EXHIBIT 99.1
[PERFORMANCE FOOD GROUP LOGO]
12500 West Creek Parkway
Richmond, VA 23238
Phone (804) 484-7700
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 21.7% INCREASE IN
NET EARNINGS PER SHARE FROM CONTINUING OPERATIONS
o NET SALES FROM CONTINUING OPERATIONS INCREASED 7.3%
o NET EARNINGS FROM CONTINUING OPERATIONS INCREASED 9.8%
RICHMOND, VA. (NOVEMBER 1, 2005) - Performance Food Group (Nasdaq/NM:PFGC)
today announced results for the third quarter and nine months ended October
1, 2005. On June 28, 2005, the Company completed the sale of its fresh-cut
segment to Chiquita Brands International, Inc. All amounts pertaining to
the Company's fresh-cut segment are accounted for as discontinued
operations.
Consolidated net sales from continuing operations in the third quarter
increased to approximately $1.4 billion, a 7.3% increase compared to the
prior year period. Inflation was nominal in the third quarter. Net earnings
from continuing operations amounted to approximately $11.9 million compared
to approximately $10.8 million in the year earlier period. Net earnings per
share from continuing operations were $0.28 per share diluted, compared to
$0.23 per share diluted in the prior year period. The Company's pre-tax
results were reduced by approximately $2.4 million, or $0.03 per share
diluted, as a result of Hurricane Katrina during the quarter. Net loss per
share from discontinued operations was $0.01 per share diluted as a result
of changes in the effective tax rate, estimated deferred taxes and the
related gain associated with the sale of Fresh Express.
Consolidated net sales from continuing operations for the first nine months
of 2005 were approximately $4.3 billion, up 12.0% from approximately $3.8
billion in the year earlier period. Net earnings from continuing operations
in the same period increased 27.1% to approximately $28.8 million, compared
to approximately $22.7 million in the prior year period. Net earnings per
share from continuing operations increased to $0.63 per share diluted,
compared to $0.49 per share diluted in the same period last year.
Bob Sledd, Chairman and Chief Executive Officer noted, "We achieved solid
internal sales and net earnings growth during the third quarter, despite
the impact of Hurricane Katrina. Our associates demonstrated a tremendous
level of dedication to our customers and to on-going rebuilding efforts in
the community. Sales in the broadline distribution segment increased
approximately 7.5% in the third quarter compared to the prior year period.
Inflation amounted to approximately 1% in the quarter. Our previously
disclosed
MORE
third quarter rollout of new multi-unit business in the segment was delayed
somewhat as a result of Hurricane Katrina, but is expected to be completed
during the fourth quarter. Also during the fourth quarter, we expect to
begin exiting approximately $115 million of annualized multi-unit sales in
the broadline segment. The vast majority of this business is a result of
our Company's initiative to rationalize business that does not meet our
profit objectives. We remain optimistic about driving future sales growth
and profitability in our broadline segment as we execute our initiatives."
"Sales in our customized distribution segment increased approximately 7.0%
in the third quarter compared to the prior year period. Sales included
deflation of approximately 1% in the quarter. Sales increases were driven
by growth with existing customers. As we anticipated, start up costs
associated with the opening of new distribution facilities impacted our
operating margins slightly in the quarter. Start up costs related to the
opening of our new California facility, as well as the transfer of business
between our facilities to gain efficiencies, are expected to impact
customized operating margins in the fourth quarter. These initiatives will
help set the stage for continued growth in the future."
"We expect to finish the year on a strong note with solid results in the
fourth quarter. We anticipate the residual impact of Hurricanes Katrina and
Wilma to continue to affect the fourth quarter earnings somewhat. Based on
current trends in our business, our expectations for operating profit from
continuing operations, net of the impact of the recent hurricanes, are in
the range of $69.5 to $71.0 million, a solid gain over the prior year. This
also includes corporate overhead and stock compensation expense of
approximately $1.0 to $1.5 million related to restricted stock grants for
the 2005 year."
Mr. Sledd concluded "Our balance sheet remains strong with cash and cash
equivalents of approximately $149.5 million. During the third quarter, we
completed a tender offer to repurchase approximately 10.1 million shares of
our common stock and also announced a stock repurchase program for up to
$100 million of our common stock. Our debt to capital ratio is less than 1%
at the end of the third quarter, excluding $130 million of interests in
accounts receivable sold under our accounts receivable purchase facility.
For the remainder of the year, we will continue to focus on our core
strategies to drive continued sales and earnings growth and remain
optimistic about the balance of 2005 and our prospects for the future."
Performance Food Group markets and distributes more than 64,000 national
and private label food and food-related products to approximately 44,000
restaurants, hotels, cafeterias, schools, healthcare facilities and other
institutions. 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 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, all as detailed from time to time in the reports filed by the
Company with the Securities and Exchange Commission.
MORE
PERFORMANCE FOOD GROUP COMPANY
UNAUDITED FINANCIAL HIGHLIGHTS
(In thousands, except net earnings per common share) THREE MONTHS ENDED
-------------------------------------------
OCTOBER 1, OCTOBER 2,
2005 2004
---------------- ------------------
Net sales from continuing operations $ 1,401,780 $ 1,306,826
Earnings from continuing operations, net of tax $ 11,911 $ 10,847
Earnings from discontinued operations, net of tax (464) 6,916
---------------- ------------------
$ 11,447 $ 17,763
Weighted average number of shares outstanding:
Basic 42,316 46,523
Diluted 42,906 53,270
Earnings per common share:
Basic earnings per common share - continuing operations $ 0.28 $ 0.23
Basic earnings per common share - discontinued operations (0.01) 0.15
---------------- ------------------
$ 0.27 $ 0.38
Diluted earnings per common share - continuing operations $ 0.28 $ 0.23
Diluted earnings per common share - discontinued operations (0.01) 0.14
---------------- ------------------
$ 0.27 $ 0.37
</Table>
Note: Prior year data has been reclassified to conform to current year
discontinued operations presentation.
MORE
PERFORMANCE FOOD GROUP COMPANY
UNAUDITED FINANCIAL HIGHLIGHTS
(In thousands, except net earnings per common share) NINE MONTHS ENDED
-------------------------------------------
OCTOBER 1, OCTOBER 2,
2005 2004
---------------- ------------------
Net sales from continuing operations $ 4,281,322 $ 3,824,226
Earnings from continuing operations, net of tax $ 28,840 $ 22,697
Earnings from discontinued operations, net of tax 200,097 21,338
---------------- ------------------
$ 228,937 $ 44,035
Weighted average number of shares outstanding:
Basic 45,381 46,282
Diluted 45,972 53,249
Earnings per common share:
Basic earnings per common share - continuing operations $ 0.64 $ 0.49
Basic earnings per common share - discontinued operations 4.41 0.46
---------------- ------------------
$ 5.05 $ 0.95
Diluted earnings per common share - continuing operations $ 0.63 $ 0.49
Diluted earnings per common share - discontinued operations 4.35 0.44
---------------- ------------------
$ 4.98 $ 0.93
</Table>
Note: Prior year data has been reclassified to conform to current year
discontinued operations presentation.
MORE
PERFORMANCE FOOD GROUP COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS AND INCOME STATEMENTS (UNAUDITED)
OCTOBER 1, 2005
(IN THOUSANDS, EXCEPT NET EARNINGS PER COMMON SHARE)
(A)
ASSETS OCTOBER 1, 2005 JANUARY 1, 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents $ 149,491 $ 52,322
Accounts and notes receivable, net, including
retained interest in securitized receivables 198,092 171,191
Inventories 291,342 287,019
Other current assets 24,144 25,463
Current assets from discontinued operations 10,374 109,924
- ------------------------------------------------------------------------------------------------------------------------------------
Total current assets 673,443 645,919
- ------------------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, net 240,867 201,248
Goodwill, net 355,836 354,038
Other intangible assets, net 51,333 54,471
Other assets 16,090 13,502
Non-current assets from discontinued operations - 558,587
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $ 1,337,569 $ 1,827,765
====================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Checks in excess of deposits $ 82,065 $ 103,948
Trade accounts payable 246,666 227,882
Current installments of long-term debt 583 661
Other current liabilities 125,519 112,580
Income taxes payable 16,318 -
Current liabilities from discontinued operations 6,775 116,024
- ------------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 477,926 561,095
- ------------------------------------------------------------------------------------------------------------------------------------
Long-term debt, excluding current installments 3,396 263,859
Deferred income taxes 39,595 40,775
Non-current liabilities from discontinued operations - 87,723
Shareholders' equity 816,652 874,313
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 1,337,569 $ 1,827,765
====================================================================================================================================
(A) PRIOR YEAR RESTATED TO CONFORM TO CURRENT YEAR DISCONTINUED OPERATIONS PRESENTATION.
MORE
PERFORMANCE FOOD GROUP COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS AND INCOME STATEMENTS (UNAUDITED)
OCTOBER 1, 2005
(IN THOUSANDS, EXCEPT NET EARNINGS PER COMMON SHARE)
<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 1, 2005 OCTOBER 2, 2004 (A) OCTOBER 1, 2005 OCTOBER 2, 2004 (A)
====================================================================================================================================
Net sales $ 1,401,780 100.0% $1,306,826 100.0% $4,281,322 100.0% $3,824,226 100.0%
Cost of goods sold 1,215,912 86.7% 1,136,339 87.0% 3,726,146 87.0% 3,326,144 87.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Gross profit from continuing operations 185,868 13.3% 170,487 13.0% 555,176 13.0% 498,082 13.0%
Operating expenses 168,245 12.0% 150,126 11.4% 506,176 11.9% 452,717 11.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Operating profit from continuing 17,623 1.3% 20,361 1.6% 49,000 1.1% 45,365 1.2%
operations
- ------------------------------------------------------------------------------------------------------------------------------------
Other income (expense):
Interest expense (324) (2,554) (2,837) (7,477)
Loss on sale of receivables (1,339) (583) (3,580) (1,557)
Other, net 3,246 167 4,051 599
- ------------------------------------------------------------------------------------------------------------------------------------
Other income (expense), net 1,583 0.1% (2,970) -0.3% (2,366) 0.0% (8,435) -0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes from
continuing operations 19,206 1.4% 17,391 1.3% 46,634 1.1% 36,930 1.0%
Income taxes 7,295 0.5% 6,544 0.5% 17,794 0.4% 14,233 0.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations 11,911 0.9% 10,847 0.8% 28,840 0.7% 22,697 0.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings from discontinued operations, (464) 6,916 200,097 21,338
net of tax
- ------------------------------------------------------------------------------------------------------------------------------------
Net earnings $ 11,447 $ 17,763 $ 228,937 $ 44,035
====================================================================================================================================
Weighted average common shares outstanding:
Basic 42,316 46,523 45,381 46,282
Diluted 42,906 53,270 45,972 53,249
====================================================================================================================================
Earnings per common share:
Basic net earnings per common share:
Continuing operations $ 0.28 $ 0.23 $ 0.64 $ 0.49
Discontinued operations (0.01) 0.15 4.41 0.46
- ------------------------------------------------------------------------------------------------------------------------------------
Total $ 0.27 $ 0.38 $ 5.05 $ 0.95
====================================================================================================================================
Diluted net earnings per common share:
Continuing operations $ 0.28 $ 0.23 $ 0.63 $ 0.49
Discontinued operations (0.01) 0.14 4.35 0.44
- ------------------------------------------------------------------------------------------------------------------------------------
Total $ 0.27 $ 0.37 $ 4.98 $ 0.93
====================================================================================================================================
(A) PRIOR YEAR RESTATED TO CONFORM TO CURRENT YEAR DISCONTINUED OPERATIONS PRESENTATION.
MORE
SEGMENT DISCLOSURE
THIRD QUARTER 2005
2005 QUARTER CORPORATE & TOTAL CONTINUING
(IN THOUSANDS) BROADLINE CUSTOMIZED INTERSEGMENT OPERATIONS
================================================================================================================
Net external sales $ 856,383 $545,397 $ - $ 1,401,780
Intersegment sales 180 44 (224) -
Total sales 856,563 545,441 (224) 1,401,780
Operating profit 18,400 6,484 (7,261) 17,623
Operating profit margin 2.15% 1.19% - 1.26%
Interest expense (income) 4,309 957 (4,942) 324
Loss (gain) on sale of receivables 2,405 675 (1,741) 1,339
Depreciation 3,259 1,308 1,133 5,700
Amortization 882 - - 882
Capital expenditures 4,414 13,420 492 18,326
===============================================================================================================
THIRD QUARTER 2004
(RESTATED TO CONFORM TO CURRENT YEAR DISCONTINUED OPERATIONS PRESENTATION)
<Table>
<Caption>
2004 QUARTER CORPORATE & TOTAL CONTINUING
(IN THOUSANDS) BROADLINE CUSTOMIZED INTERSEGMENT OPERATIONS
================================================================================================================
Net external sales $ 797,011 $ 509,815 $ - $ 1,306,826
Intersegment sales 152 76 (228) -
Total sales 797,163 509,891 (228) 1,306,826
Operating profit 20,737 5,922 (6,298) 20,361
Operating profit margin 2.60 % 1.16% - 1.56%
Interest expense (income) 3,013 210 (669) 2,554
Loss (gain) on sale of receivables 1,828 656 (1,901) 583
Depreciation 3,256 1,072 944 5,272
Amortization 908 - - 908
Capital expenditures 1,878 6,252 1,094 9,224
================================================================================================================
Total assets by reportable segment and a reconciliation to the condensed consolidated balance sheets were as
follows:
<Table>
<Caption>
OCTOBER 1, 2005 JANUARY 1, 2005
==============================================================================================================
Broadline $ 860,441 $ 830,421
Customized 223,022 176,827
Corporate & Intersegment 243,732 152,006
Discontinued operations 10,374 668,511
- --------------------------------------------------------------------------------------------------------------
Total assets
$ 1,337,569 $ 1,827,765
==============================================================================================================
</Table>
MORE
SEGMENT DISCLOSURE
NINE MONTHS YTD 2005
<Table>
<Caption>
2005 PERIOD CORPORATE & TOTAL CONTINUING
(IN THOUSANDS) BROADLINE CUSTOMIZED INTERSEGMENT OPERATIONS
================================================================================================================
Net external sales $ 2,612,280 $ 1,669,042 $ - $ 4,281,322
Intersegment sales 483 160 (643) -
Total sales 2,612,763 1,669,202 (643) 4,281,322
Operating profit 54,522 18,346 (23,868) 49,000
Operating profit margin 2.09 % 1.10% - 1.14 %
Interest expense (income) 12,172 1,601 (10,936) 2,837
Loss (gain) on sale of receivables 7,450 2,176 (6,046) 3,580
Depreciation 9,906 3,740 3,277 16,923
Amortization 2,693 - - 2,693
Capital expenditures 11,429 42,437 2,819 56,685
================================================================================================================
NINE MONTHS YTD 2004
(RESTATED TO CONFORM TO CURRENT YEAR DISCONTINUED OPERATIONS PRESENTATION)
<Table>
<Caption>
2004 PERIOD BROADLINE CUSTOMIZED CORPORATE & TOTAL CONTINUING
(IN THOUSANDS) INTERSEGMENT OPERATIONS
================================================================================================================
Net external sales $ 2,295,746 $ 1,528,480 $ - $ 3,824,226
Intersegment sales 607 230 (837) -
Total sales 2,296,353 1,528,710 (837) 3,824,226
Operating profit 51,317 15,485 (21,437) 45,365
Operating profit margin 2.23% 1.01 % - 1.19%
Interest expense (income) 8,815 529 (1,867) 7,477
Loss (gain) on sale of receivables 5,879 1,973 (6,295) 1,557
Depreciation 9,879 3,216 2,529 15,624
Amortization 2,716 - - 2,716
Capital expenditures 5,991 11,832 4,025 21,848
================================================================================================================
Total assets by reportable segment and a reconciliation to the condensed consolidated balance sheets were as
follows:
<Table>
<Caption>
OCTOBER 1, 2005 JANUARY 1, 2005
==============================================================================================================
Broadline $ 860,441 $ 830,421
Customized 223,022 176,827
Corporate & Intersegment 243,732 152,006
Discontinued operations 10,374 668,511
- --------------------------------------------------------------------------------------------------------------
Total assets
$ 1,337,569 $ 1,827,765
==============================================================================================================
END