PFGC - Earnings call transcript Q4 2020 | Performance Food Group Company

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Operator

Good day and welcome to PFG’s Fiscal Year Q4 2020 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Bill Marshall, Vice President, Investor Relations for PFG. Please go ahead, sir.

Bill Marshall

Thank you, Laurie, and good morning. We're here with George Holm, PFG’s CEO and Jim Hope, PFG’s CFO. release results XXXX this press and fourth a year full morning. issued regarding fiscal our quarter We The results discussed and non-GAAP on this call adjusted certain will for items. results include GAAP GAAP back of earnings these to non-GAAP The the be reconciliation the the release. of corresponding at found measures measures can

You can the release earnings Investor our of section find pfgc.com. at our website in Relations

statement earnings results. Our and statements and forward-looking and earnings release Please the filing factors remarks review contain for on today's forward-looking to this our that call and materially section cautionary SEC our could statements forward-looking of from our release actual the future in differ in various projections. projections results cause

call Now, to George. I'd turn like the over to

George Holm

been the is welcoming offerings of an Food of Group. in still We XX bond working XX, Reinhart, and Performance close Food great Reinhart, family. the proud and to announcing that for To a we the extraordinary the Performance Group fall while integrate Reinhart transforming acquisition our on business. we of can the has With the months There for equity quickly transaction, the year, finance the year of. be fiscal December organization with our deal successful closed started organization reflect what Eby-Brown to into on

to We eight first the board of fiscal also months and team leadership great of members welcome in XXXX. deal director. year accomplished new and our Performance a still our grew

of that the an our year. as penetration after and to organic performance grow increase independent product what having to and through pandemic. the to continued slow began know world happened We In outstanding team February, spread lockdown brand and Our COVID-XX group the was all shortly cases. short,

our adapt of moving cut customers look the associates new for lines while customers shifting business appropriate landscape new keep our the serve quickly taking safe moved reality inventory cost, and help to associates kept healthy. PFG for was While our reduce and steps levels, and forward. to to our the everyone, we

volume workforce of back we our rising the demand. rebounded, brought furloughed As some to match

eye our keep operating to of we continue and recovery. our on move a expenses will forces We close through this period labor

invest Of customers market our course, additional share. in to we assist and our business also drive

a fourth our capital restaurants sheet. but businesses also multiple the PFG on Jim innovate. successful running. and During concepts, been will balance and they The new business creativity stream quickly completed of level pickup the has as strength detail our and we've and moment. has need. many strengthen always more has by liquidity on been getting pivoted took impressed, new service side, resilient customers and to provide their right raises the we of seen been evident. recently helping our quarter, Meanwhile, curbside surprise. never more with delivery restaurant fiscal their restaurateur became in a Takeout menus most The keep Many for The importance dedication the and of importantly, agility redesigning industry has financial new not to customers. our revenue products

reinforcing force, decision fiscal the help considerably made streams to quarter. and new efforts off our support our fourth has believe decision win We sales leadership in business. our a strategic customers continue strong existing this Our paid to to of

particular well Foodservice settings. Mexican range a ahead total this Foodservice and Italian, customer town in across Our sales of dollar dollar total And strength outperformance apparent were sales with was of industry. pizza, the accounts

of volume why our channel have XX.X%. you holding the independent independent cases XX.X%. declined case Including are of our fiscal case Our was decline Reinhart, during down Many results XX.X%, company organic so total well. independent up just X.X% outpacing company in flat, to asked almost case organic compared our quarter total a of fourth decline the

we believe organization that play, at factors apart. While several there are set few will our things I a highlight

than we support we when they critical time help our First, well-trained for force people. sales were more the and experienced -- from gains our market during need our customers the before, believe got with ever rewarded share hands-on of sales we

to This Second, our shipments moving. meet height the a customer suppliers decision their we chain we from were our to of products that suppliers the meant accept demand to sell and at able strategic supply made to had keep crisis.

our business We and pizza Third, strength a believe have and of tailwind. that results business our in positions mix our well the environment. The us in nice been has encouraging. the provided for of in Foodservice Italian segment mix current particular very

significant our business of than of our independent fiscal greater case in previous XXXX. now Last in XXXX, over In accounts believe business a independent to we from adding also compared quarter and locations this of fact, IPO outperformance new quarter, reflects came channel. independent chain has XXX been integrated. overall that quarter any the the volume We fully percentage new during fourth which Foodservice legacy since discussed

chains. profitable as in for look as independent channel open business, We new well continue to

Our see Vistar also has improvement. business to some begun

late base bright So, We're for we business on The theaters will through and And steady industry, the data to next that coffee sales held movie the early service the hardest the from weekly August of impacted working few to through continues the Today, are same our for improve have providing by trends. results were office of home. retail and to business. were many continue provided a spots that value August. period sales particularly, at sales we people expect of restrictive conditions restaurant corrections hit. over relative In Vistar. July X. Despite balance look serve and be reopening reinstituting channels our lower channels are prepared hopeful weeks the for several begin we weekly many year June, the extended the and in for the we weeks some they cases the be the an over state

organic total XX.X% a negative running are Our sales about at clip.

despite West continued in softness Northeast digit Our single the and decline service sales been have low in organic the the Coast.

Reinhart areas we continued the pleased measure. the have integrate in going on so very with the While of or schedule on, organization. no of has this progress ahead all far, We're tracking been to successfully we

in continue the the feel extraordinary timing we communities. PFG the of are are laid to mile and of These customers going targets that out the Associates We synergy I at for how confident and our times, and am deal to announcement. extra amount proud care our

Nick of many examples for following truckloads an New frontline Philadelphia have I’m to back We their healthcare in such act giving to six Jersey on I location with our hospitals act area and the spotted Department doing of an amazing blaze heroism managers Fire Today, our until divisions Vistar products and arrived. support alerted heroism Nick to individuals XXX highlight Frkovich, of and Nick one before action to fire local start our the mid-Atlantic to building fight are the true Chicago. the into of workers. as of Performance building for to occupants happy a kindness communities called fire. he want jumping and extinguishers when Foodservice, accomplishment. demonstrated using

recognize of with who hard a cases the to locations, dedication to a Customized XXX,XXX supply first. taking associates of He milestone recently division to stepped our I’m for every our the from act Hyde, family services driver our on Wayne kindness. come a people the his for Rob of of gratitude than ensure in they and putting expect young earned without want long I to stranded amazing site out strong XX-year Wayne responders After central the delivering customers need our cases highlight of flat with the an our call have are keep veteran communities. old driver thankful driver's food help I for tire in from more Reinhart and value receive to PFG all achieving to want exemplified working XX to working an Performance are shift us. chain a so thousand our for I Next, Florida. error. day Food and customers the to who want Group

I As many last will stronger in from period in as continue believe earnings said a we company this ways. webcast, emerge that to I our

is market opportunities Our engaged day. sales seizing force every in share

profit situation the to recovers. industry our this chain in food diligently and Meanwhile, capital to vital to supply working adapt protect is in our the as steadfast long-term we and strong are the reduce market to very to cost position commitment The whether country’s both we're is to to serve realities. current base thrive growth. We a new

down this to existing hard and to market are in role in we lines our thank We like our strength associates, the endeavor. about play force and build would associates going you new share. are so our who customers more. of will on gain to warehouse Jim, much partnerships and I chain. up business give our of things on the To who and of drivers inventory, fourth the engagement the workers who over manage that, the position. I've and proud the working With our individuals who sales help the financial our all turn of and to of I'm never the for felt supply better and more detail are quarter finances frontlines

Jim Hope

have to everyone. position the and asked fourth ability profile George, you our generate start liquidity you, for quarter. morning, cash and declines. about of good our Thank to volume with like I’d flow significant cash Many full with and year

million compared of fiscal the manage recent of working and on the capital down strong flow working payables, pleased receivables. associates we free worked organization's position. fourth our financial $XXX to significant operating who tirelessly to result year lower manage cash increase and a was $XXX liquidity. work a very million in the flow inventory our XXXX. the cash like continuing million all generate flow with Despite $XXX are operating focus I'd million thank manage cash and while generated to improvements This during cash in flow quarter about the nearly the as cash in presents to collecting of results we increase That to our flow. of We fiscal and most full free $XXX ability capital operating in and quarter

in described when volume past, is business typically we've the As generates our declining. cash

our rebound the As outflow. inventory cash and typically rebuild begins to volume we experience levels, we

and cash levels will continue which the in result, if coming use a anticipate of we would months. receivables, a As be of restaurants to reopen, higher inventory

We situation $XXX a Of forward quarter. right very total it of to this with means position course, million an quarter in continue $X.X nearly increase liquidity our end the the as of the third approximately our fiscal strong we ended look trends of since to direction. billion, move business

about from the cash plus at on improvement availability the was fourth quarter capital of working as positive of flow liquidity Facility. cash liquidity The end ABL million generated April. in of our of billion fiscal consisted as activities the financing Our well of result $X.X $XXX the

fiscal capital balance to offerings liquidity raised income we reminder, fixed and equity through fourth a position. strengthen of during the and mix quarter As our a sheet

$XXX.X of advantage action additional capital positioned long-term proceeds we'll we to markets opportunities quarter, million we to the through We opportunities believe for that shares and million. XX.X the institutions. During look issued net us us as will XXX-day take use economic raised near customers. has market million several over prolonged our lending in $XXX protect debt of with service the as decisive downturn. loan our organic an new issued continue new million In to $XXX for We a liquidity of from term, business and our well term share

take the our opportunities also positioned to the sheet that strength intermediate advantage over term. may However, arise has of of M&A balance PFG

other our will two shareholder important I'd value. quarter, targeted can our disciplined also during with debt inventory capital like the always, enhance believe we and transactions be allocation items to touch reserves. briefly and that upon bad As

in fourth calculate in know, increase these closely impacts backdrop. to efforts items the challenging same fourth estimate monitored $XX.X this million line our in and of of areas bad $XX.X both that I'm pleased in we team's the million in item, color you quarter We the a we bit the expense we quarter. year. fiscal the debt and with for increase a quarter our a as resulted debt bad despite As use A on full of COVID-XX have last did both methodology

due our significantly, theater their environment, that had customer fiscal Specifically, the aging the total, current segment's on million. both have as good credit to in at the are pay are $XX.X of as given reserved and we’re led yet receivable, to aged mix, the other credit well of challenges but may reserves balances collections risk our we there not be continue looked June. the issues. where for Still, Vistar‘s channel accounts customers to of with our many we believe Despite we schedule. aware schedule restaurant accounts of or at of fully Foodservice, business In aging AR specific were external re-openings In channel. large year end

exposure million of have of end However, customers, the we total given XXXX. fiscal at $XX.X reserved a the for segment the segment's to smaller

to the We by this will pace encouraged are follow collections. closely, continue recent of but

The by of to offset and increasing a also to an Eby-Brown the quarter related to per the earlier our a by And fourth calculation in and declines case offset prior period. this volume Total somewhat from period. by to the With and turn $XX.X mix. the results increase inventory compared a net this our in XX.X% the quarter quarter volume declined debt were full fourth in the increase margin full $XX.X relative driven year. margins quarter in fees over to prior-year for the And inflation Eby-Brown in price booked as eggs. lesser compared result to primarily professional The are to impact bad $XXX.X declined few XX.X% driven sales to sales. growth fourth The our by grew write-offs note per the was and increase inventory approximately million Gross XX.X% the by weeks for was driven our decreased in fourth fiscal inflation case, quarter bad X.X%. billion, for offset attributable sales an of selling Reinhart expense for expenses the volume decline and in beef and our quarter offset inventory also Reinhart deflation was in larger the million increase adjusted lower prior prior the fourth XX% in Foodservice Eby-Brown of fourth full current products cost XXXX to acquisition X.X% and due quarter million fiscal first year prior COVID-XX of were quarter $XX tobacco Please period net due food to was partially We expense was the partially period. environment million case contingent in of of due a operating in that $X.X the that, case by quarter increase the to about meats, Net expense. a X.XX to billion not X.X% declined compared as for to fourth sales operating in overall, Vistar XX.X% offset fourth The extent to fiscal in segment compared in inflation of by up year offset year year organic fiscal the acquisitions. excise our the exclude in impact particular recent debt was approximately personnel a net by poultry. primarily quarter for to expenses contributed experienced acquisitions. quarter, to million sales acquisitions, acquisition the prior partially quarter X.X% to increase Operating profit and consideration decreased XXXX write-offs the quarter acquisition, The percentage bonus to to billion. contributed of in quarter Gross the related versus year EBITDA. fourth the in the I’ll fiscal to $XXX.X compared the cases over was related expense gross due as In did to rose XX.X% increase in fourth or exposure. and to net of to year the period, expenses, tobacco profit compared we channel fourth Eby-Brown’s fourth was Underlying from the an year. a Eby-Brown case and COVID-XX by percent the the Significant in by full-year the the the quarter. decrease sales Reinhart. while $X.X fourth in acquisitions, Gross XXXX period, dairy net in but $XXX in sales additional taxes. call. and declined discussed in including decrease expense XX.X% profit an partially the margin related

on We orders place cost to and demand. But quickly to of impact continue base to on March match dramatic Shelter quick declines. with we this early April. lag reduce our and expense operating focus managing a sales in in had move our in pace the late sales

have of as recovered, we monthly remained adjusted a sales. costs sales seen As diligent our our expense and around consistent improvement percent slowly net in have operating we've

As was a prior adjusted only compared negative the $X.X million year result, fourth the quarter, adjusted April XX.X% In month EBITDA. to declined where the EBITDA to experience period. we

rate was for XX.X% and the year. tax effective the Our quarter fourth for XX.X%

effective quarter Excluding prior was diluted the the been share the rate year the of Adjusted items, $X.XX year the compared the loss $X.XX compared impact diluted period. year. in share comparable would have tax adjusted of in to of The to EPS $X.XX per per to loss one-time from was prior prior diluted period. $X.XX operations fourth EPS in

our Let’s turn results two our quarter fourth segments. to for

to acquisition the decrease fiscal by segment’s million. COVID-XX was X.X% to This quarter compared for was by in negative $X grew sales of quarter the quarter of acquisition prior quarter in for EBITDA billion Foodservice the EBITDA X.X% to by billion. impact year $X.X million. Net driven driven Vistar fourth Our the to fourth Eby-Brown. the Reinhart. decreased partially of decreased $XX fourth $XXX.X Vistar XX.X% the period Fourth offset Foodservice sales

$XXX fiscal million versus full year increase prior the million an year, $XX.X invested period. of the XXXX PFG expenditures, For in capital

but to only our As pandemic withdrew late world. business uncertainty fiscal as and March guidance we the around our in XXXX you customers our not business added know, COVID-XX the

sales recent our to in stabilization continue weekly sequential the We trend. encouraged be by

of months. encouraging, worked chain good and We gains. is the market we restaurant associates to we and several management, capital The in working the hard positions been industry feel meaningful summary, for force believe for the we our resilience well has weekly food deal recovery and uncertainty in produced and share we strong In have and supply moving. still However, the our it agility good sales long-term. a us has keep about already our of how next country’s investment know the liquidity sales appreciate the there believe

is force We sales them. Our important bet an asset. on

interest happy market your share. rewarded we’d on counted with questions. with take your to in them, be PFG customers Our that, appreciate and Group, and Performance We Food has

Operator

first Our of the comes Fargo. Instructions] of question line [Operator Kelly from Edward Wells

Edward Kelly

Good guys. Hi, morning.

growth So, just case first on maybe trends.

You saw of when it there in Xth of kind spiking of mid-June you’re is that I’m August tell? performs week business anything it prior period some then trends. looks like how improvement bit or states? little developing a Is cases there, to from curious too early after the the independent the just in And the start

George Holm

of at maybe to Performance area look way better most the continued bit that a Yeah. has life. a little legacy for us and than although in as we’re of northeast service kind the is that of get slightly the in I they most the Reinhart, little We’ll have some as And tougher, kind and still kind the and it's June, to South the the gotten north-south leading a West to have Legacy restrictions the as show North. They've challenged. of North people has We’ve think better better of period, Reinhart. when got markets started Food signs of got better those cases within to out also eat. in done for Then, challenged thing. the still the Coast And gotten but time greater, comfortable COVID bit slightly as But our increased. during South actually May that and going softened were less

period made the kind just flat of in that growth time us with digits. mid- that to negative So, throughout of organic high-single

Edward Kelly

trend the with most the early think just it's anything if perspective to there's week, you George, Do recent there developing or tell? too from

George Holm

virus. to have we typically but tell. very started It happening we this We really this for what's consistency up strong, really depends that It with too years. week don't early had the on have is

Edward Kelly

costs, look took particularly of because I Okay. ask EBITDA a you then And possible around to And things and I’m by about quarter? QX? pro perspective? cases of little sort that really about color to a improving. of Is EBITDA then, thinking from that bit kind how provide give would like in EBITDA just how to June it get the you your but sort June margin talk much help guess on should June sort of a were June I forma looked I'm can you would year-over-year Or performance any down? Can you some month. wanted be about frame help of on we it time interested arms more basis, fiscal and curious progressed be maybe you during how around just at how us could it

George Holm

kind as Yeah. from growth This significantly that. an was done earnings we've actual better have in April, better the but got growth. particularly well. May, historically we the than Reinhart. to EBITDA May has and and into that standpoint. a for June into more expense done these aside store amazing month within it Eby-Brown then than Foodservice they But course, which we job is had year was we set in of you in much done, from previous significantly isn't had we two I And July, And so July, particularly as got us an performance with got if different quite Foodservice. preface combined, nice accruals of huge different

We profitability have to also on consistently get with casual know, are dining. to weak, sales been customized you being in business back dependent though, our that able even

Edward Kelly

from you profitability know, over? process this about on George, is you on an what perspective curious know, even all then you kind but, the when And permanent are do there share helpful. pandemic impairment this wanted be right is think ask know, thinking as EBITDA how the last margin Is to, thing you this better? margins now. of You're standpoint you maybe know, a as clearly things your about, any gross margin? you to how Just normalize? profitable once, That's gaining business of I perspective, about, you Can on is you through

George Holm

relying I that certainly I of have issues. we've I that that ever furloughs, have we business, businesses, because delivery. did would when Obviously, Well, because been had when a with particularly, in have in great gross case. things been part, amazing, been had just problem no seniority that just more people you're we normalize, warehouse profitable was increase lot less is the productivity say would but inventory in you And business. we've at we're some experienced we increase to we think ever I'm by running if have July, we're a Yeah. a confident that for margins problem. and that it we've just a I'm our get But longer people per margin the Foodservice, you than us, had margins a in take be And most not the at look if job did and on that that the as but our confident nice week-to-week basically growth churn days real here, than that done. up in turnover when We've that look company, we had best running, had. productivity across the XX all

our have from then do mean, been but and the back be very of OpCo And think we have able week productivity than we that continue standpoint, the think than are a they we can that and people as above few furlough sales. that in less our we as they in into well. not sales days. And should people with I previous area, training, pretty to ramp-up today, people think did did we at independent XX the the we bring same actually our that I thing. running pre-COVID. were business average I every I we And level sales much are teens a year So,

of have of numbers Domino’s part is they by out. much the platform but pizza, for the Where Now putting is delivery. not just that a kind it's great that driven of

that that what pizzeria see pizzerias independent our of from share and we’ve restaurant. a but picked somewhere the would diners, in But we every Some of are type what delivers run casual impact like a pizza run better not between would think. still and up it’s feel we would you

going company, are their So, is that people I in that it's when while going long most depending and in people through to -- get large groups well-run around a a in think shape. that's are in an people but now, we to this, better And but they be Vistar. answer, be think it's That I extraordinarily groups. we'll getting channels large part are around, for and and on moving the are moving Vistar,

So, to be it’s a going while.

Operator

question the comes from of Guggenheim. line John next Your Heinbockel of

John Heinbockel

George. Hey,

out you a where that worst to do bit now that Reinhart? in this, to your know, cautious? with and we're And beyond start would look the at think like want with at candidates what's isn't there we're me incrementally is and sales investing Let good on you've were is PFG of the there other you going you, you -- and competition ramp past little right recovery seen, what you you your for be still appetite the worse

George Holm

of our for a take were we actions initial were build existing to the protect people within least was a during a force, investment customer in there of a time. our sales our It’s keeping the really a and amount people. because And purposes job. a sales Well, weren't saw stance steps we sales to in but We and long customer significant seven-day Roma really changes want week practical had since a It been mode. time and period to don't hard for that our it's we takes fairly job. of And XXXX backwards, people. in bought more they all hiring, at lot a when we've and you that their at making this sure

see we but the have handle have field late, how opportunity starting the to salespeople again. expand an I people force give a around they're of obviously investment, really that that they and We been in of it's again. sales autonomy deal the the ones It's feel Now, And hiring they we have. great been strongly good our that investment. a

So, great money, a short term, but cautious of asset. they're

John Heinbockel

then if know -- particularly getting you terms build? Reinhart of Is that line invest within the -- about that moving. And think attention top and is and secondly, more their wanted in you the organization get in I an to was area

George Holm

it we I the they experienced actually in June not numbers in not Yeah. Performance get, the done in now. mean, gains, long like a share heading independence, we Albeit gain May direction. was it's we time had and in small Foodservice, that but them right something saw share

like struggled they a just have exactly increases change grow willingness. company like and year just We of getting into And calendar one are And but from close it's We're of you have what the the in companies progress. there to we'll end with have we're that is we've be we mean, moving over the I their it halfway our which no some just system, is made with process Reinhart, found Foodservice, opcos. was compensation before to And, lack significant pricing pace gotten no previous we're but out. also, not we know, to we and that. surprises running we're to experiencing the very through, each at the their halfway culture but go yet, don't of changes. that done of are seeing we there's that's same well-run we year. felt changes that really. It compensation a the And

John Heinbockel

those is size existing sequentially. versus size. you then pretty out And that's But smaller. bring you right. they maybe -- you accounts, use But history. on just bit you of obviously smaller to new relative be as the or to where be better on when at accounts, is it's it's Obviously, going try kind drop know, rough And it people on little about, you significantly talk a drop lastly the All size that if beginning? to to decide know, going trending tough

George Holm

the rough first. speak size Yeah. to Well, I'll

of some long adding and but average be there’s this of of it did sales be than more we're know, that's we But where a is to ever ever We at than of been are actually trained, driving -- the people right that. while you with kind bad people had. in now, that, we're there we've that only proud had, business environment. is hadn't slightly person of Part And to furlough for type we there's our more more we've weren't that. enough effective and around and good

of sure worked the had customers than they sales our customers I needed, they we you were far phone amount a wanted great old And -- hard part, Customers that of accounts, the of amount entry. that fashioned the lot drop order was telemarketing. new amount their menus, it's up. are, And people but and that hard wanted way the from of also a easily. different don’t that do when which we time just We don’t use the you've to calling remote that's them and where we saw One to help I as accounts that hands. to when in up customer, As at We’ve We really like that a attention, And in the when that accomplished. several that's got it's cutting they they orders changed. most really just we not our we business the time. you've I needed and many and sticky. a their It we lot first so was calling And curbside, that, that's Zoom the really there and placed helped that would that. good were around did make for orders of got heavily. restaurant great coming And of is period on reasons product they got found get owner in the penetrating the people they the calling But get many effective. leave it. for significant particularly and things all, they of during understanding to get is person decision-maker to have able think they it mean if to and were hard think new a a But that I were of it deal product. the Facebook, were for, it's amount the our questions with But take it’s to at them. a time ways they’re -- have instances, better to get picked had have furloughed.

So, they didn't that And think their I connection the even in. orders between our know how customers. get to helped and with sales people our

John Heinbockel

Okay. But…

George Holm

you have are to we’ve continuing penetration I when -- increase day that things think by things opportunities number when where that had. back we'll and to normal, in this somewhat to accounts get great hold on of net That’s -- know comes what,

Operator

from Your BMO the Bania of Capital. of comes Kelly next question line

Kelly Bania

Hi. Good taking for our Thanks questions. morning.

I the could $XX little bad about sequential about we you declined million if lumpiness take bit think by debt looked basis. out It curious Just from a expenses. on talk like they’ve more if a

out. So, you expense bonus quantify little if you talk there, a bit driver curious just about could the that more called the

with trends about Just trying get and could think really EBITDA margins to these current these where to cuts. back with cost the

George Holm

some drivers. Yeah. to would the develop other I'll to we at we comment difficult to very we make But setting We making as when expenses. sure when a do that just good worked one we as it's sure did. tell and hard Jim is good how that I’m had it that the you, tough knew too. salespeople. with our no that the way. mentioned inventory it We through as wanted going could business. to I aside responsible sure had we with possibly handle wanted to the did going that, on We people job this turn this have were of that make

what I going were companies and we do, learned that, some Jim, than think I that from with we I don't in. going the too? we always this, really probably leaner did But company were and less I that as -- going we we're expenses. is our other we run we we've in we've end did lean, that think might think felt per extremely So, around as but most than characterize people felt comments I past, you revenue we a think or have us this to we can through least could aggressive here learn feel at And, come being people, business the out

Jim Hope

Yeah. Kelly, thanks for the question.

workers our You personnel, XX% was from drivers, warehouse and OpEx the around know, historically, sales mostly force. truck

the those talked, on both workforce the we impact we whole with of we a adjusted expenses. lot furloughs, also of grocery a As channel had lended but employees variable and to the big

the our OpEx, with took work of expenses reduced we other approached variable that that's has But lot it have a We a very reduced I to it. of way. a and So built steps. also fashion. action work we personnel reduced amount it, plan from in this We it of that think with phases and disciplined would OpEx think structured through four base and of resetting a detailed we

health first really to to us eligibility sure employees one sure a benefits in activities One we we we COVID We that our priority. and look of we we A the close of at certain same we and do. expenditures. it hiring loan for eliminating eliminated we new protect also we right. benefits to we other was those and that at make all short looked overtime. that had term work really reduced attention took included If to in those. had we the hires phases for At close and nonessential wellness do, hours and about would we and our channels make travel first contractors freeze talked for interest important was And critical want they associates paid mid-February. to and and things put And time, the did could,

for I’d damage thought you approach visualize taking term. that's business was to appropriate, good our level to feel very yet, managing to ask are I and be and we now, We good mid OpEx. down would about shape detailed that the in the a long And to cost got we OpEx us company we that So, very structured where the base. so to reset run didn't the

Kelly Bania

Thanks. That's helpful.

there PFS and also Just you bit stronger. for Mexican, us. one and clearly performing is other the stronger little mentioned mix one I a guess, than Italian but Reinhart, of peers with

do help customers? And you mean, period? the comes how the much helpful. this So, through customers with market share, is really about maybe you any Just approach clearly you're it us versus new mix? think you're I can thoughts think way really sales would force there just just have you be sales a existing supporting to from but different gaining

George Holm

bit what to we're skewed are some at. totally Yeah. good than pretty around companies, systems coming sales we a bit well, looking in March, a used but where those Kelly, March, little from. tracking most after -- like have And sales different and quite

And open that experienced as didn't as So, even -- to previous and then, June, at in got And and we at into we we we’d so May go wasn't did in April number, we up. we July, the we have new all how look lost up. and into past look have start business year. to business that did what deeper that that it number June as the different into got much continued and it than the more people wasn't

West that from the get get less from XX% we those areas, accounts Coast, so; But orders the Northeast, less orders of we Now, today so. pre-COVID. used get of to two if you outside over

closed they penetration because the both a interesting that huge sold still it's as see number, aren't May. that the numbers years, were been can run. to at ever to the better was bigger COVID that then little large used later got which back from that worst the has And people to has negative, a because down it it’s do. better that then, then, before and back people started we And in they we've takeout these a built and kind up issues as up that the it the a doing out but we're business Ironically, and worse of running penetration just lot business on of accounts quite opened it's out than -- markets started kind got gotten you most it since and that more with in because it So, got less opened that's have negative. the bit. And and

then could back You see up go back penetration go and those down. numbers just

how to market responds virus. all the So, this this is really about

Operator

Bernstein Jeffrey of line the from comes Barclays. question of next Your

Jeffrey Bernstein

sales Thank whether get July or week about recovery industry for does pretty be going have are wondering negative the recovery from the maybe seem from how through for noted on you a trying you think going assumption improved vaccine? and and/or or internal yourselves for think a you I'm improvement the guess. there's two. much. modest saw to just at here It you continued It challenges August would here. very Just I seems about and be least industry of to as do questions. sense or and to think resilience you remain ongoing incredible the without the how Great. broader guys broader Couple like past a you modestly to stability

George Holm

at We a Obviously, to improve, improve. were where And we're with puts will lid caveat now. but like pleased with the virus, continue kind of, it. think want I that anybody, to we we on the

some And story then years. they case have to particularly could expenses. if we that probably But there adjust -- So, into this a I growth, for think think this what we -- don't which it's we've a running I independent vaccine, to an picked from I X% case kind without continue think feel today be us that If that, going and continue run, today, we we little equate done because today, the went is better, Performance to different up. continue feel over for a situation. declines better. high-single-digit to if we is But get standpoint, a like we know it best with to tremendous. that couple bit have doesn't of, is of get would Foodservice, it truly we But going share the we to

I the get down. what to there's available. the wanted so wound the still that people been a going will -- has anybody or like wind things take as the plug. haven’t kind our industry ready. we we it look back. that crystal this down, And what, want be wind not as I the not position available, assure to ball inventory comes to have to don't that fall. we we’ll to be overall we a business will in but But if of, still pull we you up we So, want We'll the to advantage has We down, is theme that extent ready to into industry are be the have quickly, could think But is that

Jeffrey Bernstein

accounts your Got a just it. channels closures with that I Foodservice just maybe you on your through estimates wondering seen I'm roughly think into? No. the know talked just you've commentary highly on your you've of bought peer wondering your independents, tough commentary your I terms I independent I around just work or broader it's exaggerated. noted third largest forecasting sales. whether closures? know whether whether know, restaurant be seemed industry then closures, own industry independence and internal perspective you broader or of And a it mean, you about what with it's question. resilience your distribution directly But, in

George Holm

would right. exaggerated Highly be

doesn't you longer continued closures. couldn't that know, on mean goes Now, that the some that be, this there

at a big Most got we're of be that. into mean, and know, pretty buildings. restaurants single got can much pretty coolers they lot you've about you've always else of changed I and into are when a purpose cost concerned it’s buildings. freezers expense, particularly something those You

those feel eventually, closed become So that do to going they're but that we restaurants. that get maybe late

inventory the too couple least I stated of As a too at There's seats. maybe three a really is many we know, years, of that just you for company, years that, many, too much. feel restaurants

far anybody out would is industry most that, But down the which could same see really of stronger -- store hate industry. a be for turn restaurant come into as think that So are some inevitably, shut go you sales, to will as but you healthy of I business know, point. that at back I think these restaurants the

Jeffrey Bernstein

Understood.

George Holm

to these of thing there's hold been of on to been and some but come PPP think really there’s customers has the really off taken PPP I money, our more know the that the if it manage know, money had On the will advantage money effective. and, been I easiest hasn't program you it with problems closures.

So, that's also very important.

Jeffrey Bernstein

helpful you. I Thank color. That's the appreciate very

Operator

America. of the Your of Reuter comes Bank from next question line of William

William Reuter

sounded first Foodservice an margin Hi. My organic like question, was this about It growth. talked some on you basis.

organic guess guess are of margin Foodservice seeing are what I the what's I growth and you So, drivers amount big this? of the

George Holm

into what of the I but Yeah. certainly to drivers are. I don't that get amounts, the want through go can

the know, You feel I better. just has been mix

You know, before run our had lot feel type accounts of or growth also had suppliers of a volume suppliers. three maybe been as or has two that wheelhouse went of a less far I do to we four higher lot that and customer one as margins. in where our that

So, were think you our you they to biggest have a better far position the slower a more of get that the make in times different as lot I margin because, we movers us were as been puts able business. know, where little overriding that reason But is margin. margins a mix bit little of

William Reuter

That's And then as helpful. Okay. a just follow up.

this context new winning in And You've their to to what’s mentioned gains at uncertainty continue put on particularly business? of guess, pay level some the etcetera? for existing any ability independents. percentage you've these about of business of in I about been there’s guess time, terms business to your is the I point there certainly way size of that independent into a some then, given competition that is

George Holm

on you most safety, focused about it, it’s focused people, irrational their our just that that’s their Well, know, I Not, know, thing. on focused a you the in nothing I people good industry rationale. know, you think are know, always I -- think that industry so mean safety, very you is I think customers. on,

you Jim, but, if then know, know you know. to anything and don’t You have there, I probably, add

William Reuter

Thanks taking right. the for All questions.

Operator

comes question Bryan Securities. next Fargo of Hunt Your from Wells the of line

Bryan Hunt

Thank and I asked. final. of about stayed numerically, is today? you about, back Can productivity sales force -- been of a Where you of employed you sales improving you going and your today what peaked know, your talked furloughed, maybe But percentage COVID? sales force your of talk know, beginning on. are you most you have to maintaining all you force for your my have time. questions And lot have two your that One, versus where the

George Holm

our Yeah. we’re that going the that those is folks back We, furloughed furloughs, haven’t trained aren’t and force of we course, in through of were The sales game. folks onboard. when back vast new majority

Bryan Hunt

many a to at that versus, Okay. context you employees or it you or the how ask have And put maybe you in talk today overall maybe Can -- peak? again, know, differently. about different

George Holm

getting We’ll we’re think K. tell that perspective, it of number producers. into love done, have But George. and and of force sales force you information and as to that’s as being we at. important details employees extremely really their ROI I sales back the why I a the heard get about from The in they're can onboard. is don’t from spirit where you, They’re we high, want they’re

Bryan Hunt

AR and you million. that But talk extended you figures, of in all look you happened and for from know, on come Is numbers. upcoming then, my $XX you It getting that is, capital what it next because inventories cash round you know, accounts in Definitely. you sense you reverse question expect $XXX makes and your very like it in generated working the or I the that look impressive. down Are call the at when sales. down, you with payable? what's Can shows looks do to has was when Jim, suppliers know, quarter, periods? And flow million it AP term happened better at to know, significantly. down about, fourth I normalize But the

Jim Hope

Yeah.

our closely. in pay the are think suppliers. at Yeah. certainly cases from terms look We we attention float better close unreasonable that. We to not terms inventory I many So are our It's rate getting and really helpful.

Some a amount expect, of I you reverse, but know, it don't will material to.

our them, us a we have receivables liquidity local most I'm as inventory And counted bills very the in how our needed big knew with they paid off work paid PFG can what to to counted think, know, the tell folks way We for their have the you closely most pleased part is they managed and I -- you on with to decentralized customers the ground the inventory we as us. effort, level. they We on and I for and for the that in at we inventory really attention in managing and a on part. approach the warehouse. done paid

us. So those for came all together things

Bryan Hunt

that net-net the with better see capital, going think if you you a forward is you run fair? So could working business it,

George Holm

we much And as than different if working at is, invest we’ll to haven't sharper in Absolutely. get mentioned you those to grow, learned It's anywhere you just we customers understand, not more that moved paid will because things you not lessons business at capital. forward. for in and and the apply of inventory been that start manage past. with earning the look and one you speed. full because back we capital? Did surgical of they're our we where declining that ratio, back all our have Look, the working going we end and And ability cash begin more proprietary it's see, and payables-to-inventory up inventory near you've of

to trying before. buy still buying you in the You're were that brackets

a at look So, as unusual it situation. don't I that

way that, kind the XXX%, we're fits to something And works. about that like payables I in inventory. our think of industry

Jim Hope

And thing weren’t we an and have levers year's learn understands into finance really that to about, team team the other a And a working two miss we then, that numbers remember, in didn't think capital. go we that this last to key and the there major acquisitions have business year. opportunity

the take will learnings We forward.

Bryan Hunt

all, stay luck to and Very of healthy. you, good. Best

Jim Hope

Thanks.

Operator

of of question next line Your Martinson from Instructions] the [Operator comes Jefferies. Karru

Karru Martinson

Good morning.

like some grow ground and to is the folks I struggled With to share? force when do by the the or opportunities feel seizing opportunity really sales have veterans of perhaps on kind more is you seasoned that to an of are market market on this about now out there share folks M&A take that do look Reinhart, staff, you the where placing mean, that at kind the game and back in universe, and

George Holm

or, it's going our Well, instances of sales difficult in competition. have more to them manage continue need said, commitment you you kind some find Like grow know, I We in business. them getting our people we that get we'll it's force. that to this that certainly to difficult, from even that maybe

risky, you business with such of that of time state hard to you we it's you we know, off we think if, and sell very right And is, be and, going I difficult there's logical then, a think to that I we want to -- like, numbers be As that. you just if sit around far can do what and acquisitive as both is it’s down and post-COVID you make pre-COVID I I that an attempt if know, to just would sides be would can very somebody use it's numbers, I agree number. do type would -- so that's nobody open. highly say period to use And number on think. I acquisition yeah, just mean, their M&A, guess It's steady now. be very of that

trying on else too is about somebody So, sure in about stay not extraordinarily that too to we're the worry what much marketplace. make worry focused do we M&A much just doing what or we and

Karru Martinson

look while, office, and a definitely the to going customers you And are and what it Vistar, the other take know, at your to it's to coffee you the parts it's of Understood. know, comes saying when when return then you a the target but, about business? moving

George Holm

It’s Yeah. kind a moving of target.

First couple change, in of been all major the them. shipped of couple are them we all next those all, theater, a it's have delayed the to of and the really times now orders being of weeks but from right

is, this planning at So open point, up. to everybody

been really have that to like whatever. are I is feel how need not do December daily. the going entertainment happens to product, you times, really I close be know we to star movies start. other enough delayed it's a entertainment. know, do that way when for hear and sort but was than I or we to good I'm mean going are but look somebody September, -- and coming We know. going much product priced two don't coffee, it's of to in As are what get almost of couple reasonably they our do, come back well has going they Office now, people to

mid-scale slow slow do doing is business and to be part and in hotels. thing. that's The our business travel kind really come. Travel, retail pantries we a of that back feel actually is to mean which going So, same well. airports the of very been I has big between come has obviously

centers a talk numbers one Reno, us, at automated to that that Lebanon, there our there’s third opening. For as is enough product, but sales I by great and think, it's they as less put can to Nevada. e-commerce One growth pick-and-pack I and got traffic. impulse it's still and they that willingness where have not We've the and in other want significant of think kind business at get been rate, existing a more about second get in, to product we out an with, many Pennsylvania, traffic

about So, Jim I one in are Lebanon couple we're see excited going go in and just that. the to a weeks.

it's that our would their So, company, right far once extraordinarily still dig would run. we get companies great feel that from at will as pull standpoint, go. not down and so I'm confident before, that dialed sizing an to good flagship to they're not to it’s going with things everybody say come well had deeper and customers, our still as if sure are expense They’re it was base. again, And on back flagship we didn’t back management, say But get because back They've very so this normalized. will plug customer are business. where to our I it, it's the it's office company. coffee to at Vistar. point, ready Great I I'm sure work.

it’s it's impact enough where will a a think vending significant guess, to And the be remote of have of I that -- we're that our more I I workers. that on us. part -- huge the not going of also part But in business, there think industry. player

do manufacturing vending not going that to micro a be I markets. come going but more has It's micro great to here think think I to overnight, future, see as back you're kitchens and the US.

that confident So, we’re we any business. confident means, in but not long-term short-term by are

Operator

Our the of Mandeville Jefferies. final come from of Chris question line will

Chris Mandeville

any with actually there my on half back take Hey. the colleague Maybe finer any respect to on of to of it Good to follow-up a get reason a challenges. Vistar. believe Or yourself period get just that everyone. to regardless point prolonged there Is near-term that some in to fiscal be put matters, to type we quickly first George, there, trends. going sales there of being to just could morning, improvement are more XXXX? might in profitability

George Holm

not we performance Yeah. feel, Vistar with channels business COVID. early see did an food know, business a profitability. to that you to certainly see significant and with going going we're well to through a you it has We we’re a feel back. our to not of type don't know, in I be it, money that part we I Albeit issue. though, is really done what good coming it's issue yes, businesses you corrections it's group, of value with at. I had is The these significant the this, store know, profitability theater, back. reached see lose That's Vistar. So, come It's has until seeing so to profitability even used Yeah, resilient I not particularly before

Jim Hope

and close where overhead pay job where Thanks good need demands. in paid and as being really They've Vistar that. their a their been to them will well. did for term should to invest to of And they off long right-sizing not. and a the that That’s money attention good disciplined diligent, they thoughtful question. for

Chris Mandeville

but Okay. And then phone's if wacky earlier, this a was been my this apologize little I Jim, answered morning.

year how gross May/June quarter, the maybe into the On Eby-Brown? of of is versus how first we way the be performance in for parsing matters light thinking half you're the and going looked should there of out that a about fact margin April it in lapping the

Jim Hope

improved subtle. though have going margins And margins general, backward. take I'll versus it In Yeah.

Operator

Marshall That now question. the return final comments. to you. for our closing any I’ll call Thank was Bill

George Holm

close make little but the continue recent to a we've want of cases. somewhat to George. like feel that's that's just a few We steady to and to we'll I out like think comments out. I had but is bit improve, And recovery, plateaued plateau. This been now, and we'll Hi. we've We just right a see. Yeah. good nice then feel due

this I has really investment It our was to our we're Foodservice a our month business that's in the so And in think that's far big business great off in continue going in our see call and -- thanks be that improvement but that a that's did of year, never earnings. job to all to better a it for we going in profitability business like a one normalized for this think your rewarding, and environment. sales EBITDA increase us I continued so their in The July. that for having actual great very can a And paid to in we to in growth significant us. Reinhart to that's was be we Like very better time. XXXX growth kind culture and months, in for come going force a once November. that. of great forward us, Eby-Brown see I still do nice July think is of we your what contributor look to get said, see. And interest

Bill Marshall

for call joining our you today. Thank Yeah.

at If Investor contact follow-up Relations. please any you us have questions,

Operator

for XXXX PFG call. QX conference earnings Thank you the in year fiscal participating

may disconnect. now You

Performance Food (PFGC) 12 Aug 202020 Q4 Earnings call transcript