EXHIBIT 99.1
[PFG LOGO] 12500 West Creek Parkway
Richmond, VA 23238
Phone (804) 484-7700
FAX (804) 484-7701
NEWS RELEASE
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 60% INCREASE
IN FIRST QUARTER NET EPS FROM CONTINUING OPERATIONS
- NET EPS FROM CONTINUING OPERATIONS INCREASED 60% TO $0.16 PER SHARE
DILUTED
- NET EARNINGS FROM CONTINUING OPERATIONS INCREASED 21% TO $5.7
MILLION
RICHMOND, VA. (MAY 2, 2006) - Performance Food Group (Nasdaq/NM:PFGC) today
announced results for the first quarter ended April 1, 2006. 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 started the year on a positive note, achieving steady growth and solid
earnings improvement," noted Bob Sledd, Chairman and CEO. "We continue to
leverage our new capacity and technology investments and invest in our sales
force as we maintain our focus on growing higher margin business."
"Consolidated net sales from continuing operations in the first quarter
increased to approximately $1.5 billion, an increase of 3% over the year earlier
period. Inflation for the first quarter was nominal. Net earnings from
continuing operations for the first quarter increased approximately 21% to
approximately $5.7 million, compared to approximately $4.7 million in the prior
year quarter. Net earnings per share from continuing operations increased 60% to
$0.16 per share diluted, compared to $0.10 per share diluted in the prior year
quarter, partially as a result of the completion of our previously announced
stock repurchase program in the first quarter. Excluding stock compensation
expense, net earnings per share from continuing operations in the first quarter
amounted to approximately $0.18 per share diluted."
"Sales in our customized segment increased approximately 7% during the first
quarter compared to the same period in the previous year. The customized segment
experienced deflation of approximately 2% in the first quarter. Sales gains in
the quarter were driven by solid growth with existing customers. Customized
results were positively impacted in
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Performance Food Group Reports First Quarter Earnings
Page 2
May 2, 2006
the quarter by improved operating efficiencies as we lapped the opening of the
Indiana distribution center in the prior year quarter."
"In the broadline segment, we focused our efforts on growing higher margin
business and completed our planned exit of certain lower margin multi-unit
business in the first quarter. Sales in broadline increased 1% in the first
quarter over the same prior year period and were impacted by our exit of
multi-unit business in the quarter. Street sales increased approximately 6% over
the prior year quarter. Inflation amounted to approximately 2% in the quarter.
We maintained our positive momentum in street sales growth and will continue to
focus our sales efforts on driving higher margin business throughout the year.
Broadline results were impacted by the transition of multi-unit business and our
investment in the expansion of our sales force."
Mr. Sledd concluded, "Our balance sheet remains exceptionally strong with a debt
to capital ratio of less than 1% at the end of the first quarter, excluding $130
million of interests in accounts receivable sold under an accounts receivable
purchase facility. Free cash flow was approximately $1.4 million during the
first quarter, compared to a use of free cash of approximately $7.2 million in
the prior year quarter. Based on current business trends, we expect net earnings
per share to be in the range of $0.32 to $0.36 per share diluted for the second
quarter of 2006. For the 2006 year, we expect net earnings per share to be in
the range of $1.22 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. Excluding the impact of stock
compensation expense, our net earnings per share projection for the year is
approximately $1.31 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 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 Reports First Quarter Earnings
Page 3
May 2, 2006
PERFORMANCE FOOD GROUP COMPANY
UNAUDITED FINANCIAL HIGHLIGHTS
THREE MONTHS ENDED
---------------------------------
(IN THOUSANDS, EXCEPT NET EARNINGS PER COMMON SHARE) APRIL 1, 2006 APRIL 2, 2005
------------- -------------
Net sales from continuing operations $ 1,469,493 $ 1,422,807
Earnings from continuing operations, net of tax $ 5,674 $ 4,683
(Loss) earnings from discontinued operations, net of tax (32) 9,012
----------- -------------
$ 5,642 $ 13,695
Weighted average number of shares outstanding:
Basic 34,404 46,872
Diluted 34,919 47,403
Earnings per common share:
Basic earnings per common share-continuing operations $ 0.16 $ 0.10
Basic earnings per common share-discontinued operations - 0.19
----------- -------------
$ 0.16 $ 0.29
Diluted earnings per common share-continuing operations $ 0.16 $ 0.10
Diluted earnings per common share-discontinued operations - 0.19
----------- -------------
$ 0.16 $ 0.29
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Performance Food Group Reports First Quarter Earnings
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May 2, 2006
PERFORMANCE FOOD GROUP COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET AND INCOME STATEMENT (UNAUDITED)
APRIL 1, 2006
(IN THOUSANDS, EXCEPT NET EARNINGS PER COMMON SHARE)
APRIL 1, 2006 DEC. 31, 2005
------------- -------------
ASSETS
Cash and cash equivalents $ 84,265 $ 99,461
Accounts and notes receivable, net, including
retained interest in securitized receivables 201,894 190,481
Inventories 296,114 303,073
Other current assets 27,690 29,188
Current assets from discontinued operations 3,669 10,115
---------- ----------
Total current assets 613,632 632,318
---------- ----------
Property, plant and equipment, net 261,695 255,816
Goodwill, net 356,597 356,597
Other intangible assets, net 50,273 51,213
Other assets 17,246 16,346
---------- ----------
Total assets $1,299,443 $1,312,290
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Checks in excess of deposits $ 97,143 $ 100,335
Trade accounts payable 270,268 258,791
Current installments of long-term debt 565 573
Other current liabilities 130,466 122,885
Current liabilities from discontinued operations 6,157 6,540
---------- ----------
Total current liabilities 504,599 489,124
---------- ----------
Long-term debt, excluding current installments 3,105 3,250
Deferred income taxes 44,656 43,399
Shareholders' equity 747,083 776,517
---------- ----------
Total liabilities and shareholders' equity $1,299,443 $1,312,290
========== ==========
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Performance Food Group Reports First Quarter Earnings
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May 2, 2006
PERFORMANCE FOOD GROUP COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET AND INCOME STATEMENT (UNAUDITED)
APRIL 1, 2006
(IN THOUSANDS, EXCEPT NET EARNINGS PER COMMON SHARE)
THREE MONTHS ENDED
--------------------------------------
APRIL 1, 2006 APRIL 2, 2005
------------- -------------
Net sales $ 1,469,493 100.0% $ 1,422,807 100.0%
Cost of goods sold 1,282,239 87.3% 1,242,891 87.4%
----------- ----- ----------- -----
Gross profit from continuing operations 187,254 12.7% 179,916 12.6%
Operating expenses 176,532 12.0% 170,490 11.9%
----------- ----- ----------- -----
Operating profit from continuing operations 10,722 0.7% 9,426 0.7%
----------- ----- ----------- -----
Other income (expense):
Interest income 472 125
Interest expense (354) (973)
Loss on sale of receivables (1,637) (1,006)
Other, net 87 39
----------- ----- -----------
Other expense, net (1,432) -0.1% (1,815) -0.2%
----------- ----- ----------- -----
Earnings before income taxes from continuing operations 9,290 0.6% 7,611 0.5%
Income taxes 3,616 0.2% 2,928 0.2%
----------- ----- ----------- -----
Earnings from continuing operations, net of tax $ 5,674 0.4% $ 4,683 0.3%
----------- ----- ----------- -----
(Loss) earnings from discontinued operations, net of tax (32) 9,012
----------- -----------
Net earnings $ 5,642 $ 13,695
=========== ===========
Weighted average common shares outstanding:
Basic 34,404 46,872
Diluted 34,919 47,403
=========== ===========
Earnings per common share:
Basic net earnings per common share:
Continuing operations $ 0.16 $ 0.10
Discontinued operations - 0.19
----------- -----------
Total $ 0.16 $ 0.29
=========== ===========
Diluted net earnings per common share:
Continuing operations $ 0.16 $ 0.10
Discontinued operations - 0.19
----------- -----------
Total $ 0.16 $ 0.29
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Performance Food Group Reports First Quarter Earnings
Page 6
May 2, 2006
PERFORMANCE FOOD GROUP COMPANY
2006 COMPARED TO 2005
FIRST QUARTER
SEGMENT DISCLOSURE
CORPORATE & TOTAL CONTINUING
2006 BROADLINE CUSTOMIZED INTERSEGMENT OPERATIONS
- ---- --------- ---------- ------------ ----------------
FIRST QUARTER
Net external sales $ 868,486 $ 601,007 $ - $ 1,469,493
Intersegment sales 168 67 (235) -
Total sales 868,654 601,074 (235) 1,469,493
Operating profit 10,203 7,873 (7,354) 10,722
Operating profit margin 1.17% 1.31% - 0.73%
Interest expense (income) 5,043 1,388 (6,077) 354
Loss (gain) on sale of receivables 2,557 824 (1,744) 1,637
Depreciation 4,352 1,570 80 6,002
Amortization 861 - - 861
Capital expenditures 11,059 936 46 12,041
CORPORATE & TOTAL CONTINUING
2005 BROADLINE CUSTOMIZED INTERSEGMENT OPERATIONS
- ---- --------- ---------- ------------ ----------------
FIRST QUARTER
Net external sales $ 860,044 $ 562,763 $ - $ 1,422,807
Intersegment sales 225 62 (287) -
Total sales 860,269 562,825 (287) 1,422,807
Operating profit 11,683 5,766 (8,023) 9,426
Operating profit margin 1.36% 1.02% - 0.66%
Interest expense (income) 3,899 267 (3,193) 973
Loss (gain) on sale of receivables 2,776 743 (2,513) 1,006
Depreciation 4,283 1,164 75 5,522
Amortization 907 - - 907
Capital expenditures 5,262 13,198 86 18,546
TOTAL ASSETS BY REPORTABLE SEGMENT AND A RECONCILIATION TO THE CONDENSED
CONSOLIDATED BALANCE SHEETS WERE AS FOLLOWS:
APRIL 1, 2006 DEC. 31, 2005
------------- -------------
BROADLINE $ 870,472 $ 858,211
CUSTOMIZED 232,447 250,397
CORPORATE & INTERSEGMENT 192,855 193,567
DISCONTINUED OPERATIONS 3,669 10,115
---------- ----------
TOTAL ASSETS $1,299,443 $1,312,290
========== ==========
NOTE: 2005 SEGMENT DISCLOSURE HAS BEEN RECLASSIFIED TO REFLECT THE REALLOCATION
OF CORPORATE COSTS TO THE BROADLINE SEGMENT TO BE CONSISTENT WITH THE 2006
PRESENTATION.
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PERFORMANCE FOOD GROUP COMPANY
NON-GAAP RECONCILIATIONS
PROJECTED 2006 EPS RECONCILIATION EXCLUDING IMPACT OF STOCK COMPENSATION EXPENSE
ESTIMATED DILUTED EPS
------------------------------------
LOW HIGH
--- ----
Estimated full year 2006 diluted EPS $ 1.22 - $ 1.30
Add: Projected stock compensation expense (1) 0.09 - 0.10
-------- -- --------
Adjusted estimated full year 2006 diluted EPS to exclude
stock compensation expense $ 1.31 - $ 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.
IMPACT OF STOCK COMPENSATION ON Q1 2006 DILUTED EPS
NET EARNINGS SHARES EPS
------------ ------ ---
Amounts reported for diluted EPS from continuing operations $5,674 34,919 $ 0.16
Stock compensation , net of tax (2) 520
------ ------ --------
Adjusted diluted EPS from continuing operations excluding impact of stock compensation $6,194 34,919 $ 0.18
====== ====== ========
(2) Amount calculated using continuing operations effective tax rate of 38.9%.
FREE CASH FLOW
Q1 2006 Q1 2005
------- -------
Net income from continuing operations $ 5,674 $ 4,683
ADD BACK:
Stock compensation expense 851 19
Amortization expense 861 907
Amortization of deferred issue costs 78 187
Depreciation expense 6,002 5,522
SUBTRACT:
Capital expenditures (12,041) (18,546)
-------- --------
FREE CASH FLOW $ 1,425 $ (7,228)
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