Earnings call transcript Q4 2022

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Operator

Greetings and welcome to The Chefs' Warehouse Fourth Quarter 2022 Earnings Conference Call.

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Alex Aldous, General Counsel, Corporate Secretary and Chief Government Relations Officer. Please, go ahead, sir.

Alex Aldous

Thank you, operator. morning. Good everyone. today's Leddy, Pappas, our on CEO; Chairman are Jim and CFO. call me Founder, Chris and With By now you quarter XXXX should have access press to release. earnings our fourth section. www.chefswarehouse.com It the found also at can Investor be Relations under

measures, in and Throughout this of in GAAP conference comparable as non-GAAP may measures adjusted others, with similarly per we and will accordance both differently and These historical other reconciliations and EBITDA are as adjusted share. including net titled adjusted measures non-GAAP estimated today's measures calculated Quantitative to in our income by used be historical appear calculated release. EBITDA, among GAAP presenting financial directly financial call, financial be financial not press their companies. well and most non-GAAP measurements estimated earnings

performance remarks, and cause we actual not performance. subject from and need include could that of will our not looking looking our These put uncertainties Before to everyone to our numerous guarantees of differ that discussion estimated are expect. them. on to formal forward regarding I therefore, what statements today results begin part materially statements are financial future statements, including reliance risks undue forward statements should Such remind we you

are today's on these risks Form which are on the Others Some on of in SEC mentioned release. available Annual reports discussing XX-Q, Form Report in website. our are XX-K quarterly and

go update we we for our Today, will call provide the and quarter over up questions. results to business a detail. open are fourth in Then going

over I Pappas. will Chris that, the call to With turn Chris.

Chris Pappas

return our the XXXX earnings all for activity normal you seasonality. trends. celebrations our upon quarter call. continued event-related year-end third Alex, continued and period, quarter business into and business to emerging fourth you, thank Thank Heading Fourth quarter to build the joining

team's across proud quarter, extremely during our to markets are overcome weather in our of challenging especially late ability December. their the to fourth mid execution We

high them one touch rounding product service Chefs' and a the grateful every performance XX,XXX to plus high contributing customers are model to continue we of people our for Warehouse XXXX. and Our to and out quality strong drive each to

from by sales. organically compared to XXXX net were quarter, highlights the up Specialty in include, few fourth the of driven sales organic XX.X% the growth placement prior year, growth higher unique XX.X% growth A center-of-the-plate were XX.X% Organic fourth quarter XX.X%, over which as fourth and growth customer specialty of of was case than approximately of year the pounds XX.X% quarter. approximately prior and XX.X%.

XX to profit approximately while category Gross Jim in basis year-over-year. points. decreased the margin moments. point as margins detail more profit points a category quarter in on Gross gross increased compared of fourth the basis a XXX margins few the basis XXX provide XXXX, increased center-of-the-plate specialty in will margin gross

strength excited enter the the over combined come. we Chef East. the As leverage expand quarter, previously to region, the United dynamic with CME announced We within Emirates, during to and and our markets our forward are Qatar years Steve as we to the categorically Arab team, Pyle acquisitions and Middle months supporting look and of Oman capacity grow fourth in the our

Produce our to independent of the a during in into in Operation our Specialty Cod Guaranteed Massachusetts markets Produce with coast our their restaurant. Cape England is Bedford We located to of coming outside expansion a months. New company New operations addition In anticipate Guaranteed key the produce specialty primarily few Fresh North quarter, components building the serving we the and added east Fresh seafood, and America, addition Downey's Company

add center-of-the-plate Bronx, New fresh building capabilities, step Downey's facility another our market to flagship seafood seafood customers out key categories New Adding seafood in in a Warehouse is the our in these with continue key provides the and markets. processing company Chefs' Metro growing fresh located York near us as in we York.

the In of area and This the and consolidate business. a XXX,XXX fully facility. building model for distribution a signed square and Jersey will our New going more service for will a recently Central Jersey this Mid-Atlantic York in additional allow for New Philadelphia provide in the foot will operational efficient and we Philly our new Southern growth area Once lease part market, to markets Southern capacity region New and Metro the Greater forward.

the for end Florida stellar year of our XXXX Our expect first complete substantially quarter move our in partners. is in supplier and new we for customers company our XXXX. people was of facility and to a and the by for

We talent XXXX, execute facilities. and kept the to got We level labor market with the expansion maintained products During associated and strong. the to we the capital for investment in and demand balance delivery and ahead XXXX in restarted of customers. years high-touch L.A. continue constraints build to high brought out that snapback our Florida quality sheet we the the and a of to ensure deployment our our teams pandemic at a highest

In XXXX, mining organic foray process investments acquisitions our into global specialty the complemented adding delivered domestic our distribution teams by well growth the to strong arena. these food as we key multiple started of and markets as

upscale will independent continue the in top producers. the artisanal partner we As grow, most to unique establishment food food Chefs remain service world's to

the a laser-focused and sell service continue on hybrid of will high-end our an business brands enhance unmatched as model family and with model. to companies We

facilities digital all market We will improving to expansion, for provide technology and efficiency continue platform and customer-facing stakeholders. to operational make CW our investments in

greatest our from the of Our remain differentiation people rest our service food and source the of asset industry.

and the developing We the in serve. culinary are talent operational adding, on markets we and focused retaining best

XXXX been beyond. have growth and drive Chefs' into to Warehouse excited Our never more teams

discuss turn and financial Jim an over the With on liquidity. for that quarter more Jim? information I'll detailed it to to update our

Jim Leddy

our and everyone. Chris update you, results quarter current I'll provide Thank of the our and quarter an now and operating sheet year liquidity. a versus balance good comparison provide prior on morning,

XXXX. approximately in XX.X% added of XX.X% to $XXX.X sales XXXX year-over-year to in The result of quarter approximately XX-week well in from from a sales as XXXX a for the $XXX.X increase XXXX. an contribution growth approximately of was million XX, net sales XX.X% of the increased Our fourth net the December fiscal in organic due sales quarter quarter X% for which million ended to XX-week the as was sales versus Approximately, in fourth acquisitions, growth sales quarter. quarter of the

year versus million inflation in for fourth Net for our the year-over-year Gross quarter in inflation category the the category versus in our XXXX quarter million increased fourth quarter of of the X.X% was XX% and $XXX.X XX.X% inflation to prior consisting $XXX.X profit of X.X% XXXX. specialty quarter. center-of-the-plate of fourth

points increased margins XX.X%. profit XXX to basis Gross approximately

specialty the inflation most was up was While moderately of year broad-based categories the average aggregate flat across versus quarter versus In pricing approximately at essentially quarter. prior pricing was XXXX. center-of-the-plate X% year-over-year third

drivers administrative year-over-year of the higher approximately general primary to distribution XXXX. for The $XXX.X volume facility fourth million from compensation higher benefits and expenses and expenses Selling, million XX.X% for of growth. were quarter the and costs fourth associated increased quarter with $XXX.X of XXXX costs costs,

Adjusted prior quarter. year operating versus the XX.X% increased expenses fourth

As the a to were percentage XX.X% expenses quarter of XXXX of net quarter fourth sales, adjusted for of XXXX. the XX.X% fourth operating compared for

quarter quarter compared of to driven higher fourth the costs. million gross of fourth million $XX.X partially was the primarily was for $XX.X by for income in XXXX higher profit, by operating offset XXXX. income The increase operating Operating

Please of $X.X in tax XXXX. the refinancing associated quarter XXXX, debt to loss compared quarter fourth the due that XXXX. million million purposes with of for was $X.X quarter expense $XX.X tax for was XX.X% notes a the the of the fourth extinguishment $XXX of fourth million to due our non-deductibility rate of our note for Income effective convertible million portion tax

Our to quarter per the to quarter. compared per prior GAAP was $X.X million of fourth On million quarter XXXX, EBITDA diluted the XXXX, million $XX.X net share for million net income million to of fourth non-GAAP compared we or diluted the of share Adjusted compared of of $XX.X for XXXX. for $X.XX per or $X.XX for quarter quarter per or of year. XXXX quarter $X.X $XX.X share a share the the for for basis, prior or fourth million fourth $XX.X year had of income adjusted the income diluted fourth the was net $X.XX $X.XX fourth diluted

balance an our the sheet update on and to liquidity. Turning

on completed used with convertible notes million million the in of The notes quarter, proceeds notes December convertible December XXXX. expenses sheet. the million maturing During and in approximately the to the $XXX.X repay in associated were we approximately pay we XXXX, $XXX issuance of balance and of fourth maturing a cash the of the retained of $XXX million $XXX fees transaction

interest rates by levels in debt fourth the quarter of $X.X the to driven was year for XXXX. prior outstanding was increase loss million on the the fourth higher expense debt of compared balances and $XX.X floating million of $XX.X higher million, The Interest quarter primarily period. extinguishment, versus XXXX

of of availability had million of quarter our million liquidity end fourth the in $XXX.X the $XXX.X of million we At total $XXX.X cash comprised and a facility. ABL under

As XX, of $XXX.X all debt cash was XXXX, December million, equivalents. inclusive net and of cash approximately

billion; full are estimate the full EBITDA to will million. profit $XXX of and to in billion $XXX We we for trends as that providing $XXX our XXXX our adjusted guidance to XXXX to between million $X.XX be be business, sales for $XXX year be million on Turning $X.XX the based gross the the in and guidance of full follows. current year range net year million and between

senior is the approximately unsecured shares. that conversion We notes XX.X be included to for estimated full upon be issued expect year count. count share diluted Our could the convertible accordingly the notes full are year. in currently our fully diluted dilutive million those shares And share of

to will Thank open we it at questions. point up you. And Operator? this

Operator

Thank you.

a question [Operator Our the We is will BMO of Instructions] Bania line Capital. ahead. conducting go now Please Kelly with from be question-and-answer first session.

Kelly Bania

congrats great on morning, a good Hi, year. and

you model. and line estimate same extra profit fourth for extra did quarter the magnitude? the sales for overall X% both that from impact just top acquired to from question the an week, And impact the have organic housekeeping first do the EBITDA Just by on week? The impact the

James Leddy

Yeah. revenue. Hey Kelly for Yeah, question. thanks X% the just overall was the

both acquisitions have organic that we had So didn't XXXX. that any we and -- in that was in

similar a mix be that. it'd So, of

second of into call, the the terms think visibility question, of we terms in indicated it the as how expected fourth out just profitability, kind the December, event on in then, we the season the we had as was of strong quarter to cetera. And season was I and impact quarter much had of first pretty the bookings holiday our et part more third where play of

So that played out.

generally year week different are celebrating home. the was was at in what generally is the a week XXnd year the People think normal which weak. generally usually Christmas is of I of

so And that we model in.

week, the of the The had at we that two end year. of weeks XXrd

week, did which quarter good well. a very And fairly a still we And was and it low-volume December falls fourth but operating as XXrd a the generally little that strong except for leverage, week a us. lose so is bit in final of quarter first for

Kelly Bania

Okay. maybe That's was seems I helpful. outlook of And the And that XXXX we three be what release because the and to more the way to the and company comment the getting back I a seasonality normal. guess, ask of I in the generated EBITDA thinking wanted stay XX% about guess, quarters in on last just there about that about year. generally you're at seasonality, is to

comment good if seasonality curious flowing just maybe changed particularly expectation, really recent place can pattern you on or today, a if that's at the on that's with all as all all And M&A about think anything base through? -- the with that how comment historical seasonality you to there's if is

James Leddy

I'll let say I as Yeah. -- comment Chris well. would

terms In our is first -- generated modeling type your in or because you're EBITDA high-teens quarter. quarter of right the usually XX weakest purposes that's about for of

quarters year. strongest is the the and quarter to And -- generation and middle, in generally of XX% our then, EBITDA the of the get is the quarter and final kind second the three our quarter you fourth third kind have you XX% of are that of

and has say only change quarters. to the not change, be and a strongest fourth the that going to Chef's it's first Middle that quarter is material their I'd East in periods

people so while being quarter first little weakest their there. the So they hot our our and leave which because have for a generally and of their winter strongest extremely and summer basically are

periods quarter and during Their are weakest our our third second quarter.

mentioned. that's I but So don't just changes the you the change, it think materially percentage only that ranges

Kelly Bania

Perfect. Yeah. really helpful. That's

Chris Pappas

quarter Yeah. of the coming we a color, after week to except just actually mean, first -- weakest week first for I work is but one our the And January getting holidays. you which is always the asked of going I little Kelly into quarter, about which think back our

travel, throwaway out And even it week, fourth it's week because a extra as we Jim of or a quarter, we didn't year's a that of really said, of and in last it. so week week get it's though it's much numbers had to like in regrouping, almost us fell the week that

going to strong, how of quarter Xst coming But and year at going January this shape all first the pretty does, of into out up surges no looking big into February we're -- XXXX Omicron. really start

and And we is a conferences happening, that spending are and a finally business really pleased lot are are of continued, picking up. to see happening, travel lot events of

how to the pleased New started. see very we're So Year

Kelly Bania

And lower Perfect. And broadly I comment to could a profit inflationary margin And that more had thought elaborate just I on you more about on a But are who That's how quarter. might be investors you about some business business from believe could has that back you're of from profitability. impact because very that impact that and and a we I maybe made about the had are just I thinking to there that. think helpful. thought just think topic the have I Obviously, to that the any how maybe was Chris comment dollar a I guidance. was one environment your gross I helpful. changed third just how it wanted I worried color business. gross And interesting that profit go

Chris Pappas

Sure.

as you on many there's way this way you are hold possible. And the the on as sometimes can't effect price increase you to to pass as the is going So a reasons sometimes would industry for then that long works so along like, as opposite happens fast as prices lag. down, the try up

If a deflationary margin. shift, capture able a you environment, little usually to bit you have if a have you're more big

same about look because look excess dollars an get think is you So margin, my right inflationary leverage we're at never your today. that's during X% And did in that's what usually counts, as comment at inflation, X% much times profit the we're industry, versus overhead. – inflation, was mind gross gross I environment, right inflationary what on profit we – gross your really see what and experiencing how in seeing dollars profit

can long As becomes less as a the capture you little important. margin those dollars,

really – like can really XX% were you to XX% not of you $XX contract customers don't of that So you're dollar not that's of with company. now certain we're seeing it box at think different It's more because lot long-term where making into out I would since And that $XX. we're per you course, move went keep locked costing a box. a to if and get you the huge. We a a and to go money to contracts it's from part industry. It's

It's a is, per independents the doing who move. and kind servicing of not the We That's a chains industry right? Chefs our of a gazillion contract. mostly service and lot prices billion-dollar box

they margins of dollars right are if deflation we would see some probably in where you'd So and deflationary environment, now, you started of a gross see the I see opposite to think profit those kind going happening what's keeping up now.

XX% of kind and making a mean that's keep we're box, to our of XX%. making making less XX% kind that So our expensive we're equal. on I profitability we're hedge now

Kelly Bania

Thank very helpful. Very much. you

Chris Pappas

Thanks, Kelly.

Operator

Thank you.

Slagle from of Our line next go is question Jefferies. with the ahead. Please Alex

Alex Slagle

Thanks. Good morning, guys.

Chris Pappas

Alex. Hey,

Alex Slagle

are from more like as you or perspective. hard lap, they if previous it's and ahead? it a the seems and look maybe offer demand more questions little start a weather and getting of well high-level little what the trends could you crosscurrents I just more follow industry from on are you're perspective there traffic out you've on holding year sense kind Wondering up fairly the observed a the they out what mean through a optimism but whether the in of to it's the comment cautious bit read environment underlying to and hearing customers, can all just bit Omicron up

Jim Leddy

markets it's pleased think in I we've at We're what where you seen. very in. are you're what

I kids a back can't But weather of other I busy disruptive always the with say, is school, obviously. where a people better the snowstorm cold weather, very It's So January to numbers it -- what going is have of major think people and to going parts obligations. we in we lot January. really country really But back really the hurt. realized, usually

-- as weather, the compared not great There's celebratory So not a there events going it's going of right? even a to rest quarter much with the conferences. mean, I year, to great it's good all be not on. are

had Valentine's just You Day.

so business The But is seeing. we always consumer, quarter, far the first first what say are very but pleased the we the traveler spending. we're is quarter,

are all or So optimistic that the top are are I into that the service And forth, the say, and XX% we're we entertaining. in back corporates would we there's world that and I in earners recession we traveling are blessed, we? continue. the does with know the or of press, going this

as seeing anything of in this behavior. not change we're point, So, any

good January, what So is, it the But not it's it's the quarter. February I or the think like weather fourth quarter can't second hurt. no matter

Alex Slagle

are and And I in holding inflation the Okay. what the looks year-over-year the cost look into first mean first year? quarter? like outlook it for here if guess inflation curious, quarter your on, very the levels you a food three the And And two stacked been cost if best XXXX. the and through might inflation, all have current levels like, consistent -year the have on

Jim Leddy

reporting X%. see digits the can the out started was XX% throughout with X%, third I has think inflation I quarter, versus just got And QX, that X% aggregate and inflation. sequentially we're single year-over-year Well, somewhere between as you the sequentially We XXXX, year-over-year lower. think, low

but that prime So off. to in deflation prices what of is, the have leveled I more seasonal. know see has center-of-the-plate we're down, come that that's starting I think, kind

come seasonal have like a of Those into are you the of inflated more and they season, follow prices go categories, and February, and products. prime pattern. to somewhat were high started generally, specialty January out in higher certain much normalize. than eggs, certain XXXX. extremely they they say, dairy holiday the have And parts still of down Coming been when They're

level And -- think, see -- you're when year-over-year, I prices prices. to starting off. what comparing compare higher you're starting just to So to you're is, you the you

would to the year-over-year you to start naturally, moderate. So expect

Alex Slagle

Thanks. Okay.

Operator

Thank you.

is question ahead. Our next of Peter line Please with Saleh go from BTIG. the

Peter Saleh

is calendar congrats on XXXX. ask what little existing maybe new you your for you if penetration, of Great. about it or growth more further Is seeing coming wanted just to about and new to great to business. how development XXXX, saw Thanks. be? year. or bit And able that and I lot more a And expectations are you're lot formation your pick up restaurant development, talk could, from during a a you just customers, a

Jim Leddy

Yes.

use really to are So, it's an in our think, city doing our the see normalize hate It's suffering. -- you you good this don't that in to what really to I starting good reviewing that really word right? the is numbers, customers, -- a I growth, hasn't again, normal anymore. in area is case normalized, well -- customers, we are I were think, -- growth of I unfortunately, morning. back, the I come kind be happen if you the just -- But know don't because kind organic of

the But high-volume country some now parts all haven't San restaurants Florida mean, office. But openings. are news the if has – Texas, seeing or about you in a haven't the back, restaurants, highest opening. in or or restaurants, Francisco, even moved but suburb come grossing just around, the San parts are business is of of come People of Francisco many of seeing the of I lot mega so kind to a are right? back how we're major we in good

think going ever, place, businesses to go So COVID, always that wasn't than new and on. the consumers lot appetite coming to especially is for of where there out stronger I a

of them open. have and lot been delayed starting A they're to

Miami but starting to labor big and back ones and are and small think labor of into we're of drive I starting lot volume they coming Las seeing parts even of openings. neighborhoods, opening where I where there's enough seeing York, And is we're I is it's ideal and not it's are New a coming lot the think we back. the California, the see Vegas mean, our Texas, market, situation, openings as a labor to growth. and

Peter Saleh

just you Can come freight the discussion the for associated significantly? waste down really there around on cost, cost you And and costs XXXX? really was last some you're was year, prices what expectations then Thank those that. Have and think little bit with skyrocketing freight on a your of I about there for talk that. a freight seeing lot

Jim Leddy

moderated. They Yeah, they have. definitely have

XXXX the Coast, they West more in think seeing started half really It down I still that was to last on back of the you're Europe midyear come still from year. you're some They're that have what rates – freight the elevated they completely but moderated. coming towards back seeing of are is seeing levels. there, pre-COVID down prices. not But we're definitely now

Peter Saleh

much. very you Thank

Jim Leddy

Peter. Thanks,

Operator

Thank you.

Our the from Please King. question line with is ahead. C.L. next go of Andrew Wolf

Andrew Wolf

seafood the in done to last your that existing. kind had expanding getting you, in, Chris, the and is in of evolution strategically? truck Bronx, joining the more particularly you last think I the strategic years? of with the also and Wainer, of your could case Sid synergies you. announced the the maybe a similar just already Thank you how Cape, Sid about on are little recently but sort Is What working delivering they of from in on deals – – customer, seafood sort you small for acquisitions few done Produce. then kind description good getting Produce new expected the you've Are Wainer the these late a going with and the kind with and to the acquisitions you giving I impacts guess, and this over morning. years, – like few I out are penetration and customers, give of purpose, wanted just these of the us ask wanted not that's you've the you and

Chris Pappas

Great Sure. question.

if do we But have taking line, they looking we're could even if I XX% to do drops team, eliminating if trucks lot tuck-in we're of a always they're lose because business. risk lot XX%, their so talent. basically you me day, a that, of and some what say the because base for a and sales low is think it, bottom customer really often of would accretive some facilities of the I you've obviously, the the heard expertise a that

So we we continue to of businesses in. hunt small that type for can fold those

it's in the an New overlap. business. England, So lot area have case great serves we a of that a of It

not routes Warehouse many sales farfetched it's sales So through to Chefs' and of the them We that leverage for we model take XX,XXX sell. and now the say, them eliminate can staff, to we items can could them. flow staff, consolidate duplicate and their the give

So with it's upside. tremendous a low-risk acquisition, a

And continued going in especially be have in do is and would buildings type what if think would to see market, be that new facility, industry. a folding a occupancy availability why so a typical to accommodate of building we you of consolidation the we all that we the these the us

that and business Metro be at stake companies actual Alumbrera other an a area I York said New always don't have billion $X to we're an going in seafood Chef. We is acquiring little least The New for still seafood. York, the companies York, New like

steps buy. really think us I for starting the nobody -- we're of take So to to large there's

in the have the the and attack it own overhead cutters, we them us staff, acquire give to makes them volume York stake I to and eventually or one comes a we'll sense $X.X to build where billion business. part good to the put seafood market, consolidate So accumulate a start to Brothers enough in new then when a think opportunity and small Allen really facility them New either right, is a we'll businesses, in really of

the area. of facilities feeding kind outside kind right first it's that are York little to steps we're now going, because a get like the So New of markets from

We Maryland. facilities in have

We ship facilities from processing in New that's country now but that need own these do have other fine. do their processing stuff Chicago these it and have that, a we where England works cut special, parts more of custom long-term from special the facilities lot of something markets or centers. We

then think the us small getting synergies. I accumulating leverage continue getting So and to them and consolidating you'll businesses, see and the

Andrew Wolf

you. helpful. That was really Thank

The of Obviously, the what trends inflation on would how expense other expense year-over-year. your XXXX? did with question I the of low in that. ratio. more lot there productivity structure. extent the you feeling are like extra you a guess, did kind I wanted It and contract expect But kind impact to generally, we cost there ask -- week metrics negatively labor head the sales of about into operating to as

Jim Leddy

Yes. into just leverage there. back a that week adjusted Once happened Thanks, our couple the of maybe just I fiscal it lack and basis that on think that operating week It go it. year. I was quarter Part mean, again, fell to I'd yes, was of December. Yes, -- think, a I Andy. was higher expense very of strong prior the and points that than XXrd strong a

insurance and programs to that you had had economical year overall they're And When quarter kind with little quarter, good two had also more We've a of but of self-insurance some to you before. self-insurance had you programs in the fourth that We related usual. programs, perspective, lumpiness. that volatility more full to have than our from excess through medium good that long-term a out to top are quarter, flowed more some a good those together. really so and and not things our the expenses year. that -- on the the we a X.X%, to wasn't mostly line closer But side. strong were OpEx closer main margin round very EBITDA have They reason X%

Andrew Wolf

what metrics kind new that people in on just of however at you are the do your of how you the potatoes, the operations as or I you and kind on looking mean, And How kind seeing meeting Okay. are of think type thing? terms trained side, per of sequential, that's of your kind regressing guys hour numbers metrics of kind are -- metrics get of fix employees up?

not may hopefully acquisitions as continuing new know I guess, But be guess complex. overall operations little I chain are from employees normalize? the maybe adding progressing just to is as And supply of who how kind is you're -- may not a productive, the

Jim Leddy

Yes.

been progressing well. very we've think I

lot think from improvement throughout less. know back a have we warehouse doing of Everybody process. with technology team. great us I come industry loading the new is operations other and COVID. and seen We're constantly a picking I of you've more productivity companies out and in implementing from the

We implementing technology picking and are loading constantly and warehouse new process.

our software We and technology. constantly distribution improving are

operations our to their these an various on East team on in so implementing our work have operators partners improvements. And with and of Middle we We've the travels country, that educating already operations. pieces around the started new

And companies to perspective, systems a support corporate those then as fixed as grow new We and we tuck-in that infrastructure building that we acquisitions. to leverage Chris us talked get leverage from facilities, doing and consolidating we to -- into cost a all well. by routes the grow of backbone allows as functions our and companies the leverage bring from facilities perspective facilities about consolidating on our we get -- as

Andrew Wolf

Got it. you. Thank

Jim Leddy

Andy. you, Thank

Operator

Thank you.

Our Brooks question is Company. Benchmark with from next Todd Please of the line ahead. go

Todd Brooks

good a congrats you to to and year. morning strong Good Thanks. on finish Hi. a both

Chris Pappas

you. Thank

Todd Brooks

You’re welcome, Chris. of questions. Couple quick

completed? Can incremental growth what and one you Fiscal M&A already the you Jim guys for us revenue as been into here. Downey’s one the with Jim that that now side XXXX Guaranteed acquisitions for a from far announced On for call and carrying give have sense you're as Chris.

Jim Leddy

Yes.

not wrap kind million exact, that's the about the number. a of $XXX of are impact be but think rough acquisitions may that roughly I

and million. all them think, fiscal that in $XXX between the was the day first capital XXXX XXXX I annual on roughly million we including of seaboard did acquisitions because that's we $XXX the of full impact did

not less half a it's So that. of little than

Todd Brooks

you. hear your next your on out months? I -- always Okay. magnitude then as maybe as on on view to M&A there. Great. far And are Chris looking deals sticking pipeline love XX is Thank the just or of ahead of the now And you're take pipeline in anything pace that deals the there as changing maybe

Chris Pappas

Yes. West. of I COVID, the coming out Wild as predicted mean, it's

industry is an cost the get don't to right? don't in these sure make to have businesses to generation third they warehousing of going walk consolidating The It's lot wrong where that's are just for sometimes where you expensive. see that little You very the they A new grow. reasons, many will you continue town of many, shot keep and second into back.

and diversify rather they'd selling. So they're wealth their

really just that companies just for and our our very spike. and us get to our culture fit being fit it's a into So picky long-term not short-term

So frothy. it's extremely

to because X% where X%. a little careful you very typical coming COVID not be at You the numbers see -- company or a have out of they're growing are just

many Some companies growth inflation. reasons have had tremendous with for

see the trees. careful thank we somehow XX-plus the of done years. So you through having we and we're last bring And a diligent tremendous And portfolio. very God, over family forest to in just amount who into being Chef’s have experience XX got the the acquisitions

Todd Brooks

up that following And months. Middle That's a great. Chef then you've for on owned East of number now

type you business of you around know was the that can far as think bring of now But You've that to really it. better as been is million the the excitement bring with just region to be? grow can through a what you what I business bought to major at unlocks and to obviously for think and $XXX you what's and Cup that Chefs' going property synergies when worth it midpoint that to what bear that World to event start it kind maybe the revenue Warehouse asset gain business? maybe in

Chris Pappas

things great was Yes. to really along away fit really Again a with really many to that grow. one here It a pedigree, kind. in company of management move is North we appetite for so culture who CW had but right so and it great an us to that a far opportunity it was much very was buy somebody have bold when do so and America,

team that We I had and management a to growth in believes backing were the call set wanted great that they needed just their vision. a grow. They partner it for up

not they're steak going a Allen processor. do Brothers We seafood to think is So, great. in

and whole grow In in this for many there's room continue to bring companies. of company of lots our them We new expand that portfolio been marketplace to we for them. that's We suppliers to a bring so so business long. think

think in facilities. that kind of out need space. we their they They're So, maxing major do

a to be that will their And double add very not-so-distant building. great confident we're going feel to we future Warehouse. they in to and So, business the that continue Chef's

Todd Brooks

you initial the one Great. fiscal And provided back queue. for when at then jump last conference. ICR the guidance Jim one I'll XXXX during and in the

in said were guidance you the baking revenue think contemplating I you when of X%. you were for deflation an assumption

you may potentially more Given feeling herd you we've for to the passed Are news out another the in US about there XXXX? Thanks. type that are of mean about maybe and that quarter X% deflation? setup sizes How feeling maybe here, that fiscal what is in the prices. beef beat given of it confident the some

Chris Pappas

know. I don't

Todd environment difficult think it's inflation. predict I in to very this

kind adjusted we at risk of of was I mid-single-digit that of we range case that type deflation. our kind ICR comments think said merged actually there had what in your with was

not on end I guidance say guidance. trending would the Definitely February the now based changing while it early in playing we're think of update year the right see where out definitely that. January and that we upper our I to we're towards too

terms I'll comments But as of to kind it in see of go normalizing go through my more back we earlier inflation we just XXXX.

what the it's XXXX half half higher in that XXXX moderating on what prices back to depends and and the first that year-over-year means in saw Now, of comps XXXX. in of all then you the from of kind comparing

depend year-over-year the So, will numbers on that.

in I current significant think more than changes pricing.

single-digit of more you'll mid-single-digit see or sequential think aggregate. of low start type to of changes type I sequential in kind

I mentioned you'll seen of products the types we've those I earlier I see and higher Avian have more things dairy that categories certain flu and But resetting categories start normal going will are in that think recently forward. a think eggs inflation through like roof of general, like dynamics to gone think I because start there like to the moderate. dairy

Todd Brooks

That’s super helpful. Thanks to you both.

Chris Pappas

Todd. Thanks

Operator

Thank you.

there at As further floor over this Pappas to like comments. time, turn to are Chris closing for the back no questions would I

Chris Pappas

our for Well, on joining Sure. thank everybody we earnings us call.

prouder excited and in the Thank future. executed They've calls. continue in in be team. you. XXXX really are you and our to talking our many again to to years shareholders them to for forward things great do the Chef's next into the for for forward Look about of couldn't opportunities earnings We very XXXX and look we

Operator

This teleconference. Thank today's concludes you.

disconnect participation. your you your may lines for You this Thank at time.

The Chefs' Warehouse, Inc. (CHEF) 15 Feb 232022 Q4 Earnings call transcript