Maximum debt borrowing capacity | $ 43,505 |
Debt Obligations (Details)
Debt Obligations (Details) - USD ($) $ in Thousands | Mar. 25, 2016 | Dec. 25, 2015 |
Debt Instrument [Line Items] | ||
Total debt obligations | $ 267,316 | $ 272,237 |
Deferred finance fees | (2,179) | (2,537) |
Less: current installments | (4,701) | (6,030) |
Total debt obligations excluding current installments | 262,615 | 266,207 |
Senior Secured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total debt obligations | 125,000 | 125,000 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total debt obligations | 90,000 | 93,382 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total debt obligations | 3,181 | 4,681 |
New Markets Tax Credit Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total debt obligations | 11,000 | 11,000 |
Convertible Subordinated Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total debt obligations | 36,750 | 36,750 |
Capital Leases And Financed Software [Member] | ||
Debt Instrument [Line Items] | ||
Total debt obligations | $ 3,564 | $ 3,961 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - Omnibus Equity Incentive Plan 2011 [Member] $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 25, 2016USD ($)$ / sharesshares | |
Number of shares available for grant | 656,150 |
Restricted Stock Awards [Member] | |
Number of shares granted | 120,325 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 20.23 |
Description of vesting term | These awards are a mix of time and performance based grants which will vest over periods of two to four years. |
Recognized expense | $ | $ 53 |
Prior period recognized expense | $ | $ 451 |
Number of nonvested shares outstanding | 322,262 |
Total unrecognized compensation cost | $ | $ 5,444 |
Weighted average remaining term | 21 months |
Performance-Based Restricted Share [Member] | |
Number of nonvested shares outstanding | 1,463 |
Weighted average remaining term | 26 months |
Time-Based Restricted Share [Member] | |
Number of nonvested shares outstanding | 3,981 |
Weighted average remaining term | 19 months |
Non-Qualified Stock Options [Member] | |
Number of shares granted | 259,577 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 7.82 |
Description of vesting term | These awards vest over a period of three years and require the Companys stock to trade at or above $30 per share for 20 consecutive days within four years of issuance to meet the market condition threshold. |
Recognized expense | $ | $ 56 |
Related Parties (Details Narrat
Related Parties (Details Narrative) $ in Thousands | 3 Months Ended | |
Mar. 25, 2016USD ($)N | Mar. 27, 2015USD ($) | |
Related Party Transaction [Line Items] | ||
Ownership interest in facilities owned by entities controlled by company's stockholders | 100.00% | |
Number of warehouses leased from related parties | N | 2 | |
Expenses related to warehouse facilities | $ 216 | $ 412 |
Architexture Studios, Inc. [Member] | ||
Related Party Transaction [Line Items] | ||
Purchase of products | 231 | 134 |
TJ Management Co. LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Expenses related to warehouse facilities | $ 52 | |
Equity interest in related parties | 16.67% | |
Old World Provisions [Member] | ||
Related Party Transaction [Line Items] | ||
Purchase of products | $ 148 | |
Christopher Pappas [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 26 | 27 |
Equity interest in related parties | 8.33% | |
Theresa Lincoln [Member] | TJ Management Co. LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Expenses related to warehouse facilities | $ 56 | |
Equity interest in related parties | 50.00% | |
C. Pappas, J. Couri and S. Hanson [Member] | Interest in Aircraft [Member] | ||
Related Party Transaction [Line Items] | ||
Equity interest in related parties | 50.00% | |
Aircraft rental expenses | $ 0 | $ 32 |
John Pappas [Member] | ||
Related Party Transaction [Line Items] | ||
Equity interest in related parties | 8.33% | |
Dean Facatselis [Member] | ||
Related Party Transaction [Line Items] | ||
Equity interest in related parties | 8.33% | |
John DeBenedetti [Member] | TJ Management Co. LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Equity interest in related parties | 50.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) $ in Thousands | Mar. 25, 2016USD ($) |
TCW Leasing Co LLC [Member] | |
Potential obligation under gurantee | $ 5,498 |