Delaware
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20-3031526
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.01
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CHEF
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Nasdaq
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Class
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Outstanding at February 21, 2020
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Common Stock, $.01 par value per share
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30,307,661 shares
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Document
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Parts Into Which Incorporated
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Proxy Statement for the Annual Meeting of Stockholders
expected to be held on May 15, 2020 (“Proxy Statement”) |
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Part III
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Description
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Page
Number
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Part I
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Part II
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Part III
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Part IV
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•
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our success depends to a significant extent upon general economic conditions, including disposable income levels and changes in consumer discretionary spending;
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•
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a significant portion of our future growth is dependent upon our ability to expand our operations in our existing markets and to penetrate new markets through acquisitions;
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•
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we may not achieve the benefits expected from our acquisitions, which could adversely impact our business and operating results;
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•
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we may have difficulty managing and facilitating our future growth;
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•
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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;
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•
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our increased distribution of center-of-the-plate products, like meat, poultry and seafood, involves increased exposure to price volatility experienced by those products;
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•
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our business is a low-margin business and our profit margins may be sensitive to inflationary and deflationary pressures;
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•
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group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations;
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•
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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;
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•
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damage to our reputation or lack of acceptance of our specialty food products, center-of-the-plate products and/or the brands we carry in existing and new markets could materially and adversely impact our business, financial condition or results of operations;
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•
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our customers are generally not obligated to continue purchasing products from us;
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•
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we have experienced losses due to our inability to collect accounts receivable in the past and could experience increases in such losses in the future if our customers are unable to pay their debts to us in a timely manner or at all;
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•
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product liability claims could have a material adverse effect on our business, financial condition or results of operations;
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•
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fuel cost volatility may have a material adverse effect on our business, financial condition or results of operations;
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•
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new information or attitudes regarding diet and health or adverse opinions about the health effects of the products we distribute could result in changes in consumer eating habits, which could have a material adverse effect on our business, financial condition or results of operations;
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•
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we have significant competition from a variety of sources, and we may not be able to compete successfully;
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•
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our substantial indebtedness may limit our ability to invest in the ongoing needs of our business;
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•
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our ability to raise capital in the future may be limited;
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•
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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;
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•
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information technology system failures or breaches of our network security could interrupt our operations and adversely affect our business;
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•
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our investments in information technology may not produce the benefits that we anticipate;
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•
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we may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business;
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•
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our business operations and future development could be significantly disrupted if we lose key members of our management team;
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•
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our insurance policies may not provide adequate levels of coverage against all claims, and fluctuating insurance requirements and costs could negatively impact our profitability. In addition, if we fail to establish proper reserves and adequately estimate future expenses, the costs associated with our self-insured group medical, workers’ compensation liability and auto liability plans may adversely affect our business, financial condition or results of operations;
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•
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increases in our labor costs, including as a result of labor shortages, the unionization of some of our associates, the price or unavailability of insurance and changes in government regulation, could slow our growth or harm our business;
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•
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we are subject to significant governmental regulation and failure to comply could subject us to enforcement actions, recalls or other penalties, which could have a material adverse effect on our business, financial condition or results of operations;
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•
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federal, state, provincial and local tax rules in the United States and Canada may adversely impact our business, financial condition or results of operations;
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•
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the price of our common stock may be volatile and our stockholders could lose all or a part of their investment;
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•
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concentration of ownership among our existing executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions;
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•
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if securities analysts or industry analysts downgrade our stock, publish negative research or reports or do not publish reports about our business, our stock price and trading volume could decline;
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•
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we do not intend to pay dividends for the foreseeable future and our stock may not appreciate in value;
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•
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our issuance of preferred stock or debt securities could adversely affect holders of our common stock and discourage a takeover; and
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•
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some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.
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Market Name
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Geographies Served
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Year Entered
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New York
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Boston to Atlantic City
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1985
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Washington, D.C.
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Philadelphia to Richmond
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1999
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Los Angeles
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Santa Barbara to San Diego
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2005
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San Francisco
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Napa Valley to Monterey Bay
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2005
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Las Vegas
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Las Vegas
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2005
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Miami
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Miami
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2010
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Portland
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Bend, OR to Seattle, WA
|
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2011
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Columbus
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Midwest
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2012
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Cincinnati
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Dayton, OH to Lexington, KY
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2013
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Chicago
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Chicago
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2013
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Vancouver
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Vancouver and Western Canada
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2013
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Edmonton
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Edmonton and Calgary
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2013
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Toronto
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Toronto
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2013
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Seattle
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Seattle
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2013
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Sacramento
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Sacramento
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2015
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Texas
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Texas
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2018
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•
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Outside Sales Associates: Responsible for identifying sales opportunities, educating customers and acting as our public representatives.
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•
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Inside Sales Associates: Responsible for processing customer orders and arranging for delivery and payment.
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•
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Product Specialists: Responsible for maintaining specialized product knowledge and educating our outside sales associates and customers regarding new products and general developments in several specific categories, including protein, seafood, pastry and cheese.
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Name & Position
|
|
Age
|
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Business Experience
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Christopher Pappas
President, Chief Executive Officer and Chairman of the Board of Directors |
|
60
|
|
Christopher Pappas is our founder and has served as our chief executive officer since 1985 and has been our chairman since March 1, 2011. He has been our president since April 11, 2009 and before that was our president from our formation to January 1, 2007. Prior to founding our company, Mr. Pappas played basketball professionally in Europe for several years following his graduation from Adelphi University in 1981 with a Bachelor of Arts degree in Business Administration. Mr. Pappas currently oversees all of our business activities, with a focus on product procurement, sales, marketing and strategy development. Mr. Pappas's qualifications to serve on our board of directors include his extensive knowledge of our company and the specialty food products distribution business and his years of leadership at the Company.
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John Pappas
Vice Chairman and Director |
|
56
|
|
John Pappas is a founder of our company and currently serves as our vice chairman, a position he has held since March 1, 2011. From our founding in 1985 to March 1, 2011, he served as our chief operating officer. He has 25 years of experience in logistics, facility management and global procurement and oversees our network of distribution centers nationwide. Mr. Pappas is also active in the development of our corporate strategy. Mr. Pappas's qualifications to serve on our board of directors include his extensive knowledge of our company and the specialty food products distribution industry and his years of leadership at the Company.
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James Leddy
Chief Financial Officer |
|
56
|
|
James“Jim” Leddy is our chief financial officer and assistant secretary, positions he has held since his appointment as of November 11, 2017. Prior to his appointment, Mr. Leddy served as our executive vice president of finance since joining the Company in September 2017. Mr. Leddy previously served as interim Chief Financial Officer at JetBlue Airways from November 2016 to February 2017 and served as Senior Vice President and Treasurer from 2012 to November 2016. Prior to joining JetBlue, Mr. Leddy served as Senior Vice President, Treasury and Cash Management at NBCUniversal from 2008 until 2012, and as a Senior Technical Advisor at General Electric from 2003 until 2008. Previously, Mr. Leddy held corporate risk and treasury management positions at First Union National Bank and Dai-ichi Kangyo Bank. Mr. Leddy holds an M.B.A. in Finance and Management of Technology from the University of Connecticut and a B.A. in Economics from Fordham University.
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Alexandros Aldous
General Counsel, Corporate Secretary & Chief Government Relations Officer |
|
39
|
|
Alexandros Aldous is our General Counsel, Corporate Secretary & Chief Government Relations Officer, positions he has held since joining us in March 2011, our IPO on July 27, 2011, and March 8, 2017, respectively. Mr. Aldous's prior work experience includes working as an attorney with Barclays Capital, the investment banking division of Barclays Bank PLC, in London, where he focused primarily on mergers and acquisitions and capital markets, and prior to that, working as an attorney with Shearman & Sterling LLP, in New York, where he focused primarily on mergers and acquisitions. Mr. Aldous is a member of the Government Relations Leadership Committee of the International Foodservice Distributors Association, a member of the Global Alumni Advisory Board of the American College of Greece, as well as a member of the Dean's Counsel of American University's School of International Service. Mr. Aldous earned a B.A. in Classics and Government from Colby College, a Juris Doctor and M.A. from American University and an LL.M. from the London School of Economics and Political Science. Mr. Aldous is licensed to practice law in the State of New York, District of Columbia, and England and Wales.
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Timothy McCauley
Chief Accounting Officer |
|
55
|
|
Timothy McCauley has served as our chief accounting officer, since his appointment on February 16, 2018 and previously served as our controller since joining the Company in May 2015. Mr. McCauley has over 30 years of experience in accounting and finance roles across a variety of industries. Mr. McCauley’s prior work experience includes serving as Vice President – Finance at MacDermid Inc., Corporate Controller at Northern Tier Energy LP, Director of Financial Reporting and Investor Relations at Presstek, Inc. and Finance Director at Eastman Kodak Company. Prior to joining Eastman Kodak Company, Mr. McCauley worked with PricewaterhouseCoopers for eleven years in their assurance and business advisory practice. Mr. McCauley holds a Bachelor of Science degree in Business - Accounting from the University of Connecticut and is a registered certified public accountant in the state of Connecticut.
|
Patricia Lecouras
Chief Human Resources Officer |
|
64
|
|
Patricia Lecouras is our Chief Human Resources Officer. Ms. Lecouras was promoted to Chief Human Resources Officer on March 8, 2013. Ms. Lecouras joined our company from GE Capital Commercial Finance where she was vice president, human resources from 2001 to 2007. Prior to her time with GE Capital Commercial Finance, Ms. Lecouras was with Nine West Shoes (f/k/a Fischer Camuto Corporation) and Xerox. Ms. Lecouras's professional experience is multi-disciplinary and includes prior experience working in finance and tax-related functions. She also has earned a six sigma master black belt certification. Ms. Lecouras holds a Bachelor of Arts degree in Psychology and Social Work from Skidmore College.
|
•
|
maintaining the existing customer and supplier base and personnel;
|
•
|
optimizing delivery routes;
|
•
|
coordinating administrative, distribution and finance functions; and
|
•
|
integrating management information systems and personnel.
|
•
|
requires us to utilize a substantial portion of our cash flows from operations to make payments on our indebtedness, reducing the availability of our cash flows to fund working capital, capital expenditures, development activity and other general corporate purposes;
|
•
|
increases our vulnerability to adverse general economic or industry conditions;
|
•
|
limits our flexibility in planning for, or reacting to, changes in our business or the industries in which we operate;
|
•
|
makes us more vulnerable to increases in interest rates, as borrowings under our Term Loan and ABL (together the “Credit Facilities”) are at variable rates;
|
•
|
in the case of our convertible debt, could result in the issuance of additional shares of our common stock that would result in the dilution of our then-existing stockholders;
|
•
|
limits our ability to obtain additional financing in the future for working capital or other purposes, including to finance acquisitions; and
|
•
|
places us at a competitive disadvantage compared to our competitors that have less indebtedness.
|
•
|
the products we distribute in the United States are subject to regulation and inspection by the FDA and the USDA, and the products we distribute in Canada are subject to regulation by Health Canada and the Canadian Food Inspection Agency;
|
•
|
our warehouse, distribution facilities, repackaging activities and other operations also are subject to regulation and inspection, as applicable, by the FDA, the USDA, Health Canada, the Canadian Food Inspection Agency and state and provincial health authorities; and
|
•
|
our U.S. and Canadian trucking operations are subject to regulation by, as applicable, the U.S. Department of Transportation, the U.S. Federal Highway Administration, Transport Canada, the Surface Transportation Board and provincial transportation authorities.
|
•
|
our quarterly or annual earnings or those of other companies in our industry;
|
•
|
changes in laws or regulations, or new interpretations or applications of laws and regulations, that are applicable to our business;
|
•
|
the public’s reaction to our press releases, our other public announcements and our filings with the SEC;
|
•
|
changes in accounting standards, policies, guidance, interpretations or principles;
|
•
|
additions or departures of our senior management personnel;
|
•
|
sales of common stock by our directors and executive officers;
|
•
|
adverse market reaction to any indebtedness we may incur or securities we may issue in the future;
|
•
|
actions by stockholders;
|
•
|
the level and quality of research analyst coverage for our common stock, changes in financial estimates or investment recommendations by securities analysts following our business or failure to meet such estimates;
|
•
|
the financial disclosure we may provide to the public, any changes in such disclosure or our failure to meet projections included in our public disclosure;
|
•
|
various market factors or perceived market factors, including rumors, whether or not correct, involving us, our customers, our distributors or suppliers or our competitors;
|
•
|
introductions of new products or new pricing policies by us or by our competitors;
|
•
|
acquisitions or strategic alliances by us or our competitors;
|
•
|
short sales, hedging and other derivative transactions in our common stock;
|
•
|
the operating and stock price performance of other companies that investors may deem comparable to us; and
|
•
|
other events or factors, including changes in general conditions in the United States and global economies or financial markets (including those resulting from acts of God, war, incidents of terrorism or responses to such events).
|
•
|
authorizing the issuance of “blank check” preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval;
|
•
|
prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders;
|
•
|
eliminating the ability of stockholders to call a special meeting of stockholders; and
|
•
|
establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings.
|
State / Province
|
|
Number of Facilities
|
|
Aggregate Size
|
||
California
|
|
10
|
|
|
618,900
|
|
New York
|
|
1
|
|
|
231,100
|
|
Texas
|
|
3
|
|
|
214,300
|
|
Illinois
|
|
3
|
|
|
144,200
|
|
Ohio
|
|
2
|
|
|
120,400
|
|
Maryland
|
|
3
|
|
|
115,300
|
|
Nevada
|
|
1
|
|
|
74,000
|
|
Oregon
|
|
1
|
|
|
55,500
|
|
Ontario
|
|
1
|
|
|
51,300
|
|
Florida
|
|
2
|
|
|
48,300
|
|
New Jersey
|
|
1
|
|
|
38,400
|
|
Connecticut(2)
|
|
1
|
|
|
29,200
|
|
British Columbia
|
|
1
|
|
|
24,900
|
|
Alberta
|
|
2
|
|
|
16,500
|
|
Arizona
|
|
1
|
|
|
14,500
|
|
Washington
|
|
1
|
|
|
10,500
|
|
Total
|
|
34
|
|
|
1,807,300
|
|
(1)
|
Excludes the impact of our recent acquisitions of Sid Wainer & Son and Cambridge Packing Co, Inc. more fully described in “Management’s Discussion and Financial Condition and Results of Operations—Overview and Recent Developments.”
|
(2)
|
Represents our corporate headquarters in Ridgefield, Connecticut.
|
|
|
December 26, 2014
|
|
December 25, 2015
|
|
December 30, 2016
|
|
December 29, 2017
|
|
December 28, 2018
|
|
December 27, 2019
|
||||||||||||
The Chefs’ Warehouse, Inc.
|
|
$
|
100.00
|
|
|
$
|
78.85
|
|
|
$
|
73.31
|
|
|
$
|
93.05
|
|
|
$
|
142.22
|
|
|
$
|
172.36
|
|
NASDAQ Composite Index
|
|
$
|
100.00
|
|
|
$
|
105.03
|
|
|
$
|
113.01
|
|
|
$
|
143.62
|
|
|
$
|
136.98
|
|
|
$
|
187.37
|
|
S&P Smallcap Food Distributor Index
|
|
$
|
100.00
|
|
|
$
|
68.23
|
|
|
$
|
107.24
|
|
|
$
|
73.85
|
|
|
$
|
46.90
|
|
|
$
|
43.92
|
|
|
|
Total Number
of Shares
Repurchased(1)
|
|
Average
Price
Paid Per Share
|
|
Total
Number of Shares
Purchased as Part
of Publicly
Announced Plans
or Programs
|
|
Maximum
Number (or
Approximate
Dollar Value) of
Shares That May
Yet Be Purchased
Under the Plans
or Programs
|
|||||
September 28, 2019 to October 25, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
October 26, 2019 to November 22, 2019
|
|
594
|
|
|
35.02
|
|
|
—
|
|
|
—
|
|
|
November 23, 2019 to December 27, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
594
|
|
|
$
|
35.02
|
|
|
—
|
|
|
—
|
|
(1)
|
During the thirteen weeks ended December 27, 2019, we withheld 594 shares of our common stock to satisfy tax withholding requirements upon the vesting of restricted shares of our common stock awarded to certain of our officers and key employees.
|
|
|
For the Fiscal Years Ended
|
||||||||||||||||||
Statement of Operations Data:
|
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
|
December 30, 2016
|
|
December 25, 2015
|
||||||||||
Net sales
|
|
$
|
1,591,834
|
|
|
$
|
1,444,609
|
|
|
$
|
1,301,520
|
|
|
$
|
1,192,866
|
|
|
$
|
1,046,878
|
|
Cost of sales
|
|
1,185,481
|
|
|
1,077,562
|
|
|
972,142
|
|
|
891,649
|
|
|
778,167
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit
|
|
406,353
|
|
|
367,047
|
|
|
329,378
|
|
|
301,217
|
|
|
268,711
|
|
|||||
Operating expenses (1)
|
|
355,585
|
|
|
318,289
|
|
|
288,251
|
|
|
253,978
|
|
|
228,311
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income
|
|
50,768
|
|
|
48,758
|
|
|
41,127
|
|
|
47,239
|
|
|
40,400
|
|
|||||
Interest and other expense (2)
|
|
18,365
|
|
|
20,914
|
|
|
22,719
|
|
|
41,563
|
|
|
12,689
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes
|
|
32,403
|
|
|
27,844
|
|
|
18,408
|
|
|
5,676
|
|
|
27,711
|
|
|||||
Provision for income taxes (3)
|
|
8,210
|
|
|
7,442
|
|
|
4,042
|
|
|
2,653
|
|
|
11,502
|
|
|||||
Net income
|
|
$
|
24,193
|
|
|
$
|
20,402
|
|
|
$
|
14,366
|
|
|
$
|
3,023
|
|
|
$
|
16,209
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic net income per share
|
|
$
|
0.82
|
|
|
$
|
0.71
|
|
|
$
|
0.55
|
|
|
$
|
0.12
|
|
|
$
|
0.63
|
|
Diluted net income per share
|
|
$
|
0.81
|
|
|
$
|
0.70
|
|
|
$
|
0.54
|
|
|
$
|
0.12
|
|
|
$
|
0.63
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
29,532
|
|
|
28,703
|
|
|
26,118
|
|
|
25,919
|
|
|
25,532
|
|
|||||
Diluted
|
|
30,073
|
|
|
29,679
|
|
|
27,425
|
|
|
26,030
|
|
|
26,509
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data (at end of period)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
$
|
140,233
|
|
|
$
|
42,410
|
|
|
$
|
41,504
|
|
|
$
|
32,862
|
|
|
$
|
2,454
|
|
Working capital(4, 5)
|
|
$
|
303,005
|
|
|
$
|
203,193
|
|
|
$
|
188,567
|
|
|
$
|
157,117
|
|
|
$
|
125,371
|
|
Total assets(4)
|
|
$
|
1,013,679
|
|
|
$
|
732,398
|
|
|
$
|
687,749
|
|
|
$
|
633,538
|
|
|
$
|
579,803
|
|
Long-term debt, net of current portion
|
|
$
|
386,106
|
|
|
$
|
278,169
|
|
|
$
|
313,995
|
|
|
$
|
317,725
|
|
|
$
|
267,349
|
|
Total liabilities (4)
|
|
$
|
677,746
|
|
|
$
|
423,722
|
|
|
$
|
439,148
|
|
|
$
|
439,778
|
|
|
$
|
391,839
|
|
Total stockholders’ equity
|
|
$
|
335,933
|
|
|
$
|
308,676
|
|
|
$
|
248,601
|
|
|
$
|
193,760
|
|
|
$
|
187,964
|
|
(1)
|
Fiscal year 2016 includes income of $8,347 related to the revaluation of the Del Monte earn-out liabilities.
|
(2)
|
Fiscal year 2016 includes the impact of our debt restructuring resulting in a loss on extinguishment of debt of $22,310.
|
(3)
|
Fiscal year 2017 includes a tax benefit of $3,573 related to the enactment of H.R. 1, originally known as the Tax Cuts and Jobs Act (the “Tax Act”). Among other changes to the U.S. Internal Revenue Code, the Tax Act reduced the U.S. federal corporate top tax rate from 35.0% to 21.0%.
|
(4)
|
Fiscal year 2019 includes the impact of recognizing operating lease right-of-use assets and liabilities as a result of our adoption of Accounting Standards Codification Topic 842, “Leases,” as of December 29, 2018.
|
(5)
|
We define working capital as current assets less current liabilities.
|
•
|
$123.9 million in cash, which was funded with cash-on-hand, borrowings under the revolving credit facility portion of our senior secured credit facilities and the issuance of $25.0 million of additional senior secured notes that bore interest at 5.80% per annum due on October 17, 2020;
|
•
|
approximately 1.1 million shares of our common stock (valued at $22.17 per share);
|
•
|
$36.8 million in convertible subordinated notes issued to certain entities affiliated with Del Monte with a six-year maturity, that bore interest at 2.50% with a conversion price of $29.70 per share; and
|
•
|
$1.3 million offset received as an adjustment to the purchase price.
|
•
|
sales and service territory expansion;
|
•
|
operational excellence and high customer service levels;
|
•
|
expanded purchasing programs and improved buying power;
|
•
|
product innovation and new product category introduction;
|
•
|
operational efficiencies through system enhancements; and
|
•
|
operating expense reduction through the centralization of general and administrative functions.
|
•
|
Net sales growth. Our net sales growth is driven principally by changes in volume and, to a lesser degree, changes in price related to the impact of inflation in commodity prices and product mix. In particular, product cost inflation and
|
•
|
Gross profit and gross profit margin. Our gross profit and gross profit as a percentage of net sales, or gross profit margin, are driven principally by changes in volume and fluctuations in food and commodity prices and our ability to pass on any price increases to our customers in an inflationary environment and maintain or increase gross profit margin when our costs decline. Our gross profit margin is also a function of the product mix of our net sales in any period. Given our wide selection of product categories, as well as the continuous introduction of new products, we can experience shifts in product sales mix that have an impact on net sales and gross profit margins. This mix shift is most significantly impacted by the introduction of new categories of products in markets that we have more recently entered, impact of product mix from acquisitions, as well as the continued growth in item penetration on higher velocity items such as dairy products.
|
•
|
Net sales. Net sales consist primarily of sales of specialty products, center-of-the-plate proteins and other food products to independently-owned restaurants and other high-end foodservice customers, which we report net of certain group discounts and customer sales incentives. Net sales also include sales by our Allen Brothers subsidiary that are direct-to-consumers.
|
•
|
Cost of sales. Cost of sales include the net purchase price paid for products sold, plus the cost of transportation necessary to bring the product to our distribution facilities. Our cost of sales may not be comparable to other similar companies within our industry.
|
•
|
Operating expenses. Our operating expenses include warehousing, protein processing and distribution expenses (which include salaries and wages, employee benefits, facility and distribution fleet rental costs and other expenses related to warehousing, processing and delivery) and selling, general and administrative expenses (which include selling, insurance, administrative, wage and benefit expenses, share-based compensation expense and changes in the fair value of our contingent earn-out liabilities).
|
•
|
Interest and other expense. Interest and other expense expense consists primarily of interest on our outstanding indebtedness and, as applicable, the amortization or write-off of deferred financing fees.
|
|
Fiscal Years Ended
|
||||||||||
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
||||||
Net sales
|
$
|
1,591,834
|
|
|
$
|
1,444,609
|
|
|
$
|
1,301,520
|
|
Cost of sales
|
1,185,481
|
|
|
1,077,562
|
|
|
972,142
|
|
|||
Gross profit
|
406,353
|
|
|
367,047
|
|
|
329,378
|
|
|||
Operating expenses
|
355,585
|
|
|
318,289
|
|
|
288,251
|
|
|||
Operating income
|
50,768
|
|
|
48,758
|
|
|
41,127
|
|
|||
Interest and other expense
|
18,365
|
|
|
20,914
|
|
|
22,719
|
|
|||
Income before income taxes
|
32,403
|
|
|
27,844
|
|
|
18,408
|
|
|||
Provision for income taxes
|
8,210
|
|
|
7,442
|
|
|
4,042
|
|
|||
Net income
|
$
|
24,193
|
|
|
$
|
20,402
|
|
|
$
|
14,366
|
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Net sales
|
$
|
1,591,834
|
|
|
$
|
1,444,609
|
|
|
$
|
147,225
|
|
|
10.2
|
%
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Gross profit
|
$
|
406,353
|
|
|
$
|
367,047
|
|
|
$
|
39,306
|
|
|
10.7
|
%
|
Gross profit margin
|
25.5
|
%
|
|
25.4
|
%
|
|
|
|
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||
Operating expenses
|
355,585
|
|
|
318,289
|
|
|
$
|
37,296
|
|
|
11.7
|
%
|
Percentage of net sales
|
22.3
|
%
|
|
22.0
|
%
|
|
|
|
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||
Interest and other expense
|
18,365
|
|
|
20,914
|
|
|
$
|
(2,549
|
)
|
|
(12.2
|
)%
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||
Provision for taxes
|
8,210
|
|
|
7,442
|
|
|
$
|
768
|
|
|
10.3
|
%
|
Effective tax rate
|
25.3
|
%
|
|
26.7
|
%
|
|
|
|
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Net sales
|
$
|
1,444,609
|
|
|
$
|
1,301,520
|
|
|
$
|
143,089
|
|
|
11.0
|
%
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||
Gross profit
|
367,047
|
|
|
329,378
|
|
|
$
|
37,669
|
|
|
11.4
|
%
|
Gross profit margin
|
25.4
|
%
|
|
25.3
|
%
|
|
|
|
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||
Operating expenses
|
318,289
|
|
|
288,251
|
|
|
$
|
30,038
|
|
|
10.4
|
%
|
Percentage of net sales
|
22.0
|
%
|
|
22.1
|
%
|
|
|
|
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||
Interest and other expense
|
20,914
|
|
|
22,719
|
|
|
$
|
(1,805
|
)
|
|
(7.9
|
)%
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||
Provision for taxes
|
7,442
|
|
|
4,042
|
|
|
$
|
3,400
|
|
|
84.1
|
%
|
Effective tax rate
|
26.7
|
%
|
|
22.0
|
%
|
|
|
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
||||||
Senior secured term loan
|
$
|
238,129
|
|
|
$
|
239,745
|
|
|
$
|
238,435
|
|
Total Convertible debt
|
$
|
154,000
|
|
|
$
|
—
|
|
|
$
|
36,750
|
|
Borrowings outstanding on asset-based loan facility
|
$
|
—
|
|
|
$
|
44,185
|
|
|
$
|
—
|
|
Finance leases and other financing obligations
|
$
|
3,905
|
|
|
$
|
193
|
|
|
$
|
664
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
||||||
Cash and cash equivalents
|
$
|
140,233
|
|
|
$
|
42,410
|
|
|
$
|
41,504
|
|
Working capital,(1) excluding cash and cash equivalents
|
$
|
162,772
|
|
|
$
|
160,783
|
|
|
$
|
147,063
|
|
Availability under asset-based loan facility
|
$
|
133,359
|
|
|
$
|
90,015
|
|
|
$
|
64,805
|
|
(1)
|
We define working capital as current assets less current liabilities. Fiscal year 2019 includes the impact of recognizing operating lease right-of-use assets and liabilities as a result of our adoption of Accounting Standards Codification Topic 842, “Leases,” as of December 29, 2018.
|
|
Fiscal Year Ended
|
||||||||||
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
||||||
Net income
|
$
|
24,193
|
|
|
$
|
20,402
|
|
|
$
|
14,366
|
|
Non-cash charges
|
$
|
47,625
|
|
|
$
|
38,186
|
|
|
$
|
28,725
|
|
Changes in working capital
|
$
|
(26,811
|
)
|
|
$
|
(13,506
|
)
|
|
$
|
(11,594
|
)
|
Cash provided by operating activities
|
$
|
45,007
|
|
|
$
|
45,082
|
|
|
$
|
31,497
|
|
Cash used in investing activities
|
$
|
(44,154
|
)
|
|
$
|
(33,688
|
)
|
|
$
|
(42,406
|
)
|
Cash provided by (used in) financing activities
|
$
|
96,947
|
|
|
$
|
(10,442
|
)
|
|
$
|
19,429
|
|
|
|
Payments Due by Period (1, 2)
|
||||||||||||||||||
|
|
Total
|
|
Less than One Year
|
|
1-3
Years
|
|
4-5
Years
|
|
Thereafter
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Inventory purchase commitments
|
|
$
|
53,413
|
|
|
$
|
53,413
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Indebtedness
|
|
$
|
406,644
|
|
|
$
|
2,993
|
|
|
$
|
244,151
|
|
|
$
|
159,500
|
|
|
$
|
—
|
|
Finance lease obligations
|
|
$
|
4,597
|
|
|
$
|
880
|
|
|
$
|
1,715
|
|
|
$
|
1,392
|
|
|
$
|
610
|
|
Pension exit liabilities
|
|
$
|
2,169
|
|
|
$
|
149
|
|
|
$
|
329
|
|
|
$
|
375
|
|
|
$
|
1,316
|
|
Long-term operating leases
|
|
$
|
197,359
|
|
|
$
|
25,662
|
|
|
$
|
43,130
|
|
|
$
|
30,080
|
|
|
$
|
98,487
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
|
|
$
|
664,182
|
|
|
$
|
83,097
|
|
|
$
|
289,325
|
|
|
$
|
191,347
|
|
|
$
|
100,413
|
|
(1)
|
Interest on our various outstanding debt instruments is included in the above table, except for our Term Loan and ABL, which have floating interest rates. At December 27, 2019, we had borrowings of $238.1 million under our Term Loan and zero under our ABL. During the fiscal year ended December 27, 2019, the weighted average interest rate on our Term Loan was approximately 5.8% and we incurred interest expense of approximately $13.9 million. During the
|
(2)
|
The table above excludes cash to be paid for income taxes, $14.7 million of total contingent earn-out liabilities related to certain acquisitions as of December 27, 2019 and approximately $5.3 million of lease payments related to long-term leases for several vehicles and a distribution and processing facility that do not commence until fiscal 2020.
|
•
|
Assessing the reasonableness of significant underlying assumptions through: (i) evaluating historical performance of the target entity and similar previously acquired entities, (ii) assessing performance against market trends, industry metrics, and guideline companies, and (iii) performing sensitivity analysis and evaluating potential effect of changes in certain assumptions.
|
•
|
Utilizing personnel with specialized knowledge and skill in valuation to assist in: (i) assessing the appropriateness of the complex valuation models utilized by management to determine the fair values of certain intangible assets and the contingent earn-out liabilities, and (ii) assessing the reasonableness of certain complex assumptions incorporated into the valuation models.
|
•
|
Utilizing personnel with specialized knowledge in complex debt and equity transactions to assist in: (i) evaluating relevant contract terms and conditions of the Notes’ agreements in relation to the appropriate accounting literature, and (ii) assessing the appropriateness of conclusions reached by the Company with respect to the accounting for the Notes, bifurcation, and potential derivatives.
|
|
December 27,
2019 |
|
December 28,
2018 |
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
140,233
|
|
|
$
|
42,410
|
|
Accounts receivable, net of allowance of $8,846 in 2019 and $7,460 in 2018
|
175,044
|
|
|
161,758
|
|
||
Inventories, net
|
124,056
|
|
|
112,614
|
|
||
Prepaid expenses and other current assets
|
13,823
|
|
|
11,953
|
|
||
Total current assets
|
453,156
|
|
|
328,735
|
|
||
Equipment, leasehold improvements and software, net
|
92,846
|
|
|
85,276
|
|
||
Operating lease right-of-use assets
|
127,649
|
|
|
—
|
|
||
Goodwill
|
197,743
|
|
|
184,280
|
|
||
Intangible assets, net
|
138,751
|
|
|
130,033
|
|
||
Other assets
|
3,534
|
|
|
4,074
|
|
||
Total assets
|
$
|
1,013,679
|
|
|
$
|
732,398
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
94,097
|
|
|
$
|
87,799
|
|
Accrued liabilities
|
29,847
|
|
|
24,810
|
|
||
Short-term operating lease liabilities
|
17,453
|
|
|
—
|
|
||
Accrued compensation
|
8,033
|
|
|
12,872
|
|
||
Current portion of long-term debt
|
721
|
|
|
61
|
|
||
Total current liabilities
|
150,151
|
|
|
125,542
|
|
||
Long-term debt, net of current portion
|
386,106
|
|
|
278,169
|
|
||
Operating lease liabilities
|
120,572
|
|
|
—
|
|
||
Deferred taxes, net
|
10,883
|
|
|
9,601
|
|
||
Other liabilities and deferred credits
|
10,034
|
|
|
10,410
|
|
||
Total liabilities
|
677,746
|
|
|
423,722
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred Stock - $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding at December 27, 2019 and December 28, 2018
|
—
|
|
|
—
|
|
||
Common Stock, - $0.01 par value, 100,000,000 shares authorized, 30,341,941 and 29,968,483 shares issued and outstanding at December 27, 2019 and December 28, 2018, respectively
|
304
|
|
|
300
|
|
||
Additional paid in capital
|
212,240
|
|
|
207,326
|
|
||
Accumulated other comprehensive loss
|
(2,048
|
)
|
|
(2,221
|
)
|
||
Retained earnings
|
125,437
|
|
|
103,271
|
|
||
Total stockholders’ equity
|
335,933
|
|
|
308,676
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,013,679
|
|
|
$
|
732,398
|
|
|
Fiscal Years Ended
|
||||||||||
|
December 27,
2019 |
|
December 28,
2018 |
|
December 29,
2017 |
||||||
Net sales
|
$
|
1,591,834
|
|
|
$
|
1,444,609
|
|
|
$
|
1,301,520
|
|
Cost of sales
|
1,185,481
|
|
|
1,077,562
|
|
|
972,142
|
|
|||
Gross profit
|
406,353
|
|
|
367,047
|
|
|
329,378
|
|
|||
Operating expenses
|
355,585
|
|
|
318,289
|
|
|
288,251
|
|
|||
Operating income
|
50,768
|
|
|
48,758
|
|
|
41,127
|
|
|||
Interest expense
|
18,264
|
|
|
20,745
|
|
|
22,709
|
|
|||
Loss on asset disposal
|
101
|
|
|
169
|
|
|
10
|
|
|||
Income before income taxes
|
32,403
|
|
|
27,844
|
|
|
18,408
|
|
|||
Provision for income taxes
|
8,210
|
|
|
7,442
|
|
|
4,042
|
|
|||
Net income
|
$
|
24,193
|
|
|
$
|
20,402
|
|
|
$
|
14,366
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
173
|
|
|
(672
|
)
|
|
637
|
|
|||
Comprehensive income
|
$
|
24,366
|
|
|
$
|
19,730
|
|
|
$
|
15,003
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
0.82
|
|
|
$
|
0.71
|
|
|
$
|
0.55
|
|
Diluted
|
$
|
0.81
|
|
|
$
|
0.70
|
|
|
$
|
0.54
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||
Basic
|
29,532,342
|
|
|
28,703,265
|
|
|
26,118,482
|
|
|||
Diluted
|
30,073,338
|
|
|
29,678,919
|
|
|
27,424,526
|
|
|
Common Stock
|
|
Additional
Paid in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Total
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance December 30, 2016
|
26,280,469
|
|
|
$
|
263
|
|
|
$
|
127,180
|
|
|
$
|
(2,186
|
)
|
|
$
|
68,503
|
|
|
$
|
193,760
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,366
|
|
|
14,366
|
|
|||||
Stock compensation
|
110,331
|
|
|
—
|
|
|
3,018
|
|
|
—
|
|
|
—
|
|
|
3,018
|
|
|||||
Public offering of common stock
|
1,900,000
|
|
|
19
|
|
|
34,001
|
|
|
—
|
|
|
—
|
|
|
34,020
|
|
|||||
Shares issued for Fells Point acquisition
|
185,442
|
|
|
2
|
|
|
3,298
|
|
|
—
|
|
|
—
|
|
|
3,300
|
|
|||||
Cumulative translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
637
|
|
|
—
|
|
|
637
|
|
|||||
Shares surrendered to pay withholding taxes
|
(34,034
|
)
|
|
—
|
|
|
(500
|
)
|
|
—
|
|
|
—
|
|
|
(500
|
)
|
|||||
Balance December 29, 2017
|
28,442,208
|
|
|
$
|
284
|
|
|
$
|
166,997
|
|
|
$
|
(1,549
|
)
|
|
$
|
82,869
|
|
|
$
|
248,601
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,402
|
|
|
20,402
|
|
|||||
Stock compensation
|
310,451
|
|
|
3
|
|
|
4,091
|
|
|
—
|
|
|
—
|
|
|
4,094
|
|
|||||
Conversion of subordinated notes
|
1,246,272
|
|
|
13
|
|
|
37,002
|
|
|
—
|
|
|
—
|
|
|
37,015
|
|
|||||
Cumulative translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(672
|
)
|
|
—
|
|
|
(672
|
)
|
|||||
Shares surrendered to pay withholding taxes
|
(30,448
|
)
|
|
—
|
|
|
(764
|
)
|
|
—
|
|
|
—
|
|
|
(764
|
)
|
|||||
Balance December 28, 2018
|
29,968,483
|
|
|
$
|
300
|
|
|
$
|
207,326
|
|
|
$
|
(2,221
|
)
|
|
$
|
103,271
|
|
|
$
|
308,676
|
|
Cumulative effect adjustment, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,027
|
)
|
|
(2,027
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,193
|
|
|
24,193
|
|
|||||
Stock compensation
|
329,338
|
|
|
3
|
|
|
4,396
|
|
|
—
|
|
|
—
|
|
|
4,399
|
|
|||||
Option exercises
|
76,169
|
|
|
1
|
|
|
1,540
|
|
|
—
|
|
|
—
|
|
|
1,541
|
|
|||||
Cumulative translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
173
|
|
|
—
|
|
|
173
|
|
|||||
Shares surrendered to pay withholding taxes
|
(32,049
|
)
|
|
—
|
|
|
(1,022
|
)
|
|
—
|
|
|
—
|
|
|
(1,022
|
)
|
|||||
Balance December 27, 2019
|
30,341,941
|
|
|
$
|
304
|
|
|
$
|
212,240
|
|
|
$
|
(2,048
|
)
|
|
$
|
125,437
|
|
|
$
|
335,933
|
|
|
December 27,
2019 |
|
December 28,
2018 |
|
December 29,
2017 |
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
24,193
|
|
|
$
|
20,402
|
|
|
$
|
14,366
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
13,328
|
|
|
10,296
|
|
|
8,516
|
|
|||
Amortization of intangible assets
|
12,663
|
|
|
11,910
|
|
|
12,033
|
|
|||
Provision for allowance for doubtful accounts
|
4,981
|
|
|
3,790
|
|
|
4,061
|
|
|||
Non-cash operating lease expense
|
2,043
|
|
|
770
|
|
|
285
|
|
|||
Deferred taxes
|
2,063
|
|
|
2,554
|
|
|
(703
|
)
|
|||
Amortization of deferred financing fees
|
2,168
|
|
|
3,155
|
|
|
2,084
|
|
|||
Stock compensation
|
4,399
|
|
|
4,094
|
|
|
3,018
|
|
|||
Change in fair value of contingent earn-out liabilities
|
5,879
|
|
|
1,448
|
|
|
(579
|
)
|
|||
Loss on asset disposal
|
101
|
|
|
169
|
|
|
10
|
|
|||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
(13,213
|
)
|
|
(19,466
|
)
|
|
(13,611
|
)
|
|||
Inventories
|
(9,439
|
)
|
|
(6,330
|
)
|
|
(11,783
|
)
|
|||
Prepaid expenses and other current assets
|
(1,813
|
)
|
|
120
|
|
|
4,762
|
|
|||
Accounts payable, accrued liabilities and accrued compensation
|
3,775
|
|
|
13,677
|
|
|
10,406
|
|
|||
Other assets and liabilities
|
(6,121
|
)
|
|
(1,507
|
)
|
|
(1,368
|
)
|
|||
Net cash provided by operating activities
|
45,007
|
|
|
45,082
|
|
|
31,497
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(16,077
|
)
|
|
(19,817
|
)
|
|
(12,311
|
)
|
|||
Cash paid for acquisitions, net of cash received
|
(28,077
|
)
|
|
(13,901
|
)
|
|
(30,095
|
)
|
|||
Proceeds from asset disposals
|
—
|
|
|
30
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(44,154
|
)
|
|
(33,688
|
)
|
|
(42,406
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Payment of debt, finance lease and other financing obligations
|
(1,894
|
)
|
|
(49,360
|
)
|
|
(12,830
|
)
|
|||
Proceeds from the issuance of common stock, net of issuance costs
|
—
|
|
|
—
|
|
|
34,020
|
|
|||
Proceeds from debt issuance
|
150,000
|
|
|
—
|
|
|
—
|
|
|||
Payment of deferred financing fees
|
(5,082
|
)
|
|
(1,502
|
)
|
|
(761
|
)
|
|||
Proceeds from exercise of stock options
|
1,541
|
|
|
—
|
|
|
—
|
|
|||
Surrender of shares to pay withholding taxes
|
(1,022
|
)
|
|
(764
|
)
|
|
(500
|
)
|
|||
Cash paid for contingent earn-out liability
|
(2,412
|
)
|
|
(3,000
|
)
|
|
(500
|
)
|
|||
Borrowings under asset based loan facility
|
—
|
|
|
47,100
|
|
|
24,000
|
|
|||
Payments under asset based loan facility
|
(44,184
|
)
|
|
(2,916
|
)
|
|
(24,000
|
)
|
|||
Net cash provided by (used in ) financing activities
|
96,947
|
|
|
(10,442
|
)
|
|
19,429
|
|
|||
|
|
|
|
|
|
||||||
Effect of foreign currency on cash and cash equivalents
|
23
|
|
|
(46
|
)
|
|
122
|
|
|||
Net change in cash and cash equivalents
|
97,823
|
|
|
906
|
|
|
8,642
|
|
|||
Cash and cash equivalents at beginning of year
|
42,410
|
|
|
41,504
|
|
|
32,862
|
|
|||
Cash and cash equivalents at end of year
|
$
|
140,233
|
|
|
$
|
42,410
|
|
|
$
|
41,504
|
|
•
|
apply hindsight in determining the lease term of its leases;
|
•
|
not reassess whether any expired or existing contracts are or contain leases;
|
•
|
not reassess the lease classification of any expired or existing leases; and
|
•
|
not reassess initial direct costs for any existing leases.
|
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
|||||||||||||||
Center-of-the-Plate
|
$
|
711,979
|
|
|
44.7
|
%
|
|
$
|
629,038
|
|
|
43.5
|
%
|
|
$
|
580,025
|
|
|
44.6
|
%
|
Dry Goods
|
278,930
|
|
|
17.5
|
%
|
|
253,176
|
|
|
17.5
|
%
|
|
224,323
|
|
|
17.2
|
%
|
|||
Pastry
|
221,041
|
|
|
13.9
|
%
|
|
199,990
|
|
|
13.8
|
%
|
|
176,672
|
|
|
13.6
|
%
|
|||
Cheeses and Charcuterie
|
158,834
|
|
|
10.0
|
%
|
|
151,640
|
|
|
10.5
|
%
|
|
133,024
|
|
|
10.2
|
%
|
|||
Dairy and Eggs
|
110,740
|
|
|
7.0
|
%
|
|
106,768
|
|
|
7.4
|
%
|
|
90,613
|
|
|
7.0
|
%
|
|||
Oils and Vinegars
|
80,156
|
|
|
5.0
|
%
|
|
76,313
|
|
|
5.3
|
%
|
|
71,962
|
|
|
5.5
|
%
|
|||
Kitchen Supplies
|
30,154
|
|
|
1.9
|
%
|
|
27,684
|
|
|
2.0
|
%
|
|
24,901
|
|
|
1.9
|
%
|
|||
Total
|
$
|
1,591,834
|
|
|
100
|
%
|
|
$
|
1,444,609
|
|
|
100
|
%
|
|
$
|
1,301,520
|
|
|
100
|
%
|
a)
|
quoted prices for similar assets in active markets;
|
b)
|
quoted prices for identical or similar assets in inactive markets;
|
c)
|
inputs other than quoted prices that are observable for the asset; and
|
d)
|
inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
|
Fiscal Year Ended
|
||||||||||
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
||||||
Net income per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
0.82
|
|
|
$
|
0.71
|
|
|
$
|
0.55
|
|
Diluted
|
$
|
0.81
|
|
|
$
|
0.70
|
|
|
$
|
0.54
|
|
Weighted average common shares:
|
|
|
|
|
|
|
|
|
|||
Basic
|
29,532,342
|
|
|
28,703,265
|
|
|
26,118,482
|
|
|||
Diluted
|
30,073,338
|
|
|
29,678,919
|
|
|
27,424,526
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
||||||
Numerator:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
24,193
|
|
|
$
|
20,402
|
|
|
$
|
14,366
|
|
Add effect of dilutive securities
|
|
|
|
|
|
|
|
|
|||
Interest on convertible notes, net of tax
|
207
|
|
|
362
|
|
|
536
|
|
|||
Adjusted net income
|
$
|
24,400
|
|
|
$
|
20,764
|
|
|
$
|
14,902
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|||
Weighted average basic common shares outstanding
|
29,532,342
|
|
|
28,703,265
|
|
|
26,118,482
|
|
|||
Dilutive effect of stock options and unvested common shares
|
211,050
|
|
|
270,520
|
|
|
68,670
|
|
|||
Dilutive effect of convertible notes
|
329,946
|
|
|
705,134
|
|
|
1,237,374
|
|
|||
Weighted average diluted common shares outstanding
|
30,073,338
|
|
|
29,678,919
|
|
|
27,424,526
|
|
|
Fiscal Year Ended
|
|||||||
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
|||
Restricted Share Awards (“RSAs”)
|
132,861
|
|
|
42
|
|
|
84,511
|
|
Stock options
|
—
|
|
|
—
|
|
|
201,799
|
|
Convertible notes
|
76,384
|
|
|
—
|
|
|
—
|
|
|
Del Monte
|
|
Fells Point
|
|
Bassian
|
|
Other Acquisitions
|
|
Total
|
||||||||||
Balance December 29, 2017
|
$
|
649
|
|
|
$
|
4,579
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,228
|
|
Acquisition value
|
—
|
|
|
—
|
|
|
—
|
|
|
1,414
|
|
|
1,414
|
|
|||||
Cash payments
|
—
|
|
|
(3,000
|
)
|
|
—
|
|
|
—
|
|
|
(3,000
|
)
|
|||||
Changes in fair value
|
(649
|
)
|
|
2,070
|
|
|
—
|
|
|
27
|
|
|
1,448
|
|
|||||
Balance December 28, 2018
|
—
|
|
|
3,649
|
|
|
—
|
|
|
1,441
|
|
|
5,090
|
|
|||||
Acquisition value
|
—
|
|
|
—
|
|
|
7,450
|
|
|
479
|
|
|
7,929
|
|
|||||
Cash payments
|
(200
|
)
|
|
(3,000
|
)
|
|
—
|
|
|
(1,000
|
)
|
|
(4,200
|
)
|
|||||
Changes in fair value
|
200
|
|
|
3,895
|
|
|
507
|
|
|
1,277
|
|
|
5,879
|
|
|||||
Balance December 27, 2019
|
$
|
—
|
|
|
$
|
4,544
|
|
|
$
|
7,957
|
|
|
$
|
2,197
|
|
|
$
|
14,698
|
|
|
December 27, 2019
|
||||||
|
Carrying Value
|
|
Fair Value
|
||||
Convertible Senior Notes
|
$
|
150,000
|
|
|
$
|
165,000
|
|
Convertible Unsecured Note
|
$
|
4,000
|
|
|
$
|
4,282
|
|
|
|
Bassian
|
||
Current assets
|
|
$
|
6,657
|
|
Customer relationships
|
|
15,530
|
|
|
Trademarks
|
|
4,610
|
|
|
Non-compete agreement
|
|
1,000
|
|
|
Goodwill
|
|
13,065
|
|
|
Fixed assets
|
|
856
|
|
|
Other assets
|
|
10
|
|
|
Current liabilities
|
|
(2,501
|
)
|
|
Earn-out liability
|
|
(7,450
|
)
|
|
Total consideration
|
|
$
|
31,777
|
|
|
|
Useful Lives
|
|
December 27, 2019
|
|
December 28, 2018
|
||||
Land
|
|
Indefinite
|
|
$
|
1,170
|
|
|
$
|
1,170
|
|
Buildings
|
|
20 years
|
|
1,360
|
|
|
1,292
|
|
||
Machinery and equipment
|
|
5-10 years
|
|
21,718
|
|
|
17,837
|
|
||
Computers, data processing and other equipment
|
|
3-7 years
|
|
12,686
|
|
|
11,244
|
|
||
Software
|
|
3-7 years
|
|
29,305
|
|
|
22,779
|
|
||
Leasehold improvements
|
|
1-40 years
|
|
70,903
|
|
|
60,565
|
|
||
Furniture and fixtures
|
|
7 years
|
|
3,309
|
|
|
3,268
|
|
||
Vehicles
|
|
5-7 years
|
|
6,410
|
|
|
2,769
|
|
||
Other
|
|
7 years
|
|
95
|
|
|
95
|
|
||
Construction-in-process
|
|
|
|
9,200
|
|
|
15,757
|
|
||
|
|
|
|
156,156
|
|
|
136,776
|
|
||
Less: accumulated depreciation and amortization
|
|
|
|
(63,310
|
)
|
|
(51,500
|
)
|
||
Equipment, leasehold improvements and software, net
|
|
|
|
$
|
92,846
|
|
|
$
|
85,276
|
|
|
Fiscal Year Ended
|
||||||||||
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
||||||
Depreciation expense
|
$
|
9,535
|
|
|
$
|
7,142
|
|
|
$
|
6,708
|
|
Software amortization
|
$
|
3,793
|
|
|
$
|
3,154
|
|
|
$
|
1,808
|
|
Carrying amount as of December 29, 2017
|
$
|
173,202
|
|
Goodwill adjustments (1)
|
3,283
|
|
|
Acquisitions
|
7,839
|
|
|
Foreign currency translation
|
(44
|
)
|
|
Carrying amount as of December 28, 2018
|
184,280
|
|
|
Acquisitions
|
13,424
|
|
|
Foreign currency translation
|
39
|
|
|
Carrying amount as of December 27, 2019
|
$
|
197,743
|
|
(1)
|
The goodwill adjustments primarily relate to the Fells Point acquisition.
|
|
|
Weighted Average
Remaining Amortization Period |
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net Amount
|
||||||
December 27, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships
|
|
134 months
|
|
$
|
135,226
|
|
|
$
|
(45,454
|
)
|
|
$
|
89,772
|
|
Non-compete agreements
|
|
49 months
|
|
8,579
|
|
|
(7,479
|
)
|
|
1,100
|
|
|||
Trademarks
|
|
193 months
|
|
64,505
|
|
|
(16,626
|
)
|
|
47,879
|
|
|||
Total
|
|
|
|
$
|
208,310
|
|
|
$
|
(69,559
|
)
|
|
$
|
138,751
|
|
December 28, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships
|
|
137 months
|
|
$
|
119,488
|
|
|
$
|
(36,185
|
)
|
|
$
|
83,303
|
|
Non-compete agreements
|
|
54 months
|
|
7,579
|
|
|
(7,251
|
)
|
|
328
|
|
|||
Trademarks
|
|
213 months
|
|
59,862
|
|
|
(13,460
|
)
|
|
46,402
|
|
|||
Total
|
|
|
|
$
|
186,929
|
|
|
$
|
(56,896
|
)
|
|
$
|
130,033
|
|
2020
|
$
|
12,849
|
|
2021
|
12,844
|
|
|
2022
|
12,064
|
|
|
2023
|
11,036
|
|
|
2024
|
10,696
|
|
|
Thereafter
|
79,262
|
|
|
Total
|
$
|
138,751
|
|
|
|
December 27, 2019
|
|
December 28, 2018
|
||||
Senior secured term loan
|
|
$
|
238,129
|
|
|
$
|
239,745
|
|
Convertible senior notes
|
|
150,000
|
|
|
—
|
|
||
Convertible unsecured note
|
|
4,000
|
|
|
—
|
|
||
Finance lease and other financing obligations
|
|
3,905
|
|
|
193
|
|
||
Asset-based loan facility
|
|
—
|
|
|
44,185
|
|
||
Deferred finance fees and original issue discount
|
|
(9,207
|
)
|
|
(5,893
|
)
|
||
Total debt obligations
|
|
386,827
|
|
|
278,230
|
|
||
Less: current installments
|
|
(721
|
)
|
|
(61
|
)
|
||
Total debt obligations excluding current installments
|
|
$
|
386,106
|
|
|
$
|
278,169
|
|
2020
|
$
|
—
|
|
2021
|
—
|
|
|
2022
|
238,129
|
|
|
2023
|
4,000
|
|
|
2024
|
150,000
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
392,129
|
|
|
|
Shares
|
|
Weighted Average
Grant Date Fair Value
|
|||
Unvested at December 29, 2017
|
|
329,761
|
|
|
$
|
16.69
|
|
Granted
|
|
311,957
|
|
|
23.62
|
|
|
Vested
|
|
(113,482
|
)
|
|
17.60
|
|
|
Forfeited
|
|
(1,506
|
)
|
|
17.13
|
|
|
Unvested at December 28, 2018
|
|
526,730
|
|
|
$
|
20.60
|
|
Granted
|
|
384,531
|
|
|
34.44
|
|
|
Vested
|
|
(115,459
|
)
|
|
21.32
|
|
|
Forfeited
|
|
(55,193
|
)
|
|
20.46
|
|
|
Unvested at December 27, 2019
|
|
740,609
|
|
|
$
|
27.68
|
|
|
|
Shares
|
|
Weighted
Average Exercise Price |
|
Aggregate
Intrinsic Value |
|
Weighted Average
Remaining Contractual Term (in years) |
|||||
Outstanding December 29, 2017
|
|
191,808
|
|
|
$
|
20.23
|
|
|
$
|
33
|
|
|
8.2
|
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Forfeited
|
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Outstanding December 28, 2018
|
|
191,808
|
|
|
$
|
20.23
|
|
|
$
|
2,129
|
|
|
7.2
|
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
(76,169
|
)
|
|
20.23
|
|
|
|
|
|
|||
Forfeited
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding December 27, 2019
|
|
115,639
|
|
|
$
|
20.23
|
|
|
$
|
2,051
|
|
|
6.2
|
Exercisable at December 27, 2019
|
|
115,639
|
|
|
20.23
|
|
|
$
|
2,051
|
|
|
6.2
|
Operating lease cost
|
$
|
27,415
|
|
Finance lease cost:
|
|
||
Amortization of right-of-use asset
|
308
|
|
|
Interest expense on lease liabilities
|
96
|
|
|
Total finance lease cost
|
$
|
404
|
|
Short-term lease cost
|
2,143
|
|
|
Variable lease cost
|
2,707
|
|
|
Sublease income
|
(514
|
)
|
|
Total lease cost, net
|
$
|
32,155
|
|
|
Operating Leases
|
|
Finance Leases
|
||||||||||||||||
|
Related Party Real Estate
|
|
Third Party Real Estate
|
|
Vehicles and Equipment
|
|
Total
|
|
Vehicles and Equipment
|
||||||||||
2020
|
$
|
365
|
|
|
$
|
13,637
|
|
|
$
|
11,660
|
|
|
$
|
25,662
|
|
|
$
|
880
|
|
2021
|
—
|
|
|
13,332
|
|
|
9,368
|
|
|
22,700
|
|
|
874
|
|
|||||
2022
|
—
|
|
|
13,106
|
|
|
7,324
|
|
|
20,430
|
|
|
841
|
|
|||||
2023
|
—
|
|
|
12,210
|
|
|
4,948
|
|
|
17,158
|
|
|
747
|
|
|||||
2024
|
—
|
|
|
11,160
|
|
|
1,762
|
|
|
12,922
|
|
|
645
|
|
|||||
Thereafter
|
—
|
|
|
97,685
|
|
|
802
|
|
|
98,487
|
|
|
610
|
|
|||||
Total
|
$
|
365
|
|
|
$
|
161,130
|
|
|
$
|
35,864
|
|
|
$
|
197,359
|
|
|
$
|
4,597
|
|
Less interest
|
|
|
|
|
|
|
(59,334
|
)
|
|
(692
|
)
|
||||||||
Present value
|
|
|
|
|
|
|
$
|
138,025
|
|
|
$
|
3,905
|
|
|
Balance Sheet Location
|
December 27, 2019
|
||
Short-term finance lease liabilities
|
Current portion of long-term debt
|
$
|
721
|
|
Long-term finance lease liabilities
|
Long-term debt, net of current portion
|
$
|
3,184
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
2019
|
$
|
24,666
|
|
|
$
|
56
|
|
2020
|
23,047
|
|
|
55
|
|
||
2021
|
19,918
|
|
|
50
|
|
||
2022
|
17,838
|
|
|
42
|
|
||
2023
|
14,876
|
|
|
4
|
|
||
Thereafter
|
47,330
|
|
|
—
|
|
||
Total minimum lease payments
|
$
|
147,675
|
|
|
207
|
|
|
Less interest
|
|
|
(49
|
)
|
|||
Present value of capital lease obligations
|
|
|
$
|
158
|
|
|
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
||||||
Current income tax expense:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
4,003
|
|
|
$
|
2,945
|
|
|
$
|
3,342
|
|
State
|
|
2,144
|
|
|
1,943
|
|
|
1,403
|
|
|||
Total current income tax expense
|
|
6,147
|
|
|
4,888
|
|
|
4,745
|
|
|||
Deferred income tax expense (benefit):
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
1,617
|
|
|
2,363
|
|
|
(1,059
|
)
|
|||
Foreign
|
|
17
|
|
|
(472
|
)
|
|
215
|
|
|||
State
|
|
429
|
|
|
663
|
|
|
141
|
|
|||
Total deferred income tax expense (benefit)
|
|
2,063
|
|
|
2,554
|
|
|
(703
|
)
|
|||
Total income tax expense
|
|
$
|
8,210
|
|
|
$
|
7,442
|
|
|
$
|
4,042
|
|
|
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
||||||
Statutory U.S. Federal tax
|
|
$
|
6,805
|
|
|
$
|
5,847
|
|
|
$
|
6,443
|
|
Differences due to:
|
|
|
|
|
|
|
|
|
|
|||
State and local taxes, net of federal benefit
|
|
2,078
|
|
|
1,906
|
|
|
1,112
|
|
|||
Change in valuation allowance
|
|
95
|
|
|
523
|
|
|
289
|
|
|||
Impact of the Tax Act
|
|
—
|
|
|
—
|
|
|
(3,573
|
)
|
|||
Stock compensation
|
|
(676
|
)
|
|
(197
|
)
|
|
162
|
|
|||
Other
|
|
(92
|
)
|
|
(637
|
)
|
|
(391
|
)
|
|||
Income tax expense
|
|
$
|
8,210
|
|
|
$
|
7,442
|
|
|
$
|
4,042
|
|
|
|
December 27, 2019
|
|
December 28, 2018
|
||||
Deferred tax assets:
|
|
|
|
|
|
|
||
Receivables and inventory
|
|
$
|
4,468
|
|
|
$
|
3,978
|
|
Accrued expenses
|
|
170
|
|
|
1,835
|
|
||
Self-insurance reserves
|
|
1,957
|
|
|
2,050
|
|
||
Net operating loss carryforwards
|
|
1,393
|
|
|
1,749
|
|
||
Stock compensation
|
|
1,894
|
|
|
1,670
|
|
||
Operating lease liabilities
|
|
37,740
|
|
|
—
|
|
||
Other
|
|
612
|
|
|
803
|
|
||
Total deferred tax assets
|
|
48,234
|
|
|
12,085
|
|
||
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Property & equipment
|
|
(5,218
|
)
|
|
(3,446
|
)
|
||
Intangible assets
|
|
(15,192
|
)
|
|
(13,197
|
)
|
||
Contingent earn-out liabilities
|
|
(1,526
|
)
|
|
(3,179
|
)
|
||
Prepaid expenses and other
|
|
(1,379
|
)
|
|
(1,052
|
)
|
||
Operating lease right-of-use assets
|
|
(34,895
|
)
|
|
—
|
|
||
Total deferred tax liabilities
|
|
(58,210
|
)
|
|
(20,874
|
)
|
||
Valuation allowance
|
|
(907
|
)
|
|
(812
|
)
|
||
Total net deferred tax liability
|
|
$
|
(10,883
|
)
|
|
$
|
(9,601
|
)
|
|
|
December 27, 2019
|
|
December 28, 2018
|
|
December 29, 2017
|
||||||
Cash paid for income taxes, net of cash received
|
|
$
|
6,046
|
|
|
$
|
4,825
|
|
|
$
|
333
|
|
Cash paid for interest
|
|
$
|
16,271
|
|
|
$
|
16,955
|
|
|
$
|
20,796
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
|
|
||||||
Operating cash flows from operating leases
|
|
$
|
25,302
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating cash flows from finance leases
|
|
$
|
96
|
|
|
$
|
—
|
|
|
$
|
—
|
|
ROU assets obtained in exchange for lease liabilities:
|
|
|
|
|
|
|
||||||
Operating leases
|
|
$
|
155,027
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Finance leases
|
|
$
|
4,183
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
||||||
Sinking funds used to retire debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,939
|
|
Conversion of subordinated notes and accrued interest into common stock
|
|
$
|
—
|
|
|
$
|
37,015
|
|
|
$
|
—
|
|
Common stock issued for acquisitions
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,300
|
|
Contingent earn-out liabilities for acquisitions
|
|
$
|
7,929
|
|
|
$
|
1,414
|
|
|
$
|
4,445
|
|
Convertible notes issued for acquisitions
|
|
$
|
4,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Balance at Beginning of Period
|
|
Additions Charged to Expense
|
|
Deductions
|
|
Balance at End of Period
|
||||||||
Allowance for doubtful accounts
|
|
|
|
|
|
|
|
|
||||||||
December 27, 2019
|
|
$
|
7,460
|
|
|
$
|
4,981
|
|
|
$
|
(3,595
|
)
|
|
$
|
8,846
|
|
December 28, 2018
|
|
8,026
|
|
|
3,790
|
|
|
(4,356
|
)
|
|
7,460
|
|
||||
December 29, 2017
|
|
6,848
|
|
|
4,061
|
|
|
(2,883
|
)
|
|
8,026
|
|
Allowance for deferred tax assets
|
|
|
|
|
|
|
|
|
||||||||
December 27, 2019
|
|
$
|
812
|
|
|
$
|
95
|
|
|
$
|
—
|
|
|
$
|
907
|
|
December 28, 2018
|
|
289
|
|
|
523
|
|
|
—
|
|
|
812
|
|
||||
December 29, 2017
|
|
—
|
|
|
289
|
|
|
—
|
|
|
289
|
|
|
|
Fiscal 2019
|
||||||||||||||
|
|
Q1 (1)
|
|
Q2
|
|
Q3
|
|
Q4
|
||||||||
Net sales
|
|
$
|
357,027
|
|
|
$
|
411,420
|
|
|
$
|
396,880
|
|
|
$
|
426,507
|
|
Gross profit
|
|
90,189
|
|
|
106,475
|
|
|
101,993
|
|
|
107,696
|
|
||||
Operating profit
|
|
6,150
|
|
|
15,536
|
|
|
10,648
|
|
|
18,434
|
|
||||
Income before income taxes
|
|
1,565
|
|
|
10,685
|
|
|
6,107
|
|
|
14,046
|
|
||||
Net income
|
|
1,134
|
|
|
7,746
|
|
|
4,425
|
|
|
10,888
|
|
||||
Basic net income per share
|
|
0.04
|
|
|
0.26
|
|
|
0.15
|
|
|
0.37
|
|
||||
Diluted net income per share
|
|
0.04
|
|
|
0.26
|
|
|
0.15
|
|
|
0.36
|
|
|
|
Fiscal 2018
|
||||||||||||||
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
||||||||
Net sales
|
|
$
|
318,615
|
|
|
$
|
370,442
|
|
|
$
|
361,496
|
|
|
$
|
394,056
|
|
Gross profit
|
|
79,522
|
|
|
93,240
|
|
|
91,993
|
|
|
102,292
|
|
||||
Operating profit
|
|
5,740
|
|
|
14,948
|
|
|
10,268
|
|
|
17,802
|
|
||||
Income (loss) before income taxes
|
|
761
|
|
|
9,537
|
|
|
5,592
|
|
|
11,954
|
|
||||
Net income (loss)
|
|
544
|
|
|
6,819
|
|
|
4,157
|
|
|
8,882
|
|
||||
Basic net income (loss) per share
|
|
0.02
|
|
|
0.24
|
|
|
0.14
|
|
|
0.30
|
|
||||
Diluted net income (loss) per share
|
|
0.02
|
|
|
0.24
|
|
|
0.14
|
|
|
0.30
|
|
(1)
|
The Company began reflecting the results of the Bassian acquisition in the first quarter of 2019.
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 9B.
|
OTHER INFORMATION
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan Category
|
Number of securities
to be issued upon exercise of outstanding options, warrants and rights |
|
Weighted-average
exercise price of outstanding options, warrants and rights |
|
Number of securities
remaining available for future issuance under equity compensation plans (excluding securities reflected in the second column) |
||||
Plans approved by stockholders
|
115,639
|
|
|
$
|
20.23
|
|
|
2,106,449
|
|
Plans not approved by stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
115,639
|
|
|
$
|
20.23
|
|
|
2,106,449
|
|
1.
|
Financial Statements – See Index to the Consolidated Financial Statements at Item 8 of this Annual Report on Form 10-K.
|
2.
|
Financial Statement Schedules - Supplemental schedules are not provided because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto.
|
3.
|
Exhibits – The exhibits listed in the accompanying Index of Exhibits are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K.
|
Item 16.
|
FORM 10-K SUMMARY
|
Exhibit
No.
|
|
Description
|
|
|
|
|
|
|
2.1
|
|
|
|
|
|
2.2
|
|
|
|
|
|
2.3
|
|
|
|
|
|
2.4
|
|
|
|
|
|
2.5
|
|
|
|
|
|
2.6
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.0
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5*
|
|
|
|
|
|
10.6*
|
|
|
|
|
|
10.7*
|
|
|
|
|
|
10.8*
|
|
|
|
|
|
10.9*
|
|
|
|
|
|
10.10*
|
|
|
|
|
|
10.11*
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13*
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16*
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18*
|
|
|
|
|
|
10.19*
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23†
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28*
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30*
|
|
|
|
|
|
10.31
|
|
|
|
|
|
10.32*
|
|
|
|
|
|
10.33*†
|
|
|
|
|
|
10.34*
|
|
|
|
|
|
10.35*
|
|
|
|
|
|
10.36*
|
|
|
|
|
|
10.37*
|
|
|
|
|
|
14.1
|
|
|
|
|
|
23.1†
|
|
|
|
|
|
21†
|
|
|
|
|
|
31.1†
|
|
|
|
|
|
31.2†
|
|
|
|
|
|
32.1†
|
|
|
|
|
|
32.2†
|
|
|
|
|
|
101.INS†
|
|
XBRL Instance Document – the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
101.SCH†
|
|
XBRL Schema Document
|
101.CAL†
|
|
XBRL Calculation Linkbase Document
|
101.DEF†
|
|
XBRL Definition Linkbase Document
|
101.LAB†
|
|
XBRL Label Linkbase Document
|
101.PRE†
|
|
XBRL Presentation Linkbase Document
|
104
|
|
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
|
|
*
|
Management Contract or Compensatory Plan or Arrangement
|
|
†
|
Filed herewith
|
|
THE CHEFS’ WAREHOUSE, INC.
|
|
|
February 24, 2020
|
/s/ Christopher Pappas
|
|
Christopher Pappas
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
|
Signature
|
|
Capacity
|
|
Date
|
|||
|
|
|
|
|
|||
/s/ Christopher Pappas
|
|
Chairman, President and
|
|
February 24, 2020
|
|||
Christopher Pappas
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|||
|
|
|
|
|
|||
/s/ James Leddy
|
|
Chief Financial Officer
|
|
February 24, 2020
|
|||
James Leddy
|
|
(Principal Financial Officer)
|
|
|
|||
|
|
|
|
|
|||
/s/ Timothy McCauley
|
|
Chief Accounting Officer
|
|
February 24, 2020
|
|||
Timothy McCauley
|
|
(Principal Accounting Officer)
|
|
|
|||
|
|
|
|
|
|||
/s/ John Pappas
|
|
Director and Vice Chairman
|
|
February 24, 2020
|
|||
John Pappas
|
|
|
|
|
|||
|
|
|
|
|
|||
/s/ Alan Guarino
|
|
Director
|
|
February 24, 2020
|
|||
Alan Guarino
|
|
|
|
|
|||
|
|
|
|
|
|||
/s/ Dominick C. Cerbone
|
|
Director
|
|
February 24, 2020
|
|||
Dominick C. Cerbone
|
|
|
|
|
|||
|
|
|
|
|
|||
/s/ Joseph Cugine
|
|
Director
|
|
February 24, 2020
|
|||
Joseph Cugine
|
|
|
|
|
|||
|
|
|
|
|
|||
/s/ Stephen Hanson
|
|
Director
|
|
February 24, 2020
|
|||
Stephen Hanson
|
|
|
|
|
|||
|
|
|
|
|
|||
/s/ Katherine Oliver
|
|
Director
|
|
February 24, 2020
|
|||
Katherine Oliver
|
|
|
|
|
|||
|
|
|
|
|
|||
/s/ Steven F. Goldstone
|
|
Director
|
|
February 24, 2020
|
|||
Steven F. Goldstone
|
|
|
|
|
c)
|
Section 6.03(d) of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:
|
c)
|
Section 6.03(d) of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:
|
Entity Name
|
|
|
|
|
|
|
|
State of Organization
|
Dairyland USA Corporation
|
|
|
|
|
|
|
|
New York
|
Dairyland HP LLC (1)
|
|
|
|
|
|
|
|
Delaware
|
Bel Canto Foods, LLC (1)
|
|
|
|
|
|
|
|
New York
|
Chefs’ Warehouse Transportation, LLC (2)
|
|
|
|
|
|
|
|
Delaware
|
Chefs’ Warehouse Parent, LLC
|
|
|
|
|
|
|
|
Delaware
|
The Chefs’ Warehouse Mid-Atlantic, LLC (3)
|
|
|
|
|
|
|
|
Delaware
|
The Chefs’ Warehouse West Coast, LLC (3)
|
|
|
|
|
|
|
|
Delaware
|
The Chefs’ Warehouse of Florida, LLC (3)
|
|
|
|
|
|
|
|
Delaware
|
The Chefs’ Warehouse Midwest, LLC (3)
|
|
|
|
|
|
|
|
Delaware
|
Michael’s Finer Meats Holdings, LLC (3)
|
|
|
|
|
|
|
|
Delaware
|
Michael’s Finer Meats, LLC (4)
|
|
|
|
|
|
|
|
Delaware
|
The Chefs’ Warehouse Pastry Division, Inc. (3)
|
|
|
|
|
|
|
|
Delaware
|
The Chefs’ Warehouse Pastry Division Canada ULC (5)
|
|
|
|
|
|
|
|
British Columbia, Canada
|
QZ Acquisition (USA), Inc. (3)
|
|
|
|
|
|
|
|
Delaware
|
Qzina Specialty Foods North America (USA), Inc. (6)
|
|
|
|
|
|
|
|
Delaware
|
Qzina Specialty Foods, Inc. (7)
|
|
|
|
|
|
|
|
Florida
|
Qzina Specialty Foods, Inc. (7)
|
|
|
|
|
|
|
|
Washington
|
Qzina Specialty Foods (Ambassador), Inc. (7)
|
|
|
|
|
|
|
|
California
|
CW LV Real Estate LLC (8)
|
|
|
|
|
|
|
|
Delaware
|
Allen Brothers 1893, LLC (9)
|
|
|
|
|
|
|
|
Delaware
|
Del Monte Capitol Meat Company Holdings, LLC (3)
|
|
|
|
|
|
|
|
Delaware
|
Del Monte Capitol Meat Company, LLC (10)
|
|
|
|
|
|
|
|
Delaware
|
The Great Steakhouse Steaks, LLC (11)
|
|
|
|
|
|
|
|
Delaware
|
Fells Point Holdings, LLC (3)
|
|
|
|
|
|
|
|
Delaware
|
Fells Point, LLC (12)
|
|
|
|
|
|
|
|
Delaware
|
Cambridge Protein Holdings, LLC (3)
|
|
|
|
|
|
|
|
Delaware
|
Cambridge, LLC (13)
|
|
|
|
|
|
|
|
Delaware
|
Dairyland Produce Holdings, LLC (3)
|
|
|
|
|
|
|
|
Delaware
|
Dairyland Produce, LLC (14)
|
|
|
|
|
|
|
|
Delaware
|
1.
|
Dairyland HP LLC and Bel Canto Foods, LLC are wholly-owned by Dairyland USA Corporation, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
2.
|
Chefs’ Warehouse Transportation, LLC is wholly-owned by The Chefs’ Warehouse, Inc.
|
3.
|
The Chefs’ Warehouse Mid-Atlantic, LLC, The Chefs’ Warehouse West Coast, LLC, The Chefs’ Warehouse of Florida, LLC, The Chefs’ Warehouse Midwest, LLC, Michael’s Finer Meats Holdings, LLC, The Chefs’ Warehouse Pastry Division, Inc., QZ Acquisition (USA), Inc., Del Monte Capitol Meat Company Holdings, LLC, Fells Point Holdings, LLC, Cambridge Protein Holdings, LLC and Dairyland Produce Holdings, LLC are wholly-owned by Chefs’ Warehouse Parent, LLC, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
4.
|
Michael’s Finer Meats, LLC is wholly-owned by Michael’s Finer Meats Holdings, LLC, which is wholly-owned by Chefs’ Warehouse Parent, LLC, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
5.
|
The Chefs’ Warehouse Pastry Division Canada ULC is wholly-owned by The Chefs’ Warehouse Pastry Division, Inc., which is wholly-owned by Chefs’ Warehouse Parent, LLC, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
6.
|
Qzina Specialty Foods North America (USA), Inc. is wholly-owned by QZ Acquisition (USA), Inc., which is wholly-owned by Chefs’ Warehouse Parent, LLC, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
7.
|
Qzina Specialty Foods, Inc., a Florida corporation, Qzina Specialty Foods, Inc., a Washington corporation, and Qzina Specialty Foods (Ambassador), Inc. are wholly-owned by Qzina Specialty Foods North America (USA), Inc., which is wholly-owned by QZ Acquisition (USA), Inc., which is wholly-owned by Chefs’ Warehouse Parent, LLC, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
8.
|
CW LV Real Estate LLC is wholly-owned by The Chefs’ Warehouse West Coast, LLC, which is wholly-owned by Chefs’ Warehouse Parent, LLC, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
9.
|
Allen Brothers 1893, LLC is wholly-owned by The Chefs’ Warehouse Midwest, LLC, which is wholly-owned by Chefs’ Warehouse Parent, LLC, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
10.
|
Del Monte Capitol Meat Company, LLC is wholly-owned by Del Monte Meat Company Holdings, LLC, which is wholly-owned by Chefs’ Warehouse Parent, LLC, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
11.
|
The Great Steakhouse Steaks, LLC is wholly owned by Allen Brothers 1893, LLC, which is wholly-owned by The Chefs’ Warehouse Midwest, LLC, which is wholly-owned by Chefs’ Warehouse Parent, LLC, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
12.
|
Fells Point, LLC is wholly owned by Fells Point Holdings, LLC, which is wholly-owned by Chefs’ Warehouse Parent, LLC, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
13.
|
Cambridge, LLC is wholly owned by Cambridge Protein Holdings, LLC, which is wholly-owned by Chefs’ Warehouse Parent, LLC, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
14.
|
Dairyland Produce, LLC is wholly owned by Dairyland Produce Holdings, LLC, which is wholly-owned by Chefs’ Warehouse Parent, LLC, which is wholly-owned by The Chefs’ Warehouse, Inc.
|
1.
|
I have reviewed this annual report on Form 10-K of The Chefs’ Warehouse, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and Rule 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Dated: February 24, 2020
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/s/ Christopher Pappas
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By:
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Christopher Pappas
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Chairman, President and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this annual report on Form 10-K of The Chefs’ Warehouse, Inc.;
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2.
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Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and Rule 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Dated: February 24, 2020
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/s/ James Leddy
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By:
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James Leddy
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Chief Financial Officer
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(Principal Financial Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 24, 2020
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By:
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/s/ Christopher Pappas
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Christopher Pappas
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Chairman, President and Chief Executive Officer
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(Principal Executive Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 24, 2020
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By:
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/s/ James Leddy
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James Leddy
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Chief Financial Officer (Principal Financial Officer)
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