Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 30, 2017 | Feb. 01, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 30, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | PFGC | |
Entity Registrant Name | Performance Food Group Company | |
Entity Central Index Key | 1,618,673 | |
Current Fiscal Year End Date | --07-01 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 104,000,540 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 30, 2017 | Jul. 01, 2017 | |
Current assets: | |||
Cash | $ 10.1 | $ 8.1 | |
Accounts receivable, less allowances of $22.0 and $17.0 | 1,034.9 | 1,028.5 | |
Inventories, net | 1,043.4 | 1,013.3 | |
Prepaid expenses and other current assets | 51.6 | 35 | |
Total current assets | 2,140 | 2,084.9 | |
Goodwill | 740.1 | 718.6 | |
Other intangible assets, net | 206.8 | 201.1 | |
Property, plant and equipment, net | 734.9 | 740.7 | |
Restricted cash | [1] | 12.9 | 12.9 |
Other assets | 47.9 | 45.9 | |
Total assets | 3,882.6 | 3,804.1 | |
Current liabilities: | |||
Outstanding checks in excess of deposits | 181.4 | 218.2 | |
Trade accounts payable | 886.9 | 907.1 | |
Accrued expenses | 204.8 | 246 | |
Long-term debt-current installments | 5.8 | ||
Capital lease obligations-current installments | 7 | 5.9 | |
Derivative liabilities | 0.3 | ||
Total current liabilities | 1,280.1 | 1,383.3 | |
Long-term debt | 1,358.7 | 1,241.9 | |
Deferred income tax liability, net | 66 | 103 | |
Capital lease obligations, excluding current installments | 47.4 | 44 | |
Other long-term liabilities | 114.9 | 106.4 | |
Total liabilities | 2,867.1 | 2,878.6 | |
Commitments and contingencies (Note 9) | |||
Shareholders' equity: | |||
Common Stock: $0.01 par value per share, 1.0 billion shares authorized, 102.3 million shares issued and outstanding as of December 30, 2017; 1.0 billion shares authorized, 100.8 million shares issued and outstanding as of July 1, 2017 | 1 | 1 | |
Additional paid-in capital | 842.9 | 855.5 | |
Accumulated other comprehensive income, net of tax expense of $2.2 and $1.5 | 4.4 | 2.4 | |
Retained earnings | 167.2 | 66.6 | |
Total shareholders' equity | 1,015.5 | 925.5 | |
Total liabilities and shareholders' equity | $ 3,882.6 | $ 3,804.1 | |
[1] | Restricted cash represents the amounts required by insurers to collateralize a part of the deductibles for the Company's workers' compensation and liability claims. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 30, 2017 | Jul. 01, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 22 | $ 17 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 102,300,000 | 100,800,000 |
Common stock, shares outstanding | 102,300,000 | 100,800,000 |
Accumulated other comprehensive income, tax expense | $ 2.2 | $ 1.5 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 4,311.1 | $ 4,051.8 | $ 8,676 | $ 8,097.9 |
Cost of goods sold | 3,743.5 | 3,534.6 | 7,553.7 | 7,069.4 |
Gross profit | 567.6 | 517.2 | 1,122.3 | 1,028.5 |
Operating expenses | 518.5 | 465.9 | 1,022.7 | 945.6 |
Operating profit | 49.1 | 51.3 | 99.6 | 82.9 |
Other expense, net: | ||||
Interest expense | 15.1 | 13.6 | 29.7 | 26.5 |
Other, net | (0.1) | (0.5) | (0.4) | (1.3) |
Other expense, net | 15 | 13.1 | 29.3 | 25.2 |
Income before taxes | 34.1 | 38.2 | 70.3 | 57.7 |
Income tax (benefit) expense | (43.9) | 15.3 | (30.3) | 22.6 |
Net income | $ 78 | $ 22.9 | $ 100.6 | $ 35.1 |
Weighted-average common shares outstanding: | ||||
Basic | 101.4 | 100.1 | 101.2 | 100 |
Diluted | 104.5 | 102.7 | 104.5 | 102.5 |
Earnings per common share: | ||||
Basic | $ 0.77 | $ 0.23 | $ 0.99 | $ 0.35 |
Diluted | $ 0.75 | $ 0.22 | $ 0.96 | $ 0.34 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 78 | $ 22.9 | $ 100.6 | $ 35.1 |
Interest rate swaps: | ||||
Change in fair value, net of tax | 1.8 | 5 | 1.8 | 6 |
Reclassification adjustment, net of tax | 0.2 | 0.7 | 0.2 | 1.5 |
Other comprehensive income | 2 | 5.7 | 2 | 7.5 |
Total comprehensive income | $ 80 | $ 28.6 | $ 102.6 | $ 42.6 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | (Accumulated Deficit) Retained Earnings [Member] | |
Balance Beginning at Jul. 02, 2016 | $ 802.8 | $ 1 | $ 836.8 | $ (5.8) | $ (29.2) | |
Balance Beginning, shares at Jul. 02, 2016 | 99.9 | |||||
Issuance of common stock under stock-based compensation plans | (0.3) | (0.3) | ||||
Issuance of common stock under stock-based compensation plans, shares | 0.2 | |||||
Net income | 35.1 | 35.1 | ||||
Interest rate swaps | 7.5 | 7.5 | ||||
Stock-based compensation expense | 8.1 | 8.1 | ||||
Change in accounting principle | [1] | 0.4 | 0.9 | (0.5) | ||
Balance Ending at Dec. 31, 2016 | 853.6 | $ 1 | 845.5 | 1.7 | 5.4 | |
Balance Ending, shares at Dec. 31, 2016 | 100.1 | |||||
Balance Beginning at Jul. 01, 2017 | $ 925.5 | $ 1 | 855.5 | 2.4 | 66.6 | |
Balance Beginning, shares at Jul. 01, 2017 | 100.8 | 100.8 | ||||
Issuance of common stock under stock-based compensation plans | $ (27.1) | (27.1) | ||||
Issuance of common stock under stock-based compensation plans, shares | 1.5 | |||||
Net income | 100.6 | 100.6 | ||||
Interest rate swaps | 2 | 2 | ||||
Stock-based compensation expense | 14.5 | 14.5 | ||||
Balance Ending at Dec. 30, 2017 | $ 1,015.5 | $ 1 | $ 842.9 | $ 4.4 | $ 167.2 | |
Balance Ending, shares at Dec. 30, 2017 | 102.3 | 102.3 | ||||
[1] | As of the beginning of fiscal 2017, the Company elected to early adopt the provisions of ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The Company has made a policy election to account for forfeitures as they occur and recorded a cumulative-effect adjustment to Accumulated Deficit as of the date of adoption. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | ||
Cash flows from operating activities: | |||
Net income | $ 100.6 | $ 35.1 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | |||
Depreciation | 49.1 | 43.3 | |
Amortization of intangible assets | 14.6 | 16.6 | |
Amortization of deferred financing costs and other | 2.4 | 2.2 | |
Provision for losses on accounts receivables | 7.5 | 6.8 | |
Expense related to modification of debt | 0.1 | ||
Stock-based compensation expense | 14.5 | 8.1 | |
Deferred income tax benefit | (37.8) | (4) | |
Change in fair value of derivative assets and liabilities | (0.2) | (1.8) | |
Other | 7.3 | 1.1 | |
Changes in operating assets and liabilities, net | |||
Accounts receivable | (1.2) | (15.1) | |
Inventories | (14.3) | (54.4) | |
Prepaid expenses and other assets | (15) | 12.5 | |
Trade accounts payable | (29.4) | (68.2) | |
Outstanding checks in excess of deposits | (36.8) | 29.7 | |
Accrued expenses and other liabilities | (28.7) | (37.5) | |
Net cash provided by (used in) operating activities | 32.6 | (25.5) | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (38.5) | (79.9) | |
Net cash paid for acquisitions | (63.2) | (82.1) | |
Proceeds from sale of property, plant and equipment | 0.3 | 0.2 | |
Net cash used in investing activities | (101.4) | (161.8) | |
Cash flows from financing activities: | |||
Net borrowings under ABL Facility | 116.4 | 192.8 | |
Payment of Promissory Note | (6) | ||
Cash paid for shares withheld to cover taxes | (27.8) | (1.1) | |
Cash paid for acquisitions | (7.4) | (0.8) | |
Other financing activities | (4.4) | (2.8) | |
Net cash provided by financing activities | 70.8 | 188.1 | |
Net increase in cash and restricted cash | 2 | 0.8 | |
Cash and restricted cash, beginning of period | 21 | 23.8 | [1] |
Cash and restricted cash, end of period | 23 | 24.6 | [1] |
Purchases of property, plant and equipment, financed | 3.2 | ||
Debt assumed through new capital lease obligations | 7.7 | 19.6 | |
Disposal of property, plant and equipment under sale-leaseback transaction | 3.2 | ||
Interest | 28.1 | 23.2 | |
Income taxes, net of refunds | $ 25.1 | $ 10.2 | |
[1] | The consolidated statement of cash flows for the six months ended December 31, 2016 has been adjusted to reflect the adoption of ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The consolidated statements of cash flows explain the change during the periods in the total of cash and restricted cash. Therefore, restricted cash activity is included with cash when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Refer to Note 3 for further discussion. |
Consolidated Statements of Cas8
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Dec. 30, 2017 | Jul. 01, 2017 | Dec. 31, 2016 | [2] | Jul. 02, 2016 | [2] | |
Statement of Cash Flows [Abstract] | |||||||
Cash | $ 10.1 | $ 8.1 | |||||
Restricted cash | [1] | 12.9 | 12.9 | ||||
Total cash and restricted cash | $ 23 | $ 21 | $ 24.6 | $ 23.8 | |||
[1] | Restricted cash represents the amounts required by insurers to collateralize a part of the deductibles for the Company's workers' compensation and liability claims. | ||||||
[2] | The consolidated statement of cash flows for the six months ended December 31, 2016 has been adjusted to reflect the adoption of ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The consolidated statements of cash flows explain the change during the periods in the total of cash and restricted cash. Therefore, restricted cash activity is included with cash when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Refer to Note 3 for further discussion. |
Summary of Business Activities
Summary of Business Activities | 6 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Business Activities | 1. Summary of Business Activities Business Overview Performance Food Group Company, through its subsidiaries, markets and distributes national and company-branded food and food-related products to customer locations across the United States. The Company serves both of the major customer types in the restaurant industry: (i) independent, or “Street” customers, and (ii) multi-unit, or “Chain” customers, which include regional and national family and casual dining restaurant chains, fast casual chains, and quick-service restaurants. The Company also serves schools, healthcare facilities, business and industry locations, and other institutional customers. Secondary Offerings In September 2017, November 2017 and December 2017 Wellspring Capital Management (“Wellspring”) sold an aggregate of 16,272,914 shares of the Company’s common stock in transactions registered under the Securities Act. The Company did not receive any proceeds from these sales. As a result of these sales, Wellspring no longer beneficially owns any shares of the Company’s common stock. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 2. Basis of Presentation The consolidated financial statements have been prepared by the Company, without audit, with the exception of the July 1, 2017 consolidated balance sheet, which was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K 10-K”). The The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates used by management are related to the accounting for the allowance for doubtful accounts, reserve for inventories, impairment testing of goodwill and other intangible assets, acquisition accounting, reserves for claims and recoveries under insurance programs, vendor rebates and other promotional incentives, bonus accruals, depreciation, amortization, determination of useful lives of tangible and intangible assets, and income taxes. Actual results could differ from these estimates. The results of operations are not necessarily indicative of the results to be expected for the full fiscal year. Therefore, these financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K. Certain |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 6 Months Ended |
Dec. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements | 3. Recently Issued Accounting Pronouncements Recently Adopted Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments 2016-15 In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash beginning-of-period end-of-period 2016-18 beginning-of-period end-of-period In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ASU 2017-04 2017-04 Recently Issued Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Topic 606 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Companies may either use a full retrospective or modified retrospective approach for adoption of Topic 606. The Company will adopt the guidance in fiscal 2019 and currently plans to implement the new standard using the modified retrospective approach. However, our method is subject to change as we finalize our adoption approach for the new standard. The Company has conducted a preliminary assessment and anticipates that the timing of recognition of revenue to be substantially unchanged under the new standard. The amended guidance also requires additional quantitative and qualitative disclosures, which the Company believes will be significant to the consolidated financial statements. The Company is in the process of designing and implementing relevant controls related to adoption of the new standard. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) 10-K. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. |
Business Combinations
Business Combinations | 6 Months Ended |
Dec. 30, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | 4. Business Combinations During the first six months of fiscal 2018, the Company paid cash of $64.9 million for an acquisition and during the first six months of fiscal 2017, the Company paid cash of $82.8 million for four acquisitions. These acquisitions did not materially affect the Company’s results of operations. The following table summarizes the preliminary purchase price allocation for each major class of assets acquired and liabilities assumed for the fiscal 2018 acquisition. (In millions) Fiscal 2018 Net working capital $ 21.4 Goodwill 21.1 Other intangible assets 20.6 Property, plant and equipment 1.8 Total purchase price $ 64.9 The goodwill is a result of expected synergies from combined operations of the acquisition and the Company. The following table presents the changes in the carrying amount of goodwill: (In millions) Performance PFG Vistar Corporate Total Balance as of July 1, 2017 $ 428.2 $ 166.5 $ 64.9 $ 59.0 $ 718.6 Acquisitions - current year — — 21.1 — 21.1 Adjustments related to prior year acquisitions 0.1 — — 0.3 0.4 Balance as of December 30, 2017 $ 428.3 $ 166.5 $ 86.0 $ 59.3 $ 740.1 The adjustments related to prior year acquisitions are the result of net working capital adjustments. Subsequent to December 30, 2017, the Company paid $6.6 million for an acquisition. The Company is in the process of determining the fair values of the assets acquired and liabilities assumed. |
Debt
Debt | 6 Months Ended |
Dec. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 5. Debt The Company is a holding company and conducts its operations through its subsidiaries, which have incurred or guaranteed indebtedness as described below. Debt consisted of the following: (In millions) As of As of ABL $ 1,016.3 $ 899.9 5.500% Notes due 2024 350.0 350.0 Promissory Note — 6.0 Less: Original issue discount and deferred financing costs (7.6 ) (8.2 ) Long-term debt 1,358.7 1,247.7 Capital and finance lease obligations 54.4 49.9 Total debt 1,413.1 1,297.6 Less: current installments (7.0 ) (11.7 ) Total debt, excluding current installments $ 1,406.1 $ 1,285.9 ABL Facility PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, is a party to the Second Amended and Restated Credit Agreement dated February 1, 2016, as amended by the First Amendment to Second Amended and Restated Credit Agreement dated August 3, 2017 (the “ABL Facility”). The ABL Facility has an aggregate principal amount of $1.95 billion and matures February 2021. The ABL Facility is secured by the majority of the tangible assets of PFGC and its subsidiaries. Performance Food Group, Inc., a wholly-owned subsidiary of PFGC, is the lead borrower under the ABL Facility, which is jointly and severally guaranteed by PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). Borrowings under the ABL Facility bear interest, at Performance Food Group, Inc.’s option, at (a) the Base Rate (defined as the greater of (i) the Federal Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus 1.0%) plus a spread or (b) LIBOR plus a spread. The ABL Facility also provides for an unused commitment fee ranging from 0.25% to 0.375%. The following table summarizes outstanding borrowings, availability, and the average interest rate under the ABL Facility: (Dollars in millions) As of As of Aggregate borrowings $ 1,016.3 $ 899.9 Letters of credit 123.6 105.5 Excess availability, net of lenders’ reserves of $12.2 and $11.2 577.8 594.6 Average interest rate 2.98 % 2.59 % Senior Notes On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of its 5.500% Senior Notes due 2024 (the “Notes”), pursuant to an indenture dated as of May 17, 2016. The Notes are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes are not guaranteed by Performance Food Group Company. The ABL Facility and the indenture governing the Notes contain customary restrictive covenants under which all of the net assets of PFGC and its subsidiaries are restricted from distribution to Performance Food Group Company, except for approximately $302.0 million of restricted payment capacity available under such debt agreements, as of December 30, 2017. Such minimum estimated restricted payment capacity is calculated based on the most restrictive of our debt agreements and may fluctuate from period to period, which fluctuations may be material. Our restricted payment capacity under other debt instruments to which the Company is subject may be materially higher than the foregoing estimate. Unsecured Subordinated Promissory Note In connection with an acquisition, Performance Food Group, Inc. issued a $6.0 million interest only, unsecured subordinated promissory note on December 21, 2012. The $6.0 million promissory note was paid off in December 2017. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 6 Months Ended |
Dec. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | 6. Derivatives and Hedging Activities Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and diesel fuel costs. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and payments related to the Company’s borrowings and diesel fuel purchases. The effective portion of changes in the fair value of derivatives that are both designated and qualify as cash flow hedges is recorded in other comprehensive income and subsequently reclassified into earnings in the period that the hedged transaction occurs. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. Since the Company has a substantial portion of its debt in variable-rate instruments, it accomplishes this objective with interest rate swaps. These swaps are designated as cash flow hedges and involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. All of the Company’s interest rate swaps are designated and qualify as cash flow hedges. As of December 30, 2017, Performance Food Group, Inc. had eight interest rate swaps with a combined $650 million notional amount. The following table summarizes the outstanding Swap Agreements as of December 30, 2017 (in millions): Effective Date Maturity Date Notional Amount Fixed Rate Swapped August 9, 2013 August 9, 2018 $ 200.0 1.51 % June 30, 2017 June 30, 2019 50.0 1.13 % June 30, 2017 June 30, 2020 50.0 1.23 % June 30, 2017 June 30, 2020 50.0 1.25 % June 30, 2017 June 30, 2020 50.0 1.26 % August 9, 2018 August 9, 2021 75.0 1.21 % August 9, 2018 August 9, 2021 75.0 1.20 % June 30, 2020 December 31, 2021 100.0 2.16 % Hedges of Forecasted Diesel Fuel Purchases From time to time, Performance Food Group, Inc. enters into costless collar arrangements to manage its exposure to variability in cash flows expected to be paid for its forecasted purchases of diesel fuel. As of December 30, 2017, Performance Food Group, Inc. was a party to two such arrangements, with an aggregate 4.5 million gallon original notional amount. The 4.5 million gallon forecasted purchases of diesel fuel are expected to be made between January 1, 2018 and June 30, 2018. The fuel collar instruments do not qualify for hedge accounting. Accordingly, the derivative instruments are recorded as an asset or liability on the balance sheet at fair value and any changes in fair value are recorded in the period of change as unrealized gains or losses on fuel hedging instruments and included in Other, net in the accompanying consolidated statements of operations. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Dec. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 7. Fair Value of Financial Instruments The carrying values of cash, accounts receivable, outstanding checks in excess of deposits, trade accounts payable, and accrued expenses approximate their fair values because of the relatively short maturities of those instruments. The derivative assets and liabilities are recorded at fair value on the balance sheet. The fair value of long-term debt, which has a carrying value of $1,358.7 million and $1,247.7 million, is $1,378.1 million and $1,258.3 million at December 30, 2017 and July 1, 2017, respectively, and is determined by reviewing current market pricing related to comparable debt issued at the time of the balance sheet date, and is considered a Level 2 measurement. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes The determination of the Company’s overall effective tax rate requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. The effective tax rate reflects the income earned and taxed in various United States federal and state jurisdictions. Tax law changes, increases and decreases in temporary and permanent differences between book and tax items, tax credits and the Company’s change in income in each jurisdiction all affect the overall effective tax rate. It is the Company’s practice to recognize interest and penalties related to uncertain tax positions in income tax expense. On December 22, 2017, H.R.1, known as the “Tax Cuts and Jobs Act,” (the “Act”) was signed into law. The Act makes broad and complex changes to the U.S. Internal Revenue Code including, but not limited to: reducing the U.S. federal corporate tax rate from 35% to 21%; creating a new limitation on deductible interest expense; repealing the domestic production activity deduction, providing for bonus depreciation that will allow for full expensing of certain qualified property; and limiting other deductions. The Company’s net deferred tax liability of $103.0 million as of July 1, 2017 was determined using the federal corporate tax rate of 35% prior to the passage of the Act. The Act reduces the federal corporate tax rate to 21%, effective January 1, 2018. Consequently, we have recorded a $10.2 million decrease in deferred tax assets and a $47.6 million decrease in deferred tax liabilities with a corresponding net benefit to deferred income tax expense of $37.4 million for the three and six months ended December 30, 2017. The SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Act. SAB 118 provides a measurement period that should not extend beyond one year from the Act enactment date for companies to complete the accounting under FASB ASC 740 – Income Taxes. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Act. The Company has not identified any items for which the income tax effects of the Act have not been substantially completed. The Company’s effective tax rate was -128.3% -43.1% (Dollars in millions) Three Months Ended December 30, 2017 Six Months Ended December 30, 2017 Income Tax Effective Tax Rate Income Tax Effective Tax Rate Income tax benefit, reported $ (43.9 ) -128.3 % $ (30.3 ) -43.1 % Revaluation of net deferred income tax liability 37.4 109.6 % 37.4 53.3 % Stock-based compensation – performance vesting 15.4 45.2 % 15.4 21.9 % Impact of rate reduction on first quarter fiscal 2018 income 2.5 7.4 % — — Income tax expense, excluding benefits $ 11.4 33.9 % $ 22.5 32.1 % As of December 30, 2017 and July 1, 2017, the Company had net deferred tax assets of $28.4 million and $43.1 million, respectively, and deferred tax liabilities of $94.4 million and $146.1 million, respectively. The Company believes that it is more likely than not that the remaining deferred tax assets will be realized. The Company records a liability for Uncertain Tax Positions in accordance with FASB ASC 740-10-25, Income Taxes – General - Recognition |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Purchase Obligations The Company had outstanding contracts and purchase orders for capital projects and services totaling $10.1 million at December 30, 2017. Amounts due under these contracts were not included on the Company’s consolidated balance sheet as of December 30, 2017. Subsequent to December 30, 2017, the Company entered into an additional contract totaling $8.8 million. Guarantees Subsidiaries of the Company have entered into numerous operating leases, including leases of buildings, equipment, tractors, and trailers. Certain of the leases for tractors, trailers, and other vehicles and equipment, provide for residual value guarantees to the lessors. Circumstances that would require the subsidiary to perform under the guarantees include either (1) default on the leases with the leased assets being sold for less than the specified residual values in the lease agreements, or (2) decisions not to purchase the assets at the end of the lease terms combined with the sale of the assets, with sales proceeds less than the residual value of the leased assets specified in the lease agreements. Residual value guarantees under these operating lease agreements typically range between 7% and 20% of the value of the leased assets at inception of the lease. These leases have original terms ranging from 4 to 8 years and expiration dates ranging from 2018 to 2025. As of December 30, 2017, the undiscounted maximum amount of potential future payments for lease guarantees totaled approximately $28.4 million, which would be mitigated by the fair value of the leased assets at lease expiration. The assessment as to whether it is probable that subsidiaries of the Company will be required to make payments under the terms of the guarantees is based upon their actual and expected loss experience. Consistent with the requirements of FASB ASC 460-10-50, Guarantees-Overall-Disclosure, The Company from time to time enters into certain types of contracts that contingently require it to indemnify various parties against claims from third parties. These contracts primarily relate to: (i) certain real estate leases under which subsidiaries of the Company may be required to indemnify property owners for environmental and other liabilities and other claims arising from their use of the applicable premises; (ii) certain agreements with the Company’s officers, directors, and employees under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship; and (iii) customer agreements under which the Company may be required to indemnify customers for certain claims brought against them with respect to the supplied products. Generally, a maximum obligation under these contracts is not explicitly stated. Because the obligated amounts associated with these types of agreements are not explicitly stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, the Company has not been required to make payments under these obligations and, therefore, no liabilities have been recorded for these obligations in the Company’s consolidated balance sheets. Litigation The Company is engaged in various legal proceedings that have arisen but have not been fully adjudicated. The likelihood of loss arising from these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible to probable. When losses are probable and reasonably estimable, they have been accrued. Based on estimates of the range of potential losses associated with these matters, management does not believe that the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect upon the consolidated financial position or results of operations of the Company. However, the final results of legal proceedings cannot be predicted with certainty and, if the Company failed to prevail in one or more of these legal matters, and the associated realized losses were to exceed the Company’s current estimates of the range of potential losses, the Company’s consolidated financial position or results of operations could be materially adversely affected in future periods. U.S. Equal Employment Opportunity Commission Lawsuit Wilder, et al. v. Roma Food Enterprises, Inc., et al. Tax Liabilities The Company is subject to customary audits by authorities in the jurisdictions where it conducts business in the United States, which may result in assessments of additional taxes. |
Related-Party Transactions
Related-Party Transactions | 6 Months Ended |
Dec. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 10. Related-Party Transactions Transaction and Advisory Fee Agreement The Company was a party to an advisory fee agreement pursuant to which affiliates of The Blackstone Group L.P. and Wellspring provided management certain strategic and structuring advice and certain monitoring, advising, and consulting services to the Company. The advisory fee agreement provided for the payment by the Company of an annual advisory fee and the reimbursement of out of pocket expenses. In fiscal 2018 the Company will pay a total of $3.0 million related to this agreement, of which $1.5 million was paid in the second quarter of fiscal 2018 and during the six months ended December 30, 2017 and $1.5 million will be paid in the third quarter of fiscal 2018. The payments made under this agreement totaled $5.5 million during the six months ended December 31, 2016. Under its terms, this agreement terminated on October 6, 2017. Other The Company participates in and has an equity method investment in a purchasing alliance that was formed to obtain better pricing, to expand product options, to reduce internal costs, and to achieve greater inventory turnover. The Company’s investment in the purchasing alliance was $4.7 million as of December 30, 2017 and $4.6 million as of July 1, 2017. During the three-month periods ended December 30, 2017 and December 31, 2016, the Company recorded purchases of $177.5 million and $176.6 million, respectively, through the purchasing alliance. During the six-month |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Dec. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 11. Earnings Per Share Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted EPS is calculated using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. In computing diluted EPS, the average closing stock price for the period is used in determining the number of shares assumed to be purchased with the proceeds from the exercise of stock options under the treasury stock method. Potential common shares of 0.7 million and 0.7 million for the three and six months ended December 30, 2017, respectively, were not included in computing diluted earnings per share because the effect would have been antidilutive. Potential common shares of 1.2 million and 1.0 million for the three and six months ended December 31, 2016, respectively, were not included in computing diluted earnings per share because the effect would have been antidilutive. A reconciliation of the numerators and denominators for the basic and diluted EPS computations is as follows: (In millions, except per share amounts) Three months Three months Six months Six months Numerator: Net income $ 78.0 $ 22.9 $ 100.6 $ 35.1 Denominator: Weighted-average common shares outstanding 101.4 100.1 101.2 100.0 Dilutive effect of share-based awards 3.1 2.6 3.3 2.5 Weighted-average dilutive shares outstanding 104.5 102.7 104.5 102.5 Basic earnings per share $ 0.77 $ 0.23 $ 0.99 $ 0.35 Diluted earnings per share $ 0.75 $ 0.22 $ 0.96 $ 0.34 |
Segment Information
Segment Information | 6 Months Ended |
Dec. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | 12. Segment Information The Company has three reportable segments, as defined by ASC 280 Segment Reporting Corporate & All Other is comprised of corporate overhead and certain operations that are not considered separate reportable segments based on their size. This includes the operations of the Company’s internal logistics unit responsible for managing and allocating inbound logistics revenue and expense, as well as the operations of certain recent acquisitions. In the first quarter of fiscal 2018, the Company reorganized its information technology department, and expenses associated with business application teams are now included in the segments results. The EBITDA for PFS, Vistar and Corporate & All Other for the three and six months ended December 31, 2016 has been adjusted to reflect this change. (In millions) PFS PFG Vistar Corporate Eliminations Consolidated For the three months ended December 30, 2017 Net external sales $ 2,532.8 $ 888.1 $ 838.3 $ 51.9 $ — $ 4,311.1 Inter-segment sales 2.5 0.1 0.6 58.7 (61.9 ) — Total sales 2,535.3 888.2 838.9 110.6 (61.9 ) 4,311.1 EBITDA 83.0 5.9 34.0 (41.4 ) — 81.5 Depreciation and amortization 14.6 3.7 6.9 7.1 — 32.3 Capital expenditures 9.3 4.1 5.3 3.3 — 22.0 For the three months ended December 31, 2016 Net external sales $ 2,356.8 $ 933.4 $ 737.4 $ 24.2 $ — $ 4,051.8 Inter-segment sales 1.4 0.1 0.5 53.7 (55.7 ) — Total sales 2,358.2 933.5 737.9 77.9 (55.7 ) 4,051.8 EBITDA 75.5 6.7 33.0 (33.0 ) — 82.2 Depreciation and amortization 14.0 3.6 6.6 6.2 — 30.4 Capital expenditures 34.1 2.7 0.8 7.5 — 45.1 (In millions) PFS PFG Vistar Corporate Eliminations Consolidated For the six months ended December 30, 2017 Net external sales $ 5,157.3 $ 1,784.1 $ 1,634.5 $ 100.1 $ — $ 8,676.0 Inter-segment sales 5.1 0.2 1.2 118.6 (125.1 ) — Total sales 5,162.4 1,784.3 1,635.7 218.7 (125.1 ) 8,676.0 EBITDA 161.8 11.1 59.8 (69.0 ) — 163.7 Depreciation and amortization 28.4 7.3 13.2 14.8 — 63.7 Capital expenditures 20.5 6.3 5.6 6.1 — 38.5 For the six months ended December 31, 2016 Net external sales $ 4,791.5 $ 1,800.1 $ 1,478.2 $ 28.1 $ — $ 8,097.9 Inter-segment sales 3.1 0.7 1.2 108.7 (113.7 ) — Total sales 4,794.6 1,800.8 1,479.4 136.8 (113.7 ) 8,097.9 EBITDA 148.1 10.6 54.8 (69.4 ) — 144.1 Depreciation and amortization 27.1 8.8 11.8 12.2 — 59.9 Capital expenditures 53.8 4.9 2.2 19.0 — 79.9 Total assets by reportable segment, excluding intercompany receivables between segments, are as follows: (In millions) As of As of PFS $ 2,162.3 $ 2,161.2 PFG Customized 645.9 667.1 Vistar 754.0 654.5 Corporate & All Other 320.4 321.3 Total assets $ 3,882.6 $ 3,804.1 |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Dec. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | 13. Stock-based Compensation Performance Food Group Company provides compensation benefits to employees and non-employee The Tranche II and Tranche III options and restricted stock granted under the 2007 Option Plan are subject to both time and performance vesting, including performance criteria based on the internal rate of return and sponsor cash inflows as outlined in the 2007 Option Plan. During the second quarter of fiscal 2018, Wellspring sold all of their remaining interest in shares of the Company’s common stock. On December 7, 2017, the Company determined that the performance criteria for the Tranche II and III awards had been met and 2.1 million shares of restricted stock and 1.4 million options vested. In the second quarter of fiscal 2018, the Company recognized approximately $6.3 million of accelerated compensation expense in connection with the vesting of the Tranche II and III awards. Based on the performance achieved, total compensation expense for the Tranche II and III awards was $24.9 million. The excess tax benefit recognized in the consolidated statements of operations for the three and six months ended December 30, 2017 was $15.4 million. |
Recently Issued Accounting Pr22
Recently Issued Accounting Pronouncements (Policies) | 6 Months Ended |
Dec. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted Accounting Pronouncements | Adopted Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments 2016-15 In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash beginning-of-period end-of-period 2016-18 beginning-of-period end-of-period In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ASU 2017-04 2017-04 Recently Issued Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Topic 606 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Companies may either use a full retrospective or modified retrospective approach for adoption of Topic 606. The Company will adopt the guidance in fiscal 2019 and currently plans to implement the new standard using the modified retrospective approach. However, our method is subject to change as we finalize our adoption approach for the new standard. The Company has conducted a preliminary assessment and anticipates that the timing of recognition of revenue to be substantially unchanged under the new standard. The amended guidance also requires additional quantitative and qualitative disclosures, which the Company believes will be significant to the consolidated financial statements. The Company is in the process of designing and implementing relevant controls related to adoption of the new standard. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) 10-K. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Business Combinations [Abstract] | |
Summary of Preliminary Purchase Price Allocation of Major Class of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary purchase price allocation for each major class of assets acquired and liabilities assumed for the fiscal 2018 acquisition. (In millions) Fiscal 2018 Net working capital $ 21.4 Goodwill 21.1 Other intangible assets 20.6 Property, plant and equipment 1.8 Total purchase price $ 64.9 |
Changes in Carrying Amount of Goodwill | The following table presents the changes in the carrying amount of goodwill: (In millions) Performance PFG Vistar Corporate Total Balance as of July 1, 2017 $ 428.2 $ 166.5 $ 64.9 $ 59.0 $ 718.6 Acquisitions - current year — — 21.1 — 21.1 Adjustments related to prior year acquisitions 0.1 — — 0.3 0.4 Balance as of December 30, 2017 $ 428.3 $ 166.5 $ 86.0 $ 59.3 $ 740.1 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Schedule of Debt | Debt consisted of the following: (In millions) As of As of ABL $ 1,016.3 $ 899.9 5.500% Notes due 2024 350.0 350.0 Promissory Note — 6.0 Less: Original issue discount and deferred financing costs (7.6 ) (8.2 ) Long-term debt 1,358.7 1,247.7 Capital and finance lease obligations 54.4 49.9 Total debt 1,413.1 1,297.6 Less: current installments (7.0 ) (11.7 ) Total debt, excluding current installments $ 1,406.1 $ 1,285.9 |
ABL Facility [Member] | |
Summary of Outstanding Borrowings, Availability, and Average Interest Rate | The following table summarizes outstanding borrowings, availability, and the average interest rate under the ABL Facility: (Dollars in millions) As of As of Aggregate borrowings $ 1,016.3 $ 899.9 Letters of credit 123.6 105.5 Excess availability, net of lenders’ reserves of $12.2 and $11.2 577.8 594.6 Average interest rate 2.98 % 2.59 % |
Derivatives and Hedging Activ25
Derivatives and Hedging Activities (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Outstanding Swap Agreements | The following table summarizes the outstanding Swap Agreements as of December 30, 2017 (in millions): Effective Date Maturity Date Notional Amount Fixed Rate Swapped August 9, 2013 August 9, 2018 $ 200.0 1.51 % June 30, 2017 June 30, 2019 50.0 1.13 % June 30, 2017 June 30, 2020 50.0 1.23 % June 30, 2017 June 30, 2020 50.0 1.25 % June 30, 2017 June 30, 2020 50.0 1.26 % August 9, 2018 August 9, 2021 75.0 1.21 % August 9, 2018 August 9, 2021 75.0 1.20 % June 30, 2020 December 31, 2021 100.0 2.16 % |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The impact to the provision for stock-based compensation and the impact of the reduction in tax rate under the Act are summarized as follows: (Dollars in millions) Three Months Ended December 30, 2017 Six Months Ended December 30, 2017 Income Tax Effective Tax Rate Income Tax Effective Tax Rate Income tax benefit, reported $ (43.9 ) -128.3 % $ (30.3 ) -43.1 % Revaluation of net deferred income tax liability 37.4 109.6 % 37.4 53.3 % Stock-based compensation – performance vesting 15.4 45.2 % 15.4 21.9 % Impact of rate reduction on first quarter fiscal 2018 income 2.5 7.4 % — — Income tax expense, excluding benefits $ 11.4 33.9 % $ 22.5 32.1 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Numerators and Denominators for Basic and Diluted Earnings Per Share Computations | A reconciliation of the numerators and denominators for the basic and diluted EPS computations is as follows: (In millions, except per share amounts) Three months Three months Six months Six months Numerator: Net income $ 78.0 $ 22.9 $ 100.6 $ 35.1 Denominator: Weighted-average common shares outstanding 101.4 100.1 101.2 100.0 Dilutive effect of share-based awards 3.1 2.6 3.3 2.5 Weighted-average dilutive shares outstanding 104.5 102.7 104.5 102.5 Basic earnings per share $ 0.77 $ 0.23 $ 0.99 $ 0.35 Diluted earnings per share $ 0.75 $ 0.22 $ 0.96 $ 0.34 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | In the first quarter of fiscal 2018, the Company reorganized its information technology department, and expenses associated with business application teams are now included in the segments results. The EBITDA for PFS, Vistar and Corporate & All Other for the three and six months ended December 31, 2016 has been adjusted to reflect this change. (In millions) PFS PFG Vistar Corporate Eliminations Consolidated For the three months ended December 30, 2017 Net external sales $ 2,532.8 $ 888.1 $ 838.3 $ 51.9 $ — $ 4,311.1 Inter-segment sales 2.5 0.1 0.6 58.7 (61.9 ) — Total sales 2,535.3 888.2 838.9 110.6 (61.9 ) 4,311.1 EBITDA 83.0 5.9 34.0 (41.4 ) — 81.5 Depreciation and amortization 14.6 3.7 6.9 7.1 — 32.3 Capital expenditures 9.3 4.1 5.3 3.3 — 22.0 For the three months ended December 31, 2016 Net external sales $ 2,356.8 $ 933.4 $ 737.4 $ 24.2 $ — $ 4,051.8 Inter-segment sales 1.4 0.1 0.5 53.7 (55.7 ) — Total sales 2,358.2 933.5 737.9 77.9 (55.7 ) 4,051.8 EBITDA 75.5 6.7 33.0 (33.0 ) — 82.2 Depreciation and amortization 14.0 3.6 6.6 6.2 — 30.4 Capital expenditures 34.1 2.7 0.8 7.5 — 45.1 (In millions) PFS PFG Vistar Corporate Eliminations Consolidated For the six months ended December 30, 2017 Net external sales $ 5,157.3 $ 1,784.1 $ 1,634.5 $ 100.1 $ — $ 8,676.0 Inter-segment sales 5.1 0.2 1.2 118.6 (125.1 ) — Total sales 5,162.4 1,784.3 1,635.7 218.7 (125.1 ) 8,676.0 EBITDA 161.8 11.1 59.8 (69.0 ) — 163.7 Depreciation and amortization 28.4 7.3 13.2 14.8 — 63.7 Capital expenditures 20.5 6.3 5.6 6.1 — 38.5 For the six months ended December 31, 2016 Net external sales $ 4,791.5 $ 1,800.1 $ 1,478.2 $ 28.1 $ — $ 8,097.9 Inter-segment sales 3.1 0.7 1.2 108.7 (113.7 ) — Total sales 4,794.6 1,800.8 1,479.4 136.8 (113.7 ) 8,097.9 EBITDA 148.1 10.6 54.8 (69.4 ) — 144.1 Depreciation and amortization 27.1 8.8 11.8 12.2 — 59.9 Capital expenditures 53.8 4.9 2.2 19.0 — 79.9 |
Summary Assets by Reportable Segment, Excluding Intercompany Receivables | Total assets by reportable segment, excluding intercompany receivables between segments, are as follows: (In millions) As of As of PFS $ 2,162.3 $ 2,161.2 PFG Customized 645.9 667.1 Vistar 754.0 654.5 Corporate & All Other 320.4 321.3 Total assets $ 3,882.6 $ 3,804.1 |
Summary of Business Activities
Summary of Business Activities - Additional Information (Detail) - Common Stock [Member] - Secondary Offering [Member] - Wellspring Capital Management [Member] | 4 Months Ended |
Dec. 30, 2017USD ($)shares | |
Business Description [Line Items] | |
Number of common shares sold by selling stockholders | shares | 16,272,914 |
Proceeds from issuance of secondary offerings | $ | $ 0 |
Ownership percentage | 0.00% |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) $ in Millions | 1 Months Ended | 6 Months Ended | |
Feb. 07, 2018USD ($)Business-Combination | Dec. 30, 2017USD ($) | Dec. 31, 2016USD ($)Business-Combination | |
Business Acquisition [Line Items] | |||
Payment for acquisition | $ 63.2 | $ 82.1 | |
Number of acquisitions | Business-Combination | 4 | ||
Subsequent Event [Member] | |||
Business Acquisition [Line Items] | |||
Number of acquisitions | Business-Combination | 1 | ||
Business Acquisition Cost [Member] | |||
Business Acquisition [Line Items] | |||
Payment for acquisition | $ 64.9 | $ 82.8 | |
Business Acquisition Cost [Member] | Subsequent Event [Member] | |||
Business Acquisition [Line Items] | |||
Payment for acquisition | $ 6.6 |
Business Combinations - Summary
Business Combinations - Summary of Preliminary Purchase Price Allocation of Major Class of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Millions | Dec. 30, 2017 | Jul. 01, 2017 |
Business Acquisition [Line Items] | ||
Goodwill | $ 740.1 | $ 718.6 |
2017 Acquisitions [Member] | ||
Business Acquisition [Line Items] | ||
Net working capital | 21.4 | |
Goodwill | 21.1 | |
Other intangible assets | 20.6 | |
Property, plant and equipment | 1.8 | |
Total purchase price | $ 64.9 |
Business Combination - Changes
Business Combination - Changes in Carrying Amount of Goodwill (Detail) $ in Millions | 6 Months Ended |
Dec. 30, 2017USD ($) | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | $ 718.6 |
Acquisitions - current year | 21.1 |
Adjustments related to prior year acquisitions | 0.4 |
Goodwill, Ending Balance | 740.1 |
Performance Foodservice [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 428.2 |
Adjustments related to prior year acquisitions | 0.1 |
Goodwill, Ending Balance | 428.3 |
PFG Customized [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 166.5 |
Goodwill, Ending Balance | 166.5 |
Vistar [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 64.9 |
Acquisitions - current year | 21.1 |
Goodwill, Ending Balance | 86 |
Corporate and Other [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 59 |
Adjustments related to prior year acquisitions | 0.3 |
Goodwill, Ending Balance | $ 59.3 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Detail) - USD ($) $ in Millions | Dec. 30, 2017 | Jul. 01, 2017 |
Debt Instrument [Line Items] | ||
Less: Original issue discount and deferred financing costs | $ (7.6) | $ (8.2) |
Long-term debt | 1,358.7 | 1,247.7 |
Capital and finance lease obligations | 54.4 | 49.9 |
Total debt | 1,413.1 | 1,297.6 |
Total debt | 1,413.1 | 1,297.6 |
Less: current installments | (7) | (11.7) |
Total debt, excluding current installments | 1,406.1 | 1,285.9 |
ABL Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 1,016.3 | 899.9 |
5.500% Senior Notes due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 350 | 350 |
Unsecured Subordinated Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 6 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | May 17, 2016 | Dec. 30, 2017 | Dec. 30, 2017 | Dec. 21, 2012 |
Debt Instrument [Line Items] | ||||
Payment of promissory note | $ 6,000,000 | |||
ABL Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instruments face amount | $ 1,950,000,000 | $ 1,950,000,000 | ||
Credit facility, maturity period | 2021-02 | |||
Debt instrument description of variable rate | (a) the Base Rate (defined as the greater of (i) the Federal Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus 1.0%) plus a spread or (b) LIBOR plus a spread. | |||
ABL Facility [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, commitment fee percentage | 0.25% | |||
ABL Facility [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, commitment fee percentage | 0.375% | |||
ABL Facility [Member] | Federal Funds Effective Swap Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
ABL Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
5.500% Senior Notes due 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instruments face amount | $ 350,000,000 | |||
Debt instruments amount, interest rate | 5.50% | |||
Debt instruments maturity year | 2,024 | |||
ABL Facility and Term Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt covenant restrictive amount | 302,000,000 | $ 302,000,000 | ||
Unsecured Subordinated Promissory Note [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instruments face amount | $ 6,000,000 | |||
Payment of promissory note | $ 6,000,000 |
Debt - Summary of Outstanding B
Debt - Summary of Outstanding Borrowings, Availability, and Average Interest Rate under ABL Facility (Detail) - ABL Facility [Member] - USD ($) $ in Millions | Dec. 30, 2017 | Jul. 01, 2017 |
Debt Instrument [Line Items] | ||
Aggregate borrowings | $ 1,016.3 | $ 899.9 |
Letters of credit | 123.6 | 105.5 |
Excess availability, net of lenders' reserves of $12.2 and $11.2 | $ 577.8 | $ 594.6 |
Average interest rate | 2.98% | 2.59% |
Debt - Summary of Outstanding36
Debt - Summary of Outstanding Borrowings, Availability, and Average Interest Rate under ABL Facility (Parenthetical) (Detail) - USD ($) $ in Millions | Dec. 30, 2017 | Jul. 01, 2017 |
ABL Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt amount reserve by lender | $ 12.2 | $ 11.2 |
Derivatives and Hedging Activ37
Derivatives and Hedging Activities - Additional Information (Detail) | 6 Months Ended | |
Jun. 30, 2018gal | Dec. 30, 2017USD ($)AgreementInterest_Rates_Swapsgal | |
Derivative [Line Items] | ||
Non-monetary notional amount volume | 4,500,000 | |
Number of arrangements | Agreement | 2 | |
Scenario Forecast [Member] | ||
Derivative [Line Items] | ||
Non-monetary notional amount volume | 4,500,000 | |
Interest Rate Swaps [Member] | ||
Derivative [Line Items] | ||
Number of interest rate swaps | Interest_Rates_Swaps | 8 | |
Notional Amount | $ | $ 650,000,000 |
Derivatives and Hedging Activ38
Derivatives and Hedging Activities - Schedule of Outstanding Swap Agreements (Detail) | 6 Months Ended |
Dec. 30, 2017USD ($) | |
Interest Rate Swap Agreement One [Member] | |
Derivative [Line Items] | |
Effective Date | Aug. 9, 2013 |
Maturity Date | Aug. 9, 2018 |
Notional Amount | $ 200,000,000 |
Fixed Rate Swapped | 1.51% |
Interest Rate Swap Agreement Two [Member] | |
Derivative [Line Items] | |
Effective Date | Jun. 30, 2017 |
Maturity Date | Jun. 30, 2019 |
Notional Amount | $ 50,000,000 |
Fixed Rate Swapped | 1.13% |
Interest Rate Swap Agreement Three [Member] | |
Derivative [Line Items] | |
Effective Date | Jun. 30, 2017 |
Maturity Date | Jun. 30, 2020 |
Notional Amount | $ 50,000,000 |
Fixed Rate Swapped | 1.23% |
Interest Rate Swap Agreement Four [Member] | |
Derivative [Line Items] | |
Effective Date | Jun. 30, 2017 |
Maturity Date | Jun. 30, 2020 |
Notional Amount | $ 50,000,000 |
Fixed Rate Swapped | 1.25% |
Interest Rate Swap Agreement Five [Member] | |
Derivative [Line Items] | |
Effective Date | Jun. 30, 2017 |
Maturity Date | Jun. 30, 2020 |
Notional Amount | $ 50,000,000 |
Fixed Rate Swapped | 1.26% |
Interest Rate Swap Agreement Six [Member] | |
Derivative [Line Items] | |
Effective Date | Aug. 9, 2018 |
Maturity Date | Aug. 9, 2021 |
Notional Amount | $ 75,000,000 |
Fixed Rate Swapped | 1.21% |
Interest Rate Swap Agreement Seven [Member] | |
Derivative [Line Items] | |
Effective Date | Aug. 9, 2018 |
Maturity Date | Aug. 9, 2021 |
Notional Amount | $ 75,000,000 |
Fixed Rate Swapped | 1.20% |
Interest Rate Swap Agreement Eight [Member] | |
Derivative [Line Items] | |
Effective Date | Jun. 30, 2020 |
Maturity Date | Dec. 31, 2021 |
Notional Amount | $ 100,000,000 |
Fixed Rate Swapped | 2.16% |
Fair Value of Financial Instr39
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions | Dec. 30, 2017 | Jul. 01, 2017 |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Long-term debt | $ 1,358.7 | $ 1,247.7 |
Reported Value Measurement [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Long-term debt | 1,358.7 | 1,247.7 |
Fair Value Inputs Level 2 [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair value of long term debt | $ 1,378.1 | $ 1,258.3 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | Jan. 01, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jul. 01, 2017 |
Income Tax Contingency [Line Items] | ||||||
Total net deferred income tax liability | $ 103 | |||||
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 28.00% | 35.00% | 28.00% | 35.00% | 35.00% | |
Decrease in deferred tax assets | $ (10.2) | |||||
Decrease in deferred tax liabilities | (47.6) | |||||
Deferred income tax benefit revalued amount | $ 37.4 | $ 37.4 | ||||
Effective income tax rate | (128.30%) | 40.10% | (43.10%) | 39.20% | ||
Net deferred tax assets | $ 28.4 | $ 28.4 | $ 43.1 | |||
Net deferred tax liabilities | 94.4 | 94.4 | 146.1 | |||
Unrecognized tax benefits | $ 1.4 | 1.4 | $ 1.3 | |||
Decrease in unrecognized tax benefits | $ 0.1 | |||||
Scenario Forecast [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 21.00% |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit, reported | $ (43.9) | $ 15.3 | $ (30.3) | $ 22.6 |
Revaluation of net deferred income tax liability | 37.4 | 37.4 | ||
Stock-based compensation - performance vesting | 15.4 | 15.4 | ||
Impact of rate reduction on first quarter fiscal 2018 income | 2.5 | |||
Income tax expense, excluding benefits | $ 11.4 | $ 22.5 | ||
Income tax benefit, reported | (128.30%) | 40.10% | (43.10%) | 39.20% |
Revaluation of net deferred income tax liability | 109.60% | 53.30% | ||
Stock-based compensation - performance vesting | 45.20% | 21.90% | ||
Impact of rate reduction on first quarter fiscal 2018 income | 7.40% | |||
Income tax expense, excluding benefits | 33.90% | 32.10% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Jan. 10, 2018 | Dec. 30, 2017 | Feb. 07, 2018 |
Commitments And Contingencies [Line Items] | |||
Outstanding contracts and purchase orders for capital projects and services | $ 10,100,000 | ||
Undiscounted maximum amount for guarantees | 28,400,000 | ||
Future guarantee annual payments | $ 200,000 | ||
Minimum [Member] | |||
Commitments And Contingencies [Line Items] | |||
Operating lease agreements range | 7.00% | ||
Operating lease expiration term | 4 years | ||
Operating lease expiration dates | 2,018 | ||
Maximum [Member] | |||
Commitments And Contingencies [Line Items] | |||
Operating lease agreements range | 20.00% | ||
Operating lease expiration term | 8 years | ||
Operating lease expiration dates | 2,025 | ||
Subsequent Event [Member] | |||
Commitments And Contingencies [Line Items] | |||
Additional contracts, entered | $ 8,800,000 | ||
Subsequent Event [Member] | Wilder, et al. v. Roma Food Enterprises, Inc., et al. [Member] | |||
Commitments And Contingencies [Line Items] | |||
Litigation settlement, amount awarded to other party | $ 1,900,000 |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 30, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2018 | Jul. 01, 2017 | |
Related Party Transaction [Line Items] | |||||||
Annual payment and reimbursements to affiliates | $ 1.5 | $ 1.5 | $ 5.5 | ||||
Scenario Forecast [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Annual payment and reimbursements to affiliates | $ 1.5 | $ 3 | |||||
Purchasing Alliance [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Purchases from related party | 177.5 | $ 176.6 | 390.4 | $ 387 | |||
Equity method investments | $ 4.7 | $ 4.7 | $ 4.6 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | ||||
Potential common shares not included in computing diluted earnings per share due to antidilutive effect | 0.7 | 1.2 | 0.7 | 1 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Reconciliation of Numerators and Denominators for Basic and Diluted Earnings Per Share Computations (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Numerator: | ||||
Net income | $ 78 | $ 22.9 | $ 100.6 | $ 35.1 |
Denominator: | ||||
Weighted-average common shares outstanding | 101.4 | 100.1 | 101.2 | 100 |
Dilutive effect of share-based awards | 3.1 | 2.6 | 3.3 | 2.5 |
Weighted-average dilutive shares outstanding | 104.5 | 102.7 | 104.5 | 102.5 |
Basic earnings per share | $ 0.77 | $ 0.23 | $ 0.99 | $ 0.35 |
Diluted earnings per share | $ 0.75 | $ 0.22 | $ 0.96 | $ 0.34 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 6 Months Ended |
Dec. 30, 2017Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information, by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 4,311.1 | $ 4,051.8 | $ 8,676 | $ 8,097.9 |
EBITDA | 81.5 | 82.2 | 163.7 | 144.1 |
Depreciation and amortization | 32.3 | 30.4 | 63.7 | 59.9 |
Capital expenditures | 22 | 45.1 | 38.5 | 79.9 |
Performance Foodservice [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 2,532.8 | 2,356.8 | 5,157.3 | 4,791.5 |
EBITDA | 83 | 75.5 | 161.8 | 148.1 |
Depreciation and amortization | 14.6 | 14 | 28.4 | 27.1 |
Capital expenditures | 9.3 | 34.1 | 20.5 | 53.8 |
PFG Customized [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 888.1 | 933.4 | 1,784.1 | 1,800.1 |
EBITDA | 5.9 | 6.7 | 11.1 | 10.6 |
Depreciation and amortization | 3.7 | 3.6 | 7.3 | 8.8 |
Capital expenditures | 4.1 | 2.7 | 6.3 | 4.9 |
Vistar [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 838.3 | 737.4 | 1,634.5 | 1,478.2 |
EBITDA | 34 | 33 | 59.8 | 54.8 |
Depreciation and amortization | 6.9 | 6.6 | 13.2 | 11.8 |
Capital expenditures | 5.3 | 0.8 | 5.6 | 2.2 |
Corporate & All Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 51.9 | 24.2 | 100.1 | 28.1 |
EBITDA | (41.4) | (33) | (69) | (69.4) |
Depreciation and amortization | 7.1 | 6.2 | 14.8 | 12.2 |
Capital expenditures | 3.3 | 7.5 | 6.1 | 19 |
Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (61.9) | (55.7) | (125.1) | (113.7) |
Eliminations [Member] | Performance Foodservice [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 2.5 | 1.4 | 5.1 | 3.1 |
Eliminations [Member] | PFG Customized [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 0.1 | 0.1 | 0.2 | 0.7 |
Eliminations [Member] | Vistar [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 0.6 | 0.5 | 1.2 | 1.2 |
Eliminations [Member] | Corporate & All Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 58.7 | 53.7 | 118.6 | 108.7 |
Operating Segments [Member] | Performance Foodservice [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 2,535.3 | 2,358.2 | 5,162.4 | 4,794.6 |
Operating Segments [Member] | PFG Customized [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 888.2 | 933.5 | 1,784.3 | 1,800.8 |
Operating Segments [Member] | Vistar [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 838.9 | 737.9 | 1,635.7 | 1,479.4 |
Operating Segments [Member] | Corporate & All Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 110.6 | $ 77.9 | $ 218.7 | $ 136.8 |
Segment Information - Summary A
Segment Information - Summary Assets by Reportable Segment, Excluding Intercompany Receivables (Detail) - USD ($) $ in Millions | Dec. 30, 2017 | Jul. 01, 2017 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 3,882.6 | $ 3,804.1 |
Performance Foodservice [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,162.3 | 2,161.2 |
PFG Customized [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 645.9 | 667.1 |
Vistar [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 754 | 654.5 |
Corporate & All Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 320.4 | $ 321.3 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions | Dec. 07, 2017 | Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation expense | $ 14.5 | $ 8.1 | |||
Income tax benefit | $ 43.9 | $ (15.3) | 30.3 | $ (22.6) | |
2007 Option Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Income tax benefit | 15.4 | $ 15.4 | |||
2007 Option Plan [Member] | Tranche Two and Three [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock vested | 2.1 | ||||
Options vested | 1.4 | ||||
Accelerated compensation expense | 6.3 | ||||
Stock compensation expense | $ 24.9 |