12500 West Creek Parkway
Richmond, VA 23238
Phone (804) 484-7700
FAX (804) 484-7701
[LOGO] NEWS RELEASE
FOR MORE INFORMATION, CONTACT: JOHN D. AUSTIN
VICE PRESIDENT, FINANCE
(804) 484-7753
PERFORMANCE FOOD GROUP REPORTS 53% INCREASE
IN FIRST QUARTER NET EARNINGS AND 27% INCREASE IN SALES
- - NET EARNINGS ROSE 53% TO $16.4 MILLION IN FIRST QUARTER.
- - FIRST QUARTER NET SALES INCREASED 27% TO NEW HIGH OF $1.3 BILLION.
- - EPS ROSE 46% IN FIRST QUARTER TO $0.35 PER SHARE (DILUTED).
RICHMOND, VA. (APRIL 29, 2003) - Performance Food Group (Nasdaq/NM:PFGC) today
announced increased net sales and net earnings for the first quarter ended March
29, 2003.
Sales for the first quarter of 2003 amounted to $1.3 billion, up 27%
from $996.9 million in the year-earlier period. Net earnings for the quarter
increased 53% to $16.4 million compared with $10.8 million a year ago. Net
earnings per share for the quarter increased 46% to $0.35 per share diluted on
16% more shares outstanding compared with net earnings of $0.24 per share
diluted in the year-earlier quarter.
C. Michael Gray, president and chief executive officer, commented, "The
first quarter results represented the 33rd consecutive period in which net sales
and net earnings have increased compared with the prior-year period. Our first
quarter sales growth of 27% consisted of 11% internal growth and 16% from
acquisitions. All of our business segments contributed to our internal growth
despite the impact of harsh winter weather, increased fuel costs and the war in
Iraq. Our growth strategy of capitalizing on strategic acquisitions, deepening
the penetration within existing accounts, winning new customers and focusing on
product and service innovation should continue to serve us well as we move
through the rest of what appears to be an exciting 2003. Deflation amounted to
just over 1% during the first quarter primarily as a result of the unusually
high price of iceberg lettuce in the prior year quarter.
"Broadline sales continued to grow, increasing 43% in this year's first
quarter versus the like quarter a year ago aided by the acquisitions of Quality
Foods, Middendorf Meats and TPC completed during 2002. Street sales per delivery
were down slightly for the quarter primarily due to the impact of additional new
salespeople, new accounts and bad weather. Sales of proprietary brands increased
34% and comprised 23% of street sales for the quarter. Inflation amounted to
less than 1% in the Broadline segment."
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Performance Food Group Reports First Quarter Earnings
Page 2
April 29, 2003
Gray added, "Customized recorded a 21% increase in first quarter net
sales driven by expanding relationships with Ruby Tuesday, Inc. and T.G.I.
Friday's restaurants as well as the addition of Mimi's Cafe. Deflation for the
Customized segment amounted to approximately 1% for the quarter.
"Fresh-cut sales grew at a more modest 5% which was negatively impacted
by approximately 5% of deflation versus the prior year period. We're seeing
strong demand for our fresh-cut products as we continue to develop innovative
new bagged salad mixes and other fresh-cut products that meet our customers'
needs. Our "Real! Fresh! Fruit!" product testing continues on schedule on the
West Coast and is now in approximately 1,000 stores. We believe new product
innovation, including Real! Fresh! Fruit!, will be a driver for future growth."
Gray concluded, "We are optimistic about our overall growth prospects
and expect that continued execution of our growth strategies will yield further
improvement in operating margins. We are pleased with our operating results for
the first quarter despite challenges related to harsh winter weather, increased
fuel costs and the war in Iraq. Our balance sheet remains strong with a
debt-to-capital ratio of 33%. Including amounts outstanding under our
receivables purchase facility of $78 million and master operating lease
obligations of $56 million, our debt-to-capital ratio is 40%. This capital
structure allows us to continue investing in our business and to take advantage
of growth opportunities. In addition, we recently increased our revolving credit
facility to $350 million which further enhances our financial flexibility."
Performance Food Group markets and distributes more than 61,000
national and private label food and food-related products to approximately
46,000 restaurants, hotels, cafeterias, schools, healthcare facilities and other
institutions. Our Fresh Express line is the industry leader and pioneer of fresh
packaged salads.
The live broadcast of Performance Food Group's quarterly conference
call will be available at www.pfgc.com or
http://www.vcall.com/CEPage.asp?ID=83721 on April 29, 2003, beginning at 10:00
am (Eastern Time). Any information disclosed on the quarterly conference call
that has not been previously disclosed publicly will be available on Performance
Food Group's website at www.pfgc.com.
Certain statements made herein are forward-looking statements under the
Private Securities Litigation Reform Act of 1995. These statements involve risks
and uncertainties and are based on current expectations and management's
estimates; actual results may differ materially. The risks and uncertainties
which could impact these statements include, but are not limited to, general
economic conditions; the relatively low margins and economic sensitivity of the
foodservice business; the Company's reliance on major customers; the ability to
identify and successfully complete acquisitions of other foodservice
distributors; the Company's ability to successfully develop and market new
products; management of the Company's planned growth; and the effect of the
Company's identification of certain accounting errors on its anticipated results
of operations, all as detailed from time to time in the reports filed by the
Company with the Securities and Exchange Commission.
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Performance Food Group Reports First Quarter Earnings
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April 29, 2003
PERFORMANCE FOOD GROUP COMPANY
UNAUDITED FINANCIAL HIGHLIGHTS
THREE MONTHS ENDED
------------------------------------
MARCH 29, MARCH 30,
2003 2002
-------------- ------------
Net sales $1,269,105,000 $996,903,000
Net earnings $ 16,420,000 $ 10,756,000
Net earnings per share:
Basic $ 0.36 $ 0.25
Diluted $ 0.35 $ 0.24
Weighted average number of common shares outstanding:
Basic 45,345,000 43,847,000
Diluted 52,452,000 45,411,000
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Performance Food Group Reports First Quarter Earnings
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April 29, 2003
PERFORMANCE FOOD GROUP COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET AND INCOME STATEMENT
MARCH 29, 2003
(IN THOUSANDS, EXCEPT NET EARNINGS PER COMMON SHARE)
MARCH 29, 2003 DEC. 29, 2002
-------------- -------------
ASSETS
Cash and cash equivalents $ 39,190 $ 33,660
Accounts and notes receivable, net, including
retained interest in securitized receivables 228,461 220,676
Inventories 241,568 239,846
Other current assets 34,386 34,964
- -------------------------------------------------------------------------------------------------
Total current assets 543,605 529,146
- -------------------------------------------------------------------------------------------------
Property, plant and equipment, net 303,978 293,994
Goodwill, net 585,474 575,464
Other intangible assets, net 203,347 205,497
Other assets 9,637 13,616
- -------------------------------------------------------------------------------------------------
Total assets $ 1,646,041 $ 1,617,717
=================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Checks in excess of deposits $ 57,078 $ 74,759
Trade accounts payable 264,595 236,438
Current installments of long-term debt 2,129 2,504
Other current liabilities 147,380 134,363
- -------------------------------------------------------------------------------------------------
Total current liabilities 471,182 448,064
- -------------------------------------------------------------------------------------------------
Long-term debt, excluding current installments 351,763 370,095
Deferred income taxes 87,644 84,689
Shareholders' equity 735,452 714,869
- -------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 1,646,041 $ 1,617,717
=================================================================================================
THREE MONTHS ENDED
MARCH 29, 2003 MARCH 30, 2002
Net sales $ 1,269,105 100.0% $ 996,903 100.0%
Cost of goods sold 1,069,767 84.3% 843,578 84.6%
- ----------------------------------------------------------------------------------------------------------------------
Gross profit 199,338 15.7% 153,325 15.4%
Operating expenses 168,934 13.3% 131,909 13.3%
- ----------------------------------------------------------------------------------------------------------------------
Operating profit 30,404 2.4% 21,416 2.1%
Other income (expense):
Interest expense (4,790) (4,299)
Loss on sale of receivables (324) (438)
Other, net 1,193 531
- ----------------------------------------------------------------------------------------------------------------------
Other expense, net (3,921) (0.3)% (4,206) (0.4)%
- ----------------------------------------------------------------------------------------------------------------------
Earnings before income taxes 26,483 2.1% 17,210 1.7%
Income taxes 10,063 0.8% 6,454 0.6%
- ----------------------------------------------------------------------------------------------------------------------
Net earnings $ 16,420 1.3% $ 10,756 1.1%
======================================================================================================================
Weighted average common shares outstanding 45,345 43,847
======================================================================================================================
Basic net earnings per common share $ 0.36 $ 0.25
======================================================================================================================
Weighted average common shares and
dilutive potential common shares outstanding 52,452 45,411
======================================================================================================================
Diluted net earnings per common share $ 0.35 $ 0.24
======================================================================================================================
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Performance Food Group Reports First Quarter Earnings
Page 5
April 29, 2003
PERFORMANCE FOOD GROUP COMPANY
2003 COMPARED TO 2002
1ST QUARTER
SEGMENT DISCLOSURE
Corporate &
2003 Broadline Customized Fresh-Cut Intersegment Consolidated
- ---- --------- ---------- --------- ------------ ------------
First Quarter
Net external sales $642,683 $412,942 $213,480 $ -- $1,269,105
Intersegment sales 213 94 3,798 (4,105) --
Operating profit 11,962 4,875 18,226 (4,659) 30,404
Operating profit margin 1.86% 1.18% 8.39% -- 2.40%
Total assets 777,532 145,338 635,930 87,241 1,646,041
Interest expense (income) 3,821 65 4,682 (3,778) 4,790
Loss (gain) on sale
of receivables 1,629 502 -- (1,807) 324
Depreciation 3,574 850 5,363 368 10,155
Amortization 943 -- 1,135 -- 2,078
Capital expenditures 1,627 2,662 14,874 1,045 20,208
Corporate &
2002 Broadline Customized Fresh-Cut Intersegment Consolidated
- ---- --------- ---------- --------- ------------ ------------
First Quarter
Net external sales $450,810 $341,117 $204,976 $ -- $ 996,903
Intersegment sales 144 -- 2,784 (2,928) --
Operating profit 8,406 3,446 12,838 (3,274) 21,416
Operating profit margin 1.86% 1.01% 6.18% -- 2.15%
Total assets 469,505 95,737 623,587 148,545 1,337,374
Interest expense (income) 1,464 129 5,065 (2,359) 4,299
Loss (gain) on sale
of receivables 1,482 470 -- (1,514) 438
Depreciation 2,775 752 4,525 258 8,310
Amortization 354 -- 1,128 300 1,782
Capital expenditures 1,133 1,213 8,380 931 11,657
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