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The Chefs’ Warehouse reports fourth quarter 2018 financial results

The Chefs’ Warehouse, Inc., a premier distributor of specialty food products in the United States and Canada, has reported financial results for its fourth quarter ended December 28, 2018.

Financial highlights for the fourth quarter of 2018 compared to the fourth quarter of 2017:

  • Net sales increased 10.3% to $394.1 million for the fourth quarter of 2018 from $357.1 million for the fourth quarter of 2017.
  • GAAP net income was $8.9 million, or $0.30 per diluted share, for the fourth quarter of 2018 compared to net income of $9.5 million, or $0.35 per diluted share, in the fourth quarter of 2017.
  • Adjusted net income per diluted share1 was $0.32 for the fourth quarter of 2018 compared to $0.23 for the fourth quarter of 2017.
  • Adjusted EBITDA was $24.6 million for the fourth quarter of 2018 compared to $22.0 million for the fourth quarter of 2017.

“We are pleased with our performance in the fourth quarter which included solid revenue, new customer and gross profit growth,” said Chris Pappas, chairman and chief executive officer of The Chefs’ Warehouse, Inc. “In 2019 and beyond, we will look to continue to grow existing and new markets, expand product categories and implement technology focused on improving efficiency in our operations and enhancing customer experience. We believe we are well positioned to continue to be the food industry’s most nimble and dynamic last-mile source of fine ingredients to chef-driven independent restaurants.”

Fourth Quarter Fiscal 2018 Results

Net sales for the quarter ended December 28, 2018 increased 10.3% to $394.1 million from $357.1 million for the quarter ended December 29, 2017. Organic growth contributed $19.5 million, or 5.4%, to sales growth in the quarter. The remaining sales growth of $17.5 million, or 4.9%, resulted from acquisitions. Organic case count grew approximately 6.5% in the Company’s specialty category with unique customers and placements growth at 5.9% and 4.4%, respectively, compared to the prior year quarter. Pounds sold in the Company’s center-of-the-plate category increased 4.9% compared to the prior year quarter. Estimated inflation was 0.2% in the Company’s specialty categories and estimated inflation was 0.9% in the center-of-the-plate categories compared to the prior year quarter.

Gross profit increased approximately 11.2% to $102.3 million for the fourth quarter of 2018 from $92.0 million for the fourth quarter of 2017. Gross profit margin increased approximately 20 basis points to 26.0% from 25.8%, due in large part to deflation in certain center-of-the-plate categories. Gross margins in the Company’s specialty category decreased 93 basis points and gross margins increased 135 basis points in the Company’s center-of-the-plate category compared to the prior year quarter.

Total operating expenses increased by approximately 10.3% to $84.5 million for the fourth quarter of 2018 from $76.6 million for the fourth quarter of 2017.  As a percentage of net sales, operating expenses were relatively unchanged at 21.4% in the fourth quarter of 2018 compared to 21.5% in the fourth quarter of 2017.

Operating income for the fourth quarter of 2018 was $17.8 million compared to $15.3 million for the fourth quarter of 2017. The increase in operating income was driven primarily by increased gross profit, offset in part by higher operating expenses, as discussed above. As a percentage of net sales, operating income was 4.5% in the fourth quarter of 2018 compared to 4.3% in the fourth quarter of 2017.

Total interest expense increased to $5.7 million for the fourth quarter of 2018 compared to $5.3 million for the fourth quarter of 2017 due primarily to the write off of $1.1 million in deferred financing fees associated with the re-pricing of our Term Loan, partially offset by lower effective interest rates charged on the Company’s outstanding debt and the conversion of the 36.8 million of convertible subordinated notes during the third quarter of 2018.

Net income for the fourth quarter of 2018 was $8.9 million, or $0.30 per diluted share, compared to net income of $9.5 million, or $0.35 per diluted share, for the fourth quarter of 2017.

To view full financial release, click here.

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