EXHIBIT 99.1
12500 West Creek Parkway
Richmond, VA 23238
Phone (804) 484-7700
[PERFORMANCE FOOD GROUP LOGO] FAX (804) 484-7701
NEWS RELEASE
FOR MORE INFORMATION:
INVESTOR CONTACT:
MEDIA CONTACT: KEVIN COLLIER
CHERYL MOORE DIRECTOR, INVESTOR RELATIONS
DIRECTOR, CORPORATE COMMUNICATIONS (804) 287-8109
(804) 484-6273
PERFORMANCE FOOD GROUP REPORTS 2004 NET SALES OF $6.1
BILLION, A 13.5% INCREASE ADJUSTED FOR 53RD WEEK
- FOURTH QUARTER NET SALES INCREASED TO $1.6 BILLION, A 13% INCREASE
ADJUSTED FOR THE COMPANY'S 53RD WEEK IN FISCAL 2003
- FOURTH QUARTER EPS INCREASED 19% TO $0.31 PER SHARE DILUTED,
EXCLUDING A ONE-TIME QUARTERLY CHARGE FOR THE REDEMPTION OF THE
COMPANY'S OUTSTANDING CONVERTIBLE NOTES
RICHMOND, VA. (MARCH 16, 2005) - Performance Food Group (Nasdaq/NM:PFGC) today
announced results for the fourth quarter and year ended 2004.
Net sales for the fourth quarter of 2004 amounted to $1.6 billion, a 6% increase
from the year earlier period. Adjusted for the Company's 53rd week in fiscal
2003, which contributed approximately $101 million to sales in the year earlier
period, results for the quarter reflect a 13% increase over the prior year
period. Inflation for the fourth quarter 2004 was approximately 4%. All of the
Company's sales increase represented internal growth. Net earnings for the
quarter amounted to $8.5 million, a decline of 30% compared to the prior year
period. Net earnings for the quarter reflect the impact of the Company's
previously disclosed one-time charge of approximately $10.1 million, or $6.4
million after tax, for the redemption of the Company's outstanding convertible
notes. Net earnings for the quarter excluding the one-time charge were
approximately $14.9 million, an increase of 22% over the $12.2 million in the
same period in the previous year. Quarterly net earnings per share amounted to
approximately $0.18 per share diluted. Net earnings per share for the quarter
excluding the impact of the one-time charge were approximately $0.31 per share
diluted, an increase of 19% versus the year earlier period.
Net sales for the full year of 2004 amounted to $6.1 billion, an increase of 11%
from the prior year period. Adjusted for the Company's 53rd week in fiscal 2003,
net sales for the year increased 13.5% over the same period in the previous
year. Internal growth represented all of the Company's sales increase for the
year. Inflation for 2004 amounted to approximately 5%. Net earnings for the year
declined approximately 29% to $52.6 million. Net earnings for the year excluding
the impact of the one-time charge amounted to $58.8 million, a decline of 21%
versus the $74.2 million in 2003. Net earnings per share diluted declined
approximately 28% to $1.11 per share diluted. Net earnings per
Performance Food Group Reports Fourth Quarter Earnings
Page 2
March 16, 2005
share diluted excluding the impact of the one-time charge amounted to $1.25 per
share diluted, a decline of approximately 19% versus $1.54 in the prior year
period.
Bob Sledd, Chairman and Chief Executive Officer remarked, "We're especially
pleased with the efforts of our associates in driving strong internal sales
growth in the fourth quarter. The results reflect that our focus on serving our
customers is yielding a steady improvement in our business each quarter. We are
very pleased that in the fourth quarter, we realized significant operating
earnings growth over the prior year period.
Sales in the Broadline distribution segment increased approximately 7% in the
fourth quarter and 11% for the full year over the same prior year periods.
Adjusted for the 53rd week in 2003, which contributed approximately $48 million
to sales in the previous year period, Broadline sales increased approximately
15% in the quarter and 13% for the full year. Inflation amounted to
approximately 3% in the quarter and 5% for the year. Sales gains in the quarter
were the result of previously disclosed new business rollouts, combined with
incremental growth through existing customers. The impact of new business
rollouts in the quarter contributed to a faster rate of growth in chain business
versus street business. For the full year, street sales increased 11% over the
prior year, adjusted for the 53rd week in 2003."
Mr. Sledd added, "In our Customized distribution segment, sales increased
approximately 7% in the fourth quarter and 14% for the full year compared to the
same periods in the prior year. Adjusted for the 53rd week in 2003, which
contributed approximately $38 million to sales in the prior year period,
Customized sales grew approximately 16% in the quarter and 17% for the year.
Inflation was approximately 6% in both the quarter and the full year. Sales
gains in the fourth quarter were driven by continued growth with existing
customers. A major focus in the Customized segment during 2005 will be the
addition of new capacity throughout the year to position us for growth with new
customers in 2006."
"Our Fresh-cut segment experienced solid fourth quarter sales gains at retail,
while overall sales declined approximately 3% in the fourth quarter and
increased approximately 6% for the full year compared to the same periods in the
prior year, due primarily to our previously disclosed transition away from
certain foodservice customers during the past year. Adjusted for the 53rd week
in 2003, which contributed approximately $16 million in sales in the prior year
period, Fresh-cut sales increased approximately 4% in the quarter and 8% for the
year. Inflation was approximately 2% in the quarter and 1% for the year. Our
Fresh Express(R) packaged salads continue to gain market share while achieving
growth in excess of the retail category growth rate, which remained stable
during the quarter. On February 23, 2005, we announced the signing of a
definitive agreement for the sale of the Fresh-cut segment to Chiquita Brands
International, Inc. for $855 million. We expect the closing of the transaction
to be completed during the second quarter of this year. The sale of Fresh-cut
provides us the opportunity to focus exclusively on our core Broadline and
Customized distribution businesses."
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Performance Food Group Reports Fourth Quarter Earnings
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March 16, 2005
Mr. Sledd concluded, "Our balance sheet remains strong with a debt to capital
ratio of approximately 24% at the end of the fourth quarter, excluding $130
million of interests in accounts receivable sold under an accounts receivable
purchase facility. We believe that we have turned the corner in our operating
performance and we expect to achieve solid operating earnings improvement in our
distribution businesses throughout the year in 2005."
Performance Food Group markets and distributes more than 65,000 national and
private label food and food-related products to approximately 44,000
restaurants, hotels, cafeterias, schools, healthcare facilities and other
institutions. The Fresh Express(R) line is the industry leader and pioneer of
fresh packaged salads. For more information on Performance Food Group, visit
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 level of
demand for the company's fresh-cut products; the possibility that the closing of
the sale of the fresh-cut produce operations may not occur because of the
failure of the closing conditions to be satisfied; the risk that the results of
the Securities and Exchange Commission informal inquiry could have an adverse
affect on the Company; the ability to identify and successfully complete
acquisitions of other foodservice distributors; the Company's ability to
successfully develop, produce and market new products and management of the
Company's planned growth, including the Company's ability to successfully manage
the transition of its sales mix and related production costs, 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 Fourth Quarter Earnings
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March 16, 2005
PERFORMANCE FOOD GROUP COMPANY
UNAUDITED FINANCIAL HIGHLIGHTS
THREE MONTHS ENDED
---------------------------------
JAN. 1, JAN. 3,
2005 2004
-------------- --------------
Net sales $1,580,351,000 $1,495,489,000
Net earnings $ 8,523,000 $ 12,223,000
Net earnings per share:
Basic $ 0.18 $ 0.27
Diluted $ 0.18 $ 0.26
Weighted average number of shares outstanding:
Basic 46,748,000 45,841,000
Diluted 47,301,000 47,181,000
TWELVE MONTHS ENDED
---------------------------------
JAN. 1, JAN. 3,
2005 2004
-------------- --------------
Net sales $6,148,923,000 $5,519,811,000
Net earnings $ 52,558,000 $ 74,191,000
Net earnings per share:
Basic $ 1.13 $ 1.63
Diluted $ 1.11 $ 1.54
Weighted average number of shares outstanding:
Basic 46,398,000 45,583,000
Diluted 47,181,000 53,002,000
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Performance Food Group Reports Fourth Quarter Earnings
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March 16, 2005
PERFORMANCE FOOD GROUP COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET AND INCOME STATEMENT (UNAUDITED)
JANUARY 1, 2005
(IN THOUSANDS, EXCEPT NET EARNINGS PER COMMON SHARE)
ASSETS JAN. 1, 2005 JAN. 3, 2004
- ------------------------------------------------- ------------ ------------
Cash and cash equivalents $ 52,322 $ 38,916
Accounts and notes receivable, net, including
retained interest in securitized receivables 245,755 242,340
Inventories 314,835 257,198
Other current assets 33,007 43,421
---------- ----------
Total current assets 645,919 581,875
---------- ----------
Property, plant and equipment, net 394,701 363,052
Goodwill, net 586,510 582,966
Other intangible assets, net 184,871 196,814
Other assets 15,764 11,761
---------- ----------
Total assets $1,827,765 $1,736,468
========== ==========
Checks in excess of deposits $ 128,079 $ 81,797
Trade accounts payable 267,657 235,392
Current installments of long-term debt 936 1,358
Other current liabilities 164,423 150,377
---------- ----------
Total current liabilities 561,095 468,924
---------- ----------
Long-term debt, excluding current installments 278,584 353,919
Deferred income taxes 113,773 109,810
Shareholders' equity 874,313 803,815
---------- ----------
Total liabilities and shareholders' equity $1,827,765 $1,736,468
========== ==========
THREE MONTHS ENDED TWELVE MONTHS ENDED
JAN. 1, 2005 JAN. 3, 2004 JAN. 1, 2005 JAN. 3, 2004
------------------ ------------------- ------------------- --------------------
Net sales $1,580,351 100.0% $ 1,495,489 100.0% $ 6,148,923 100.0% $ 5,519,811 100.0%
Cost of goods sold 1,345,811 85.2% 1,270,679 85.0% 5,229,059 85.0% 4,665,275 84.5%
---------- ----- ----------- ----- ----------- ----- ----------- -----
Gross profit 234,540 14.8% 224,810 15.0% 919,864 15.0% 854,536 15.5%
Operating expenses 207,408 13.1% 200,056 13.3% 806,918 13.2% 715,806 13.0%
---------- ----- ----------- ----- ----------- ----- ----------- -----
Operating profit 27,132 1.7% 24,754 1.7% 112,946 1.8% 138,730 2.5%
Other income (expense):
Interest expense (2,562) (4,664) (16,829) (19,123)
Loss on sale of receivables (864) (585) (2,421) (1,765)
Loss on redemption of Convertible Notes (10,127) - (10,127) -
Other, net (42) 209 1,107 1,821
---------- ----- ----------- ----- ----------- ----- ----------- -----
Other expense, net (13,595) -0.9% (5,040) -0.4% (28,270) -0.4% (19,067) -0.3%
---------- ----- ----------- ----- ----------- ----- ----------- -----
Earnings before income taxes 13,537 0.8% 19,714 1.3% 84,676 1.4% 119,663 2.2%
Income taxes 5,014 0.3% 7,491 0.5% 32,118 0.5% 45,472 0.9%
---------- ----- ----------- ----- ----------- ----- ----------- -----
Net earnings $ 8,523 0.5% $ 12,223 0.8% $ 52,558 0.9% $ 74,191 1.3%
========== ===== =========== ===== =========== ===== =========== =====
Weighted average common
shares outstanding 46,748 45,841 46,398 45,583
========== =========== =========== ===========
Basic net earnings per common share $ 0.18 $ 0.27 $ 1.13 $ 1.63
========== =========== =========== ===========
Weighted average common shares and
dilutive potential common shares outstanding 47,301 47,181 47,181 53,002
========== =========== =========== ===========
Diluted net earnings per common share $ 0.18 $ 0.26 $ 1.11 $ 1.54
========== =========== =========== ===========
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Performance Food Group Reports Fourth Quarter Earnings
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March 16, 2005
PERFORMANCE FOOD GROUP COMPANY
2004 COMPARED TO 2003
4TH QUARTER
SEGMENT DISCLOSURE
CORPORATE &
2004 BROADLINE CUSTOMIZED FRESH-CUT INTERSEGMENT CONSOLIDATED
- ---------------------------------- ---------- ---------- ----------- ------------ ------------
FOURTH QUARTER
Net external sales $ 824,754 $ 524,098 $ 231,499 $ - $ 1,580,351
Intersegment sales 199 72 2,574 (2,845) -
Total sales 824,953 524,170 234,073 (2,845) 1,580,351
Operating profit 18,879 6,053 8,817 (6,617) 27,132
Operating profit margin 2.29% 1.15% 3.77% - 1.72%
Total assets 830,421 176,827 667,556 152,961 1,827,765
Interest expense (income) 3,551 218 5,453 (6,660) 2,562
Loss (gain) on sale of receivables 1,966 623 - (1,725) 864
Depreciation 3,578 1,139 8,001 1,029 13,747
Amortization 910 - 1,107 - 2,017
Capital expenditures 9,098 8,938 6,094 751 24,881
CORPORATE &
2003 BROADLINE CUSTOMIZED FRESH-CUT INTERSEGMENT CONSOLIDATED
- ---------------------------------- ---------- ---------- ----------- ------------ ------------
FOURTH QUARTER
Net external sales $ 767,130 $ 491,599 $ 236,760 $ - $ 1,495,489
Intersegment sales 355 73 3,943 (4,371) -
Total sales 767,485 491,672 240,703 (4,371) 1,495,489
Operating profit 17,574 3,194 8,635 (4,649) 24,754
Operating profit margin 2.29% 0.65% 3.59% - 1.66%
Total assets 795,566 147,233 667,698 125,971 1,736,468
Interest expense (income) 3,148 85 4,892 (3,461) 4,664
Loss (gain) on sale of receivables 1,624 563 - (1,602) 585
Depreciation 3,558 1,033 6,322 643 11,556
Amortization 977 - 1,131 - 2,108
Capital expenditures 21,219 2,394 18,906 791 43,310
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PERFORMANCE FOOD GROUP COMPANY
2004 COMPARED TO 2003
YEAR-TO-DATE
SEGMENT DISCLOSURE
CORPORATE &
2004 BROADLINE CUSTOMIZED FRESH-CUT INTERSEGMENT CONSOLIDATED
- ---------------------------------- ---------- ---------- ----------- ------------ ------------
YEAR-TO-DATE
Net external sales $3,120,500 $2,052,578 $ 975,845 $ - $ 6,148,923
Intersegment sales 806 302 13,197 (14,305) -
Total sales 3,121,306 2,052,880 989,042 (14,305) 6,148,923
Operating profit 70,196 21,538 49,266 (28,054) 112,946
Operating profit margin 2.25% 1.05% 4.98% - 1.84%
Total assets 830,421 176,827 667,556 152,961 1,827,765
Interest expense (income) 12,366 747 19,741 (16,025) 16,829
Loss (gain) on sale of receivables 7,845 2,596 - (8,020) 2,421
Depreciation 13,457 4,355 29,212 3,558 50,582
Amortization 3,626 - 4,491 - 8,117
Capital expenditures 15,089 20,770 42,836 4,776 83,471
CORPORATE &
2003 BROADLINE CUSTOMIZED FRESH-CUT INTERSEGMENT CONSOLIDATED
- ---------------------------------- ----------- ---------- ----------- ------------ ------------
YEAR-TO-DATE
Net external sales $2,804,921 $1,797,871 $ 917,019 $ - $ 5,519,811
Intersegment sales 1,056 348 16,352 (17,756) -
Total sales 2,805,977 1,798,219 933,371 (17,756) 5,519,811
Operating profit 69,664 19,704 66,405 (17,043) 138,730
Operating profit margin 2.48% 1.10% 7.11% - 2.51%
Total assets 795,566 147,233 667,698 125,971 1,736,468
Interest expense (income) 13,599 325 19,057 (13,858) 19,123
Loss (gain) on sale of receivables 5,674 2,182 - (6,091) 1,765
Depreciation 14,038 3,741 22,998 2,134 42,911
Amortization 3,793 - 4,525 - 8,318
Capital expenditures 32,250 21,577 55,846 3,146 112,819
Performance Food Group Reports Fourth Quarter Earnings
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March 16, 2005
IMPACT OF 53RD WEEK SALES RECONCILIATION BY SEGMENT
(amounts in thousands)
2004 Q4
2004 SALES 2003 SALES % INCREASE/
Q4 Q4 (DECREASE)
------------- ------------ -----------
BROADLINE
Net Sales as reported (including 2003 53rd week) $ 824,953 $ 767,485 7%
Less: 53rd week sales in 2003 - (47,682) -
----------- ----------- ---
Adjusted Net Sales without 53rd week in 2003 824,953 719,803 15%
CUSTOMIZED
Net Sales as reported (including 2003 53rd week) 524,170 491,672 7%
Less: 53rd week sales in 2003 - (38,100) -
----------- ----------- ---
Adjusted Net Sales without 53rd week in 2003 524,170 453,572 16%
FRESH-CUT
Net Sales as reported (including 2003 53rd week) 234,073 240,703 -3%
Less: 53rd week sales in 2003 - (15,669) -
----------- ----------- ---
Adjusted Net Sales without 53rd week in 2003 234,073 225,034 4%
CONSOLIDATED
Net Sales as reported (including 2003 53rd week) 1,580,351 1,495,489 6%
Less: 53rd week sales in 2003 - (101,149) -
----------- ----------- ---
Adjusted Net Sales without 53rd week in 2003 $ 1,580,351 $ 1,394,340 13%
2004 FULL YEAR
2004 SALES 2003 SALES % INCREASE/
FULL YEAR FULL YEAR (DECREASE)
----------- ------------ -----------
BROADLINE
Net Sales as reported (including 2003 53rd week) $ 3,121,306 $ 2,805,977 11%
Less: 53rd week sales in 2003 - (47,682) -
----------- ----------- ----
Adjusted Net Sales without 53rd week in 2003 3,121,306 2,758,295 13%
CUSTOMIZED
Net Sales as reported (including 2003 53rd week) 2,052,880 1,798,219 14%
Less: 53rd week sales in 2003 - (38,100) -
----------- ----------- ----
Adjusted Net Sales without 53rd week in 2003 2,052,880 1,760,119 17%
FRESH-CUT
Net Sales as reported (including 2003 53rd week) 989,042 933,371 6%
Less: 53rd week sales in 2003 - (15,669) -
----------- ----------- ----
Adjusted Net Sales without 53rd week in 2003 989,042 917,702 8%
CONSOLIDATED
Net Sales as reported (including 2003 53rd week) 6,148,923 5,519,811 11%
Less: 53rd week sales in 2003 - (101,149) -
----------- ----------- ----
Adjusted Net Sales without 53rd week in 2003 $ 6,148,923 $ 5,418,662 13.5%
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Performance Food Group Reports Fourth Quarter Earnings
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March 16, 2005
EPS RECONCILIATION FOR IMPACT OF CONVERTIBLE NOTES REDEMPTION
(amounts in thousands, except per share data)
4TH QUARTER 2004
NET EARNINGS SHARES EPS
------------ ------ -----
Diluted EPS, as reported $ 8,523 47,301 $0.18
Add: After-tax impact of Convertible Notes redemption
(utilizing Q4 effective tax rate of 37.04%) 6,375 -
------- ------ -----
Adjusted Diluted EPS, without redemption of notes $14,898 47,301 $0.31
Note: Interest on convertible notes was antidilutive for Q4 2004, therefore no
presentation of assumed conversion is necessary.
FULL YEAR 2004
NET EARNINGS SHARES EPS
------------ ------ -----
Diluted EPS, as reported $52,558 47,181 $1.11
Add: After-tax impact of Convertible Notes redemption
(utilizing full year effective tax rate of 37.93%) 6,285 -
------- ------ -----
Adjusted Diluted EPS, without redemption of notes 58,843 47,181 1.25
Interest on Convertible Notes, net of tax 5,943 4,850
------- ------ -----
Adjusted Diluted EPS after assumed conversion of notes $64,786 52,031 $1.25
-END-