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The Chefs’ Warehouse Reports Fourth Quarter 2022 Financial Results

The Chefs' Warehouse, Inc.
The Chefs' Warehouse, Inc.

RIDGEFIELD, Conn., Feb. 15, 2023 (GLOBE NEWSWIRE) -- The Chefs’ Warehouse, Inc. (NASDAQ: CHEF) (the “Company” or “Chefs’”), a premier distributor of specialty food products in the United States, the Middle East, and Canada, today reported financial results for its fourth quarter ended December 30, 2022. The fiscal quarter ended December 30, 2022 consisted of 14 weeks as compared to the fiscal quarter ended December 24, 2021, which consisted of 13 weeks.

Financial highlights for the fourth quarter of 2022:

  • Net sales increased 41.8% to $791.3 million for the fourth quarter of 2022 from $558.3 million for the fourth quarter of 2021.

  • GAAP net income was $1.2 million, or $0.03 per diluted share, for the fourth quarter of 2022 compared to $8.4 million, or $0.22 per diluted share, in the fourth quarter of 2021.

  • Adjusted net income per share1 was $0.48 for the fourth quarter of 2022 compared to $0.26 for the fourth quarter of 2021.

  • Adjusted EBITDA1 was $50.1 million for the fourth quarter of 2022 compared to $30.2 million for the fourth quarter of 2021.

ANNUNCIO PUBBLICITARIO

“Fourth quarter business activity continued the return to more normal seasonality heading into the year-end period as celebrations and event-related business continued to build upon emerging third quarter trends,” said Christopher Pappas, Chairman and Chief Executive Officer of the Company. “We are extremely proud of our team’s execution during the fourth quarter - especially their ability to overcome challenging weather across our markets in mid-to late December. Our people continued to drive the Chefs’ high-quality product and high-touch service model to our forty thousand plus customers and we are grateful to each and every one of them for contributing to a strong performance rounding out 2022.”

Fourth Quarter Fiscal 2022 Results

Net sales for the quarter ended December 30, 2022 increased 41.8% to $791.3 million from $558.3 million for the quarter ended December 24, 2021. Organic sales increased $126.6 million, or 22.7% versus the prior year quarter. Sales growth of $106.5 million, or 19.1%, resulted from acquisitions. The 14th week of the fiscal quarter ended December 30, 2022 was approximately 6.0% of quarterly sales. Organic case count increased approximately 19.1% in the Company’s specialty category with unique customers and placements increases at 18.9% and 14.5%, respectively, compared to the prior year quarter. Organic pounds sold in the Company’s center-of-the-plate category increased approximately 15.2% compared to the prior year quarter. Estimated inflation was 14.1% in the Company’s specialty categories and 0.4% in the center-of-the-plate categories compared to the prior year quarter.

Gross profit increased approximately 49.0% to $187.3 million for the fourth quarter of 2022 from $125.7 million for the fourth quarter of 2021. Gross profit margin increased approximately 116 basis points to 23.7% from 22.5%. Gross margin in the Company’s specialty category decreased 91 basis points and gross margin increased 133 basis points in the Company’s center-of-the-plate category compared to the prior year quarter.

Selling, general and administrative expenses increased by approximately 40.4% to $153.4 million for the fourth quarter of 2022 from $109.2 million for the fourth quarter of 2021. The increase was primarily due to higher costs associated with compensation and benefits, facility costs and fuel costs to support sales growth in the current quarter. As a percentage of net sales, operating expenses were 19.4% in the fourth quarter of 2022 compared to 19.6% in the fourth quarter of 2021.

Other operating expense increased by approximately $3.5 million primarily due to third-party deal costs incurred in connection with business acquisitions.

Operating income for the fourth quarter of 2022 was $29.8 million compared to $15.8 million for the fourth quarter of 2021. The increase in operating income was driven primarily by higher gross profit, partially offset by higher selling, general and administrative expenses and other operating expenses, as discussed above. As a percentage of net sales, operating income was 3.8% in the fourth quarter of 2022 as compared to operating income of 2.8% in the fourth quarter of 2021.

Total interest expense increased to $24.3 million for the fourth quarter of 2022 compared to $4.2 million for the fourth quarter of 2021. The increase was primarily due to a $14.1 million loss on debt extinguishment from the refinancing the Company’s senior convertible debt. Additionally, the Company had higher amounts of debt outstanding and increases in the variable portion of interest rates charged on its outstanding debt.

The Company’s effective tax rate for the fourth quarter of 2022 was approximately 78.6% due to the non-deductibility for tax purposes of the $14.1 million loss on debt extinguishment.

Net income for the fourth quarter of 2022 was $1.2 million, or $0.03 per diluted share, compared to net income of $8.4 million, or $0.22 per diluted share, for the fourth quarter of 2021.

Adjusted EBITDA1 was $50.1 million for the fourth quarter of 2022 compared to $30.2 million for the fourth quarter of 2021. For the fourth quarter of 2022, adjusted net income1 was $18.8 million, or $0.48 per diluted share compared to adjusted net income of $10.2 million, or $0.26 per diluted share for the fourth quarter of 2021.

Full Year 2023 Guidance

Based on current trends in the business, the Company is providing full year financial guidance as follows:

  • Estimated net sales for the full year of 2023 will be in the range of $2.85 billion to $2.95 billion;

  • Gross profit to be between $684.0 million and $708.0 million and

  • Adjusted EBITDA to be between $180.0 million and $190.0 million

Fourth Quarter 2022 Earnings Conference Call

The Company will host a conference call to discuss fourth quarter 2022 financial results today at 8:30 a.m. EST. Hosting the call will be Chris Pappas, chairman and chief executive officer, and Jim Leddy, chief financial officer. The conference call will be webcast live from the Company’s investor relations website at http://investors.chefswarehouse.com. An online archive of the webcast will be available on the Company’s investor relations website.

Forward-Looking Statements

Statements in this press release regarding the Company’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties and are based on current expectations and management estimates; actual results may differ materially. The risks and uncertainties which could impact these statements include, but are not limited to the following: our sensitivity to general economic conditions, including disposable income levels and changes in consumer discretionary spending; our ability to expand our operations in our existing markets and to penetrate new markets through acquisitions; we may not achieve the benefits expected from our acquisitions, which could adversely impact our business and operating results; we may have difficulty managing and facilitating our future growth; conditions beyond our control could materially affect the cost and/or availability of our specialty food products or center-of-the-plate products and/or interrupt our distribution network; our distribution of center-of-the-plate products, like meat, poultry and seafood, involves exposure to price volatility experienced by those products; our business is a low-margin business and our profit margins may be sensitive to inflationary and deflationary pressures; because our foodservice distribution operations are concentrated in certain culinary markets, we are susceptible to economic and other developments, including adverse weather conditions, in these areas; fuel cost volatility may have a material adverse effect on our business, financial condition or results of operations; our ability to raise capital in the future may be limited; we may be unable to obtain debt or other financing, including financing necessary to execute on our acquisition strategy, on favorable terms or at all; interest charged on our outstanding debt may be adversely affected by changes in the method of determining the Secured Overnight Financing Rate (“SOFR”); our business operations and future development could be significantly disrupted if we lose key members of our management team; and significant public health epidemics or pandemics, including COVID-19, may adversely affect our business, results of operations and financial condition. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. A more detailed description of these and other risk factors is contained in the Company’s most recent annual report on Form 10-K filed with the SEC on February 22, 2022 and other reports filed by the Company with the SEC since that date. The Company is not undertaking to update any information until required by applicable laws. Any projections of future results of operations are based on a number of assumptions, many of which are outside the Company’s control and should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. The Company may from time to time update these publicly announced projections, but it is not obligated to do so.

About The Chefs’ Warehouse

The Chefs’ Warehouse, Inc. (http://www.chefswarehouse.com) is a premier distributor of specialty food products in the United States and Canada focused on serving the specific needs of chefs who own and/or operate some of the nation’s leading menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores. The Chefs’ Warehouse, Inc. carries and distributes more than 55,000 products to more than 40,000 customer locations throughout the United States and Canada.

Contact:
Investor Relations
Jim Leddy, CFO, (718) 684-8415

1EBITDA, Adjusted EBITDA, adjusted net income (loss) and adjusted EPS are non-GAAP measures. Please see the schedules accompanying this earnings release for a reconciliation of EBITDA, Adjusted EBITDA, adjusted net income (loss) and adjusted EPS to these measures’ most directly comparable GAAP measure.


THE CHEFS’ WAREHOUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except share amounts and per share data)

 

 

Fiscal Quarter Ended

 

Fiscal Year Ended

 

December 30, 2022

 

December 24, 2021

 

December 30, 2022

 

December 24, 2021

Net sales

$

791,336

 

 

$

558,251

 

 

$

2,613,399

 

 

$

1,745,757

 

Cost of sales

 

604,005

 

 

 

432,562

 

 

 

1,994,763

 

 

 

1,355,272

 

Gross profit

 

187,331

 

 

 

125,689

 

 

 

618,636

 

 

 

390,485

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

153,391

 

 

 

109,218

 

 

 

518,219

 

 

 

379,252

 

Other operating expenses, net

 

4,175

 

 

 

630

 

 

 

14,679

 

 

 

422

 

Operating income

 

29,765

 

 

 

15,841

 

 

 

85,738

 

 

 

10,811

 

 

 

 

 

 

 

 

 

Interest expense

 

24,282

 

 

 

4,225

 

 

 

43,849

 

 

 

17,587

 

Income (loss) before income taxes

 

5,483

 

 

 

11,616

 

 

 

41,889

 

 

 

(6,776

)

 

 

 

 

 

 

 

 

Provision for income tax expense (benefit)

 

4,310

 

 

 

3,172

 

 

 

14,139

 

 

 

(1,853

)

 

 

 

 

 

 

 

 

Net income (loss)

$

1,173

 

 

$

8,444

 

 

$

27,750

 

 

$

(4,923

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

Basic

$

0.03

 

 

$

0.23

 

 

$

0.75

 

 

$

(0.13

)

Diluted

$

0.03

 

 

$

0.22

 

 

$

0.73

 

 

$

(0.13

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

37,198,345

 

 

 

36,879,240

 

 

 

37,094,220

 

 

 

36,744,304

 

Diluted

 

37,922,385

 

 

 

41,795,193

 

 

 

38,742,328

 

 

 

36,744,304

 


THE CHEFS’ WAREHOUSE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 30, 2022 AND DECEMBER 24, 2021
(in thousands)

 

 

December 30, 2022

 

December 24, 2021

 

(unaudited)

 

 

Cash and cash equivalents

$

158,800

 

 

$

115,155

 

Accounts receivable, net

 

260,167

 

 

 

172,540

 

Inventories, net

 

245,693

 

 

 

144,491

 

Prepaid expenses and other current assets

 

56,200

 

 

 

37,774

 

Total current assets

 

720,860

 

 

 

469,960

 

 

 

 

 

Equipment, leasehold improvements and software, net

 

185,728

 

 

 

133,622

 

Operating lease right-of-use assets

 

152,629

 

 

 

130,701

 

Goodwill

 

287,120

 

 

 

221,775

 

Intangible assets, net

 

155,703

 

 

 

104,743

 

Deferred taxes, net

 

 

 

 

9,380

 

Other assets

 

3,256

 

 

 

3,614

 

Total assets

$

1,505,296

 

 

$

1,073,795

 

 

 

 

 

 

 

 

 

Accounts payable

$

163,397

 

 

$

118,284

 

Accrued liabilities

 

54,325

 

 

 

35,390

 

Short-term operating lease liabilities

 

19,428

 

 

 

15,882

 

Accrued compensation

 

34,167

 

 

 

22,321

 

Current portion of long-term debt

 

12,428

 

 

 

5,141

 

Total current liabilities

 

283,745

 

 

 

197,018

 

 

 

 

 

Long-term debt, net of current portion

 

653,504

 

 

 

394,160

 

Operating lease liabilities

 

147,406

 

 

 

127,296

 

Deferred taxes, net

 

6,098

 

 

 

 

Other liabilities

 

13,034

 

 

 

5,110

 

Total liabilities

 

1,103,787

 

 

 

723,584

 

 

 

 

 

Common stock

 

386

 

 

 

380

 

Additional paid in capital

 

337,947

 

 

 

314,242

 

Cumulative foreign currency translation adjustment

 

(2,185

)

 

 

(2,022

)

Retained earnings

 

65,361

 

 

 

37,611

 

Stockholders’ equity

 

401,509

 

 

 

350,211

 

 

 

 

 

Total liabilities and stockholders’ equity

$

1,505,296

 

 

$

1,073,795

 


THE CHEFS’ WAREHOUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEAR ENDED DECEMBER 30, 2022 AND DECEMBER 24, 2021
(unaudited, in thousands)

 

 

December 30, 2022

 

December 24, 2021

Cash flows from operating activities:

 

 

 

Net income (loss)

$

27,750

 

 

$

(4,923

)

 

 

 

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

 

24,332

 

 

 

21,998

 

Amortization of intangible assets

 

13,913

 

 

 

12,967

 

Provision (benefit) for allowance for doubtful accounts

 

6,048

 

 

 

(422

)

Non-cash operating lease expense

 

1,730

 

 

 

1,402

 

Deferred income tax provision (benefit)

 

9,601

 

 

 

(1,845

)

Amortization of deferred financing fees

 

1,290

 

 

 

2,299

 

Loss on debt extinguishment

 

14,287

 

 

 

 

Stock compensation

 

13,602

 

 

 

11,479

 

Change in fair value of contingent earn-out liabilities

 

8,505

 

 

 

(1,296

)

Intangible asset impairment

 

 

 

 

597

 

Loss on asset disposal

 

17

 

 

 

193

 

Changes in assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

 

(48,229

)

 

 

(70,777

)

Inventories

 

(49,931

)

 

 

(60,799

)

Prepaid expenses and other current assets

 

(17,603

)

 

 

(2,183

)

Accounts payable, accrued liabilities and accrued compensation

 

19,163

 

 

 

71,519

 

Other liabilities

 

 

 

Other assets and liabilities

 

(1,341

)

 

 

(108

)

Net cash provided by (used in) operating activities

 

23,134

 

 

 

(19,899

)

 

 

 

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(45,848

)

 

 

(38,801

)

Cash paid for acquisitions

 

(186,175

)

 

 

(10,190

)

Net cash used in investing activities

 

(232,023

)

 

 

(48,991

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Payment of debt, finance lease and other financing obligations

 

(331,073

)

 

 

(37,610

)

Proceeds from debt issuance

 

587,500

 

 

 

51,750

 

Payment of deferred financing fees

 

(19,039

)

 

 

(1,450

)

Proceeds from exercise of stock options

 

69

 

 

 

 

Surrender of shares to pay withholding taxes

 

(2,674

)

 

 

(1,829

)

Cash paid for contingent earn-out liabilities

 

(3,788

)

 

 

(83

)

Borrowings under asset based loan facility and other revolving credit facilities

 

42,220

 

 

 

 

Payments under asset based loan facility

 

(20,000

)

 

 

(20,000

)

Net cash provided by (used in) financing activities

 

253,215

 

 

 

(9,222

)

 

 

 

 

Effect of foreign currency translation on cash and cash equivalents

 

(681

)

 

 

(14

)

 

 

 

 

Net change in cash and cash equivalents

 

43,645

 

 

 

(78,126

)

Cash and cash equivalents at beginning of period

 

115,155

 

 

 

193,281

 

Cash and cash equivalents at end of period

$

158,800

 

 

$

115,155

 


THE CHEFS’ WAREHOUSE, INC.
RECONCILIATION OF GAAP NET INCOME (LOSS) PER COMMON SHARE
(unaudited; in thousands except share amounts and per share data)

 

 

Fiscal Quarter Ended

 

Fiscal Year Ended

 

December 30, 2022

 

December 24, 2021

 

December 30, 2022

 

December 24, 2021

Numerator:

 

 

 

 

 

 

 

Net income (loss)

$

1,173

 

 

$

8,444

 

 

$

27,750

 

 

$

(4,923

)

Add effect of dilutive securities:

 

 

 

 

 

 

 

Interest on convertible notes, net of tax

 

 

 

 

673

 

 

 

580

 

 

 

 

Net income (loss) available to common shareholders

$

1,173

 

 

$

9,117

 

 

$

28,330

 

 

$

(4,923

)

Denominator:

 

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

37,198,345

 

 

 

36,879,240

 

 

 

37,094,220

 

 

 

36,744,304

 

Dilutive effect of unvested common shares

 

654,441

 

 

 

341,965

 

 

 

638,293

 

 

 

 

Dilutive effect of options and warrants

 

69,599

 

 

 

49,008

 

 

 

66,719

 

 

 

 

Dilutive effect of convertible notes

 

 

 

 

4,524,980

 

 

 

943,096

 

 

 

 

Weighted average diluted common shares outstanding

 

37,922,385

 

 

 

41,795,193

 

 

 

38,742,328

 

 

 

36,744,304

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

Basic

$

0.03

 

 

$

0.23

 

 

$

0.75

 

 

$

(0.13

)

Diluted

$

0.03

 

 

$

0.22

 

 

$

0.73

 

 

$

(0.13

)


THE CHEFS’ WAREHOUSE, INC.
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA TO NET INCOME (LOSS)
(unaudited; in thousands)

 

 

Fiscal Quarter Ended

 

Fiscal Year Ended

 

December 30, 2022

 

December 24, 2021

 

December 30, 2022

 

December 24, 2021

Net income (loss)

$

1,173

 

 

$

8,444

 

 

$

27,750

 

 

$

(4,923

)

Interest expense

 

24,282

 

 

 

4,225

 

 

 

43,849

 

 

 

17,587

 

Depreciation

 

6,665

 

 

 

5,728

 

 

 

24,332

 

 

 

21,998

 

Amortization

 

3,624

 

 

 

3,189

 

 

 

13,913

 

 

 

12,967

 

Provision for income tax expense (benefit)

 

4,310

 

 

 

3,172

 

 

 

14,139

 

 

 

(1,853

)

EBITDA (1)

 

40,054

 

 

 

24,758

 

 

 

123,983

 

 

 

45,776

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

Stock compensation (2)

 

4,521

 

 

 

3,031

 

 

 

13,602

 

 

 

11,479

 

Other operating expenses, net (3)

 

4,175

 

 

 

630

 

 

 

14,679

 

 

 

422

 

Duplicate rent (4)

 

1,327

 

 

 

1,749

 

 

 

5,604

 

 

 

4,073

 

Payroll tax credit (5)

 

 

 

 

 

 

 

 

 

 

(1,418

)

Moving expenses (6)

 

 

 

 

75

 

 

 

 

 

 

965

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (1)

$

50,077

 

 

$

30,243

 

 

$

157,868

 

 

$

61,297

 

  1. We are presenting EBITDA and Adjusted EBITDA, which are not measurements determined in accordance with the U.S. generally accepted accounting principles, or GAAP, because we believe these measures provide additional metrics to evaluate our operations and which we believe, when considered with both our GAAP results and the reconciliation to net income, provide a more complete understanding of our business than could be obtained absent this disclosure. We use EBITDA and Adjusted EBITDA, together with financial measures prepared in accordance with GAAP, such as revenue and cash flows from operations, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. The use of EBITDA and Adjusted EBITDA as performance measures permits a comparative assessment of our operating performance relative to our performance based upon GAAP results while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies.

  2. Represents non-cash stock compensation expense associated with awards of restricted shares of our common stock and stock options to our key employees and our independent directors.

  3. Represents non-cash changes in the fair value of contingent earn-out liabilities related to our acquisitions, non-cash charges related to asset disposals, certain third-party deal costs incurred in connection with our acquisitions or financing arrangements and certain other costs.

  4. Represents duplicate rent and occupancy costs for our Los Angeles, CA, Richmond, CA, Miami, FL and Portland, OR facilities.

  5. Represents a payroll tax credit earned in accordance with the Employee Retention Credit under the CARES Act.

  6. Represents moving expenses for the consolidation of certain facilities in New England.


THE CHEFS’ WAREHOUSE, INC.
RECONCILIATION OF ADJUSTED NET INCOME (LOSS) TO NET INCOME (LOSS)
(unaudited; in thousands except share amounts and per share data)

 

 

Fiscal Quarter Ended

 

Fiscal Year Ended

 

December 30, 2022

 

December 24, 2021

 

December 30, 2022

 

December 24, 2021

Net income (loss)

$

1,173

 

 

$

8,444

 

 

$

27,750

 

 

$

(4,923

)

 

 

 

 

 

 

 

 

Adjustments to reconcile net income (loss) to adjusted net income (loss) (1):

 

 

 

 

 

 

 

Other operating expenses, net (2)

 

4,175

 

 

 

630

 

 

 

14,679

 

 

 

422

 

Duplicate rent (3)

 

1,327

 

 

 

1,749

 

 

 

5,604

 

 

 

4,073

 

Moving expenses (4)

 

 

 

 

75

 

 

 

 

 

 

965

 

Debt modification and extinguishment expenses (5)

 

14,145

 

 

 

 

 

 

18,854

 

 

 

 

Payroll tax credit (6)

 

 

 

 

 

 

 

 

 

 

(1,418

)

Tax effect of adjustments (7)

 

(2,014

)

 

 

(687

)

 

 

(7,526

)

 

 

(1,132

)

 

 

 

 

 

 

 

 

Total adjustments

 

17,633

 

 

 

1,767

 

 

 

31,611

 

 

 

2,910

 

 

 

 

 

 

 

 

 

Adjusted net income (loss)

$

18,806

 

 

$

10,211

 

 

$

59,361

 

 

$

(2,013

)

 

 

 

 

 

 

 

 

Diluted adjusted net income (loss) per common share

$

0.48

 

 

$

0.26

 

 

$

1.54

 

 

$

(0.05

)

 

 

 

 

 

 

 

 

Diluted shares outstanding - adjusted

 

40,094,828

 

 

 

41,795,193

 

 

 

39,044,007

 

 

 

36,744,304

 

  1. We are presenting adjusted net income and adjusted net income per share, which are not measurements determined in accordance with U.S. generally accepted accounting principles, or GAAP, because we believe these measures provide additional metrics to evaluate our operations and which we believe, when considered with both our GAAP results and the reconciliation to net income available to common stockholders, provide a more complete understanding of our business than could be obtained absent this disclosure. We use adjusted net income available to common stockholders and adjusted net income per share, together with financial measures prepared in accordance with GAAP, such as revenue and cash flows from operations, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. The use of adjusted net income available to common stockholders and adjusted net income per share as performance measures permits a comparative assessment of our operating performance relative to our performance based upon our GAAP results while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies.

  2. Represents non-cash changes in the fair value of contingent earn-out liabilities related to our acquisitions, non-cash charges related to asset disposals, certain third-party deal costs incurred in connection with our acquisitions or financing arrangements and certain other costs.

  3. Represents duplicate rent and occupancy costs for our Los Angeles, CA, Richmond, CA, Miami, FL and Portland, OR facilities.

  4. Represents moving expenses for the consolidation of certain facilities in New England.

  5. Represents interest expenses incurred in connection with third party fees and the loss on debt extinguishment from the refinancing of our senior convertible debt and the write-off of certain deferred financing fees in connection with amendments made to our term loan and asset-based loan facility.

  6. Represents a payroll tax credit earned in accordance with the Employee Retention Credit under the CARES Act.

  7. Represents the tax effect of items 2 through 6 above.


THE CHEFS’ WAREHOUSE, INC.
RECONCILIATION OF ADJUSTED NET INCOME (LOSS) PER SHARE
(unaudited; in thousands except share amounts and per share data)

 

 

Fiscal Quarter Ended

 

Fiscal Year Ended

 

December 30, 2022

 

December 24, 2021

 

December 30, 2022

 

December 24, 2021

Numerator:

 

 

 

 

 

 

 

Adjusted net income (loss)

$

18,806

 

 

$

10,211

 

 

$

59,361

 

 

$

(2,013

)

Add effect of dilutive securities:

 

 

 

 

 

 

 

Interest on convertible notes, net of tax

 

425

 

 

 

673

 

 

 

812

 

 

 

 

Adjusted net income (loss) available to common shareholders

$

19,231

 

 

$

10,884

 

 

$

60,173

 

 

$

(2,013

)

Denominator:

 

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

37,198,345

 

 

 

36,879,240

 

 

 

37,094,220

 

 

 

36,744,304

 

Dilutive effect of unvested common shares

 

654,441

 

 

 

341,965

 

 

 

638,293

 

 

 

 

Dilutive effect of options and warrants

 

69,599

 

 

 

49,008

 

 

 

66,719

 

 

 

 

Dilutive effect of convertible notes

 

2,172,443

 

 

 

4,524,980

 

 

 

1,244,775

 

 

 

 

Weighted average diluted common shares outstanding

 

40,094,828

 

 

 

41,795,193

 

 

 

39,044,007

 

 

 

36,744,304

 

 

 

 

 

 

 

 

 

Adjusted net income (loss) per share:

 

 

 

 

 

 

 

Diluted

$

0.48

 

 

$

0.26

 

 

$

1.54

 

 

$

(0.05

)


THE CHEFS’ WAREHOUSE, INC.
RECONCILIATION OF ADJUSTED EBITDA GUIDANCE FOR FISCAL 2023
(unaudited; in thousands)

 

 

Low-End Guidance

 

High-End Guidance

Net Income:

$

55,800

 

 

$

61,000

 

Provision for income tax expense

 

20,700

 

 

 

22,500

 

Depreciation & amortization

 

42,000

 

 

 

45,000

 

Interest expense

 

38,000

 

 

 

38,000

 

EBITDA (1)

 

156,500

 

 

 

166,500

 

 

 

 

 

Adjustments:

 

 

 

Stock compensation (2)

 

17,000

 

 

 

17,000

 

Duplicate rent (3)

 

5,000

 

 

 

5,000

 

Other operating expenses (4)

 

1,500

 

 

 

1,500

 

Adjusted EBITDA (1)

$

180,000

 

 

$

190,000

 

  1. We are presenting estimated EBITDA and Adjusted EBITDA, which are not measurements determined in accordance with the U.S. generally accepted accounting principles, or GAAP, because we believe these measures provide additional metrics to evaluate our currently estimated results  and which we believe, when considered with both our estimated GAAP results and the reconciliation to our estimated net income, provide a more complete understanding of our business than could be obtained absent this disclosure. We use EBITDA and Adjusted EBITDA, together with financial measures prepared in accordance with GAAP, such as revenue and cash flows from operations, to assess our historical and prospective operating performance and to enhance our understanding of our performance relative to our performance based upon GAAP results while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies.

  2. Represents non-cash stock compensation expense associated with awards of restricted shares of our common stock and stock options to our key employees and our independent directors.

  3. Represents rent and occupancy costs expected to be incurred in connection with our facility consolidations while we are unable to use those facilities.

  4. Represents non-cash changes in the fair value of contingent earn-out liabilities related to our acquisitions, non-cash charges related to asset disposals and certain third-party deal costs incurred in connection with our acquisitions or financing arrangements.