EXHIBIT 99.1
[PERFORMANCE 12500 West Creek Parkway
FOOD GROUP Richmond, VA 23238
LOGO] Phone (804) 484-7700
FAX (804) 484-7701
NEWS RELEASE
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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 38% INCREASE
IN 2005 NET EPS FROM CONTINUING OPERATIONS
(CONTINUING OPERATIONS ADJUSTED TO EXCLUDE THE IMPACT OF 2004 CHARGE FOR
REDEMPTION OF CONVERTIBLE NOTES. 2005 NET EPS INCREASED 70% INCLUDING 2004
CHARGE)
- 2005 ADJUSTED NET EARNINGS INCREASED 27% TO $41.8 MILLION
- 2005 ADJUSTED NET EPS INCREASED 38% TO $0.95 PER SHARE DILUTED
- 2005 OPERATING PROFIT INCREASED 11% TO $70.5 MILLION
RICHMOND, VA. (FEB 7, 2006) - Performance Food Group (Nasdaq/NM:PFGC) today
announced results for the fourth quarter and year ended December 31, 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.
"We concluded the 2005 fourth quarter and year with solid earnings growth and a
series of significant accomplishments," commented Bob Sledd, Chairman and CEO.
"We successfully completed the sale of our fresh-cut segment, retired
substantially all of our debt on the balance sheet, completed a tender offer for
the repurchase of 10.1 million shares of our common stock and announced our
ongoing repurchase program for up to $100 million of our common stock,
approximately $60 million of which had been repurchased as of year end. In our
continuing operations, we added approximately 45% of new capacity in our
customized segment. We also streamlined our infrastructure in the broadline
segment and are standardizing best practices, successfully introducing new
technologies to support operational excellence in the areas of sales,
warehousing and transportation management."
"Sales in our customized segment increased 9% during the fourth quarter and full
year compared to the same periods in the previous year. The customized segment
experienced slight deflation in the fourth quarter and approximately 1%
inflation for the full year. Sales gains in the fourth quarter and year were
driven by continued growth with existing customers. We completed our customized
capacity expansion in 2005, which we believe
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February 7, 2006
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positions us favorably for potential new business in 2006. Our new capacity also
enables us to more efficiently serve our customers by transferring existing
business into new facilities and reducing driving miles, offsetting some of the
cost associated with the new facilities."
Mr. Sledd added, "We are pleased with our sales in the broadline segment, both
for the quarter and the year. Sales increased approximately 5% in the fourth
quarter and approximately 12% for the full year over the same prior year
periods. We planned for slower but more profitable growth as we focus strongly
on growing our street sales. We lapped a major multi-unit customer added in late
2004 and are exiting certain lower margin multi-unit business in the fourth
quarter and first quarter of 2006. Inflation amounted to approximately 2% in the
quarter and year. For the full year, street sales increased approximately 5%
over the previous year. We began to build momentum in our street sales growth in
the fourth quarter and we expect it to continue over the course of 2006. We will
also continue to maintain our focus on operational excellence initiatives."
Consolidated net sales from continuing operations in the fourth quarter
increased to $1.4 billion, an increase of approximately 7% over the year earlier
period. Inflation for the fourth quarter was approximately 1%. Net earnings from
continuing operations for the 2005 fourth quarter increased approximately 235%
to $12.9 million, compared to approximately $3.9 million in the prior year
quarter. The prior year period includes the impact during the 2004 fourth
quarter of a one-time $6.1 million after-tax charge related to the redemption of
the Company's convertible notes. Excluding the impact of the Company's
redemption of the convertible notes, net earnings from continuing operations for
the 2005 fourth quarter increased approximately 30% over the prior year's
comparable quarter. Net earnings per share from continuing operations increased
approximately 338% to $0.35 per share diluted, compared to $0.08 per share
diluted in the prior year quarter, which includes the impact of the Company's
redemption of its convertible notes in 2004 and reflects the execution of the
Company's stock repurchase programs in 2005.
Consolidated net sales from continuing operations for the full year were $5.7
billion, an increase of approximately 11% from the prior year period. Internal
growth represented all of the Company's sales increase for the year. Inflation
for 2005 amounted to approximately 1 1/2%. Net earnings from continuing
operations for the year increased approximately 57% to $41.8 million compared to
$26.6 million in the prior year and net earnings per share from continuing
operations increased approximately 70% to $0.95 per share diluted, compared to
$0.56 per share diluted in the prior year. Excluding the impact of the Company's
redemption of its convertible notes in 2004, the Company's net earnings from
continuing operations for the 2005 year increased approximately 27% compared to
the prior year, with earnings per share increasing approximately 38%.
Net earnings per share from discontinued operations were $0.09 in the quarter
and $4.65 for the year,
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February 7, 2006
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while consolidated net earnings per share including both continuing operations
and discontinued operations were $0.44 in the quarter and $5.60 for the year.
Mr. Sledd concluded, "Our balance sheet remains exceptionally strong with a debt
to capital ratio of less than 1% at the end of the fourth quarter, excluding
$130 million of interests in accounts receivable sold under an accounts
receivable purchase facility. For the 2006 year, we expect net earnings per
share to be in the range of $1.20 to $1.30 per share diluted, which reflects our
anticipated stock compensation expense for the year of approximately $5.0 to
$5.5 million, or approximately $0.09 to $0.10 per share, and the completion of
our previously announced program to repurchase up to $100 million of our
outstanding common stock. Excluding the impact of stock compensation expense of
approximately $0.09 to $0.10, our earnings per share projection for the year is
approximately $1.29 to $1.40 per share diluted."
Performance Food Group markets and distributes more than 66,000 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 Company's ability to achieve projected operational
efficiencies and increase sales; 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.
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PERFORMANCE FOOD GROUP COMPANY
UNAUDITED FINANCIAL HIGHLIGHTS
<Table>
<Caption>
(IN THOUSANDS, EXCEPT NET EARNINGS PER COMMON SHARE) THREE MONTHS ENDED
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DEC. 31, 2005 JAN. 1, 2005
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Net sales from continuing operations $ 1,440,050 $ 1,348,852
Earnings from continuing operations, net of tax $ 12,923 $ 3,861
Earnings from discontinued operations, net of tax 3,391 4,662
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$ 16,314 $ 8,523
Weighted average number of shares outstanding:
Basic 36,791 46,748
Diluted 37,262 47,301
Earnings per common share:
Basic earnings per common share-continuing operations $ 0.35 $ 0.08
Basic earnings per common share-discontinued operations 0.09 0.10
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$ 0.44 $ 0.18
Diluted earnings per common share-continuing operations $ 0.35 $ 0.08
Diluted earnings per common share-discontinued operations 0.09 0.10
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$ 0.44 $ 0.18
</Table>
Note: Prior year data has been reclassified to conform to current year
discontinued operations presentation.
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PERFORMANCE FOOD GROUP COMPANY
UNAUDITED FINANCIAL HIGHLIGHTS
<Caption>
(IN THOUSANDS, EXCEPT NET EARNINGS PER COMMON SHARE) TWELVE MONTHS ENDED
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DEC. 31, 2005 JAN. 1, 2005
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Net sales from continuing operations $ 5,721,372 $ 5,173,078
Earnings from continuing operations, net of tax $ 41,764 $ 26,558
Earnings from discontinued operations, net of tax 203,487 26,000
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$ 245,251 $ 52,558
Weighted average number of shares outstanding:
Basic 43,233 46,398
Diluted 43,795 47,181
Earnings per common share:
Basic earnings per common share-continuing operations $ 0.97 $ 0.57
Basic earnings per common share-discontinued operations 4.70 0.56
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$ 5.67 $ 1.13
Diluted earnings per common share-continuing operations $ 0.95 $ 0.56
Diluted earnings per common share-discontinued operations 4.65 0.55
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$ 5.60 $ 1.11
</Table>
Note: Prior year data has been reclassified to conform to current year
discontinued operations presentation.
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PERFORMANCE FOOD GROUP COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET AND INCOME STATEMENT (UNAUDITED)
DECEMBER 31, 2005
(IN THOUSANDS, EXCEPT NET EARNINGS PER COMMON SHARE)
ASSETS DEC. 31, 2005 JAN. 1, 2005
---------------------------------------
Cash and cash equivalents $ 99,461 $ 52,322
Accounts and notes receivable, net, including
retained interest in securitized receivables 190,481 171,191
Inventories 303,073 287,019
Other current assets 27,301 25,463
Current assets from discontinued operations 10,115 109,924
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Total current assets 630,431 645,919
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Property, plant and equipment, net 255,816 201,248
Goodwill, net 356,597 354,037
Other intangible assets, net 51,213 54,471
Other assets 16,346 13,503
Non-current assets from discontinued operations -- 558,587
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Total assets $ 1,310,403 $ 1,827,765
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LIABILITIES AND SHAREHOLDERS' EQUITY
Checks in excess of deposits $100,335 $103,948
Trade accounts payable 258,791 227,882
Current installments of long-term debt 573 661
Other current liabilities 122,885 112,580
Current liabilities from discontinued operations 6,540 116,024
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Total current liabilities 489,124 561,095
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Long-term debt, excluding current installments 3,250 263,859
Deferred income taxes 43,399 40,775
Non-current liabilities from discontinued operations -- 87,723
Shareholders' equity 774,630 874,313
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Total liabilities and shareholders' equity $ 1,310,403 $ 1,827,765
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Note: Prior year data has been reclassified to conform to current year
discontinued operations presentation.
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PERFORMANCE FOOD GROUP COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET AND INCOME STATEMENT (UNAUDITED)
DECEMBER 31, 2005
(IN THOUSANDS, EXCEPT NET EARNINGS PER COMMON SHARE)
<Table>
<Caption>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DEC. 31, JAN 1, DEC. 31, JAN. 1,
2005 2005 2005 2005
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Net sales $1,440,050 100.0% $1,348,852 100.0% $5,721,372 100.0% $5,173,078 100.0%
Cost of goods sold 1,247,820 86.7% 1,169,973 86.7% $4,973,966 86.9% 4,496,117 86.9%
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Gross profit from continuing operations 192,230 13.3% 178,879 13.3% 747,406 13.1% 676,961 13.1%
Operating expenses 170,752 11.8% 160,564 11.9% 676,928 11.9% 613,281 11.9%
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Operating profit from continuing
operations 21,478 1.5% 18,315 1.4% 70,478 1.2% 63,680 1.2%
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Other income (expense):
Interest income 931 -- 4,651 340
Interest expense (409) (1,014) (3,246) (8,274)
Loss on sale of receivables (1,576) (864) (5,156) (2,421)
Loss on redemption of Convertible Notes -- (10,127) -- (10,127)
Other, net 33 99 365 141
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Other income (expense), net (1,021) -0.1% (11,906) -0.9% (3,386) -0.0% (20,341) -0.4%
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Earnings before income taxes from
continuing operations 20,457 1.4% 6,409 0.5% 67,092 1.2% 43,339 0.8%
Income taxes 7,534 0.5% 2,548 0.2% 25,328 0.5% 16,781 0.3%
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Earnings from continuing operations $ 12,923 0.9% $ 3,861 0.3% $ 41,764 0.7% $ 26,558 0.5%
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Earnings from discontinued operations,
net of tax 3,391 4,662 203,487 26,000
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Net earnings $ 16,314 $ 8,523 $ 245,251 $ 52,558
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Weighted average common shares outstanding:
Basic 36,791 46,748 43,233 46,398
Diluted 37,262 47,301 43,795 47,181
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Earnings per common share:
Basic net earnings per common share:
Continuing operations $ 0.35 $ 0.08 $ 0.97 $ 0.57
Discontinued operations 0.09 0.10 4.70
0.56
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Total $ 0.44 $ 0.18 $5.67 $ 1.13
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Diluted net earnings per common share:
Continuing operations $ 0.35 $ 0.08 $ 0.95 $ 0.56
Discontinued operations 0.09 0.10 4.65 0.55
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Total $ 0.44 $ 0.18 $ 5.60 $ 1.11
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</Table>
Note: Prior year data has been reclassified to conform to current year
discontinued operations presentation.
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PERFORMANCE FOOD GROUP COMPANY
2005 COMPARED TO 2004
FOURTH QUARTER
SEGMENT DISCLOSURE
CORPORATE & TOTAL CONTINUING
2005 BROADLINE CUSTOMIZED INTERSEGMENT OPERATIONS
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FOURTH QUARTER
Net external sales $868,513 $571,537 $ -- $1,440,050
Intersegment sales 170 63 (233) --
Total sales 868,683 571,600 (233) 1,440,050
Operating profit 22,267 6,635 (7,424) 21,478
Operating profit margin 2.56% 1.16% -- 1.49%
Interest expense (income) 4,826 1,362 (5,779) 409
Loss (gain) on sale of receivables 382 673 521 1,576
Depreciation 3,266 1,434 1,195 5,895
Amortization 869 -- -- 869
Capital expenditures 13,640 5,815 1,436 20,891
<Table>
<Caption>
CORPORATE & TOTAL CONTINUING
2004 BROADLINE CUSTOMIZED INTERSEGMENT OPERATIONS
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FOURTH QUARTER
Net external sales $824,754 $524,098 $ -- $1,348,852
Intersegment sales 199 72 (271) --
Total sales 824,953 524,170 (271) 1,348,852
Operating profit 18,879 6,053 (6,617) 18,315
Operating profit margin 2.29% 1.15% -- 1.36%
Interest expense (income) 3,551 218 (2,755) 1,014
Loss (gain) on sale of receivables 1,966 623 (1,725) 864
Depreciation 3,578 1,139 1,029 5,746
Amortization 910 -- -- 910
Capital expenditures 9,098 8,938 751 18,787
</Table>
TOTAL ASSETS BY REPORTABLE SEGMENT AND A RECONCILIATION TO THE CONDENSED
CONSOLIDATED BALANCE SHEETS WERE AS FOLLOWS:
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<Table>
<Caption>
DEC. 31, 2005 JAN. 1, 2005
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BROADLINE $ 848,996 $ 830,421
CUSTOMIZED 250,397 176,827
CORPORATE & INTERSEGMENT 200,895 152,006
DISCONTINUED OPERATIONS 10,115 668,511
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TOTAL ASSETS $ 1,310,403 $ 1,827,765
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</Table>
PERFORMANCE FOOD GROUP COMPANY
2005 COMPARED TO 2004
YEAR-TO-DATE
SEGMENT DISCLOSURE
<Table>
<Caption>
CORPORATE & TOTAL CONTINUING
2005 BROADLINE CUSTOMIZED INTERSEGMENT OPERATIONS
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YEAR-TO-DATE
Net external sales $3,480,793 $2,240,579 $ -- $5,721,372
Intersegment sales 653 223 (876) --
Total sales 3,481,446 2,240,802 (876) 5,721,372
Operating profit 76,789 24,981 (31,292) 70,478
Operating profit margin 2.21% 1.11% -- 1.23%
Interest expense (income) 16,998 2,963 (16,715) 3,246
Loss (gain) on sale of receivables 7,832 2,849 (5,525) 5,156
Depreciation 13,172 5,174 4,472 22,818
Amortization 3,562 -- -- 3,562
Capital expenditures 25,069 48,252 4,255 77,576
</Table>
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<Caption>
CORPORATE & TOTAL CONTINUING
2004 BROADLINE CUSTOMIZED INTERSEGMENT OPERATIONS
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YEAR-TO-DATE
Net external sales $3,120,500 $2,052,578 $ -- $5,173,078
Intersegment sales 806 302 (1,108) --
Total sales 3,121,306 2,052,880 (1,108) 5,173,078
Operating profit 70,196 21,538 (28,054) 63,680
Operating profit margin 2.25% 1.05% -- 1.23%
Interest expense (income) 12,366 747 (4,839) 8,274
Loss (gain) on sale of receivables 7,845 2,596 (8,020) 2,421
Depreciation 13,457 4,355 3,558 21,370
Amortization 3,626 -- -- 3,626
Capital expenditures 15,089 20,770 4,776 40,635
</Table>
TOTAL ASSETS BY REPORTABLE SEGMENT AND A RECONCILIATION TO THE CONDENSED
CONSOLIDATED BALANCE SHEETS WERE AS FOLLOWS:
<Table>
<Caption>
DEC. 31, 2005 JAN. 1, 2005
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BROADLINE $ 848,996 $ 830,421
CUSTOMIZED 250,397 176,827
CORPORATE & INTERSEGMENT 200,895 152,006
DISCONTINUED OPERATIONS 10,115 668,511
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TOTAL ASSETS $ 1,310,403 $ 1,827,765
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</Table>
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PERFORMANCE FOOD GROUP COMPANY
EPS RECONCILIATION FOR IMPACT OF CONVERTIBLE NOTES REDEMPTION ON CONTINUING
OPERATIONS
(amounts in thousands, except per share data)
Amounts have been reclassified to conform to current year discontinued
operations presentation
4TH QUARTER 2004
NET EARNINGS SHARES EPS
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Diluted EPS from continuing operations, as reported $ 3,861 47,301 $ 0.08
Add: After-tax impact of Convertible Notes redemption
(utilizing quarterly effective tax rate of 39.75%) 6,101 --
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Adjusted Diluted EPS from continuing operations, without
assumed conversion 9,962 47,301 0.21
Interest on Convertible Notes, net of tax 218 1,074
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Adjusted Diluted EPS from continuing operations after
conversion of notes $ 10,180 48,375 $ 0.21
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FULL YEAR 2004
NET EARNINGS SHARES EPS
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Diluted EPS from continuing operations, as reported $ 26,558 47,181 $ 0.56
Add: After-tax impact of Convertible Notes redemption
(utilizing full year effective tax rate of 38.72%) 6,205 --
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Adjusted Diluted EPS from continuing operations, without
assumed conversion $ 32,763 47,181 $ 0.69
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Note: Interest on convertible notes was antidilutive for Full Year 2004,
therefore no presentation of assumed conversion is necessary.
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PERFORMANCE FOOD GROUP COMPANY
PROJECTED 2006 EPS RECONCILIATION EXCLUDING IMPACT OF STOCK COMPENSATION EXPENSE
<Table>
<Caption>
ESTIMATED DILUTED EPS
-----------------------------------
LOW HIGH
-----------------------------------
Estimated full year 2006 diluted EPS $ 1.20 -- $ 1.30
Add: Projected stock compensation expense 0.09 -- 0.10(1)
-----------------------------------
Adjusted estimated full year 2006 diluted EPS to exclude
stock compensation expense $ 1.29 -- $ 1.40
===================================
(1) Amount calculated as estimated pre-tax expense of $5.0 - $5.5 million,
a projected tax rate of 39.0% and a projected weighted average shares
of approximately 35.0 million.
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