Richmond, VIrginia, May 5 - Performance Food Group announced results today for the first quarter ended March 29, 2008.
Net earnings were $4.3 million and EPS was $0.12 per share diluted.
Adjusted net earnings increased 30% versus prior year quarter’s net earnings to $9.0 million, excluding facility closing and merger-related costs in 2008.
Adjusted EPS increased 25% versus prior year quarter’s EPS to $0.25 per share diluted, excluding facility closing and merger-related costs in 2008.
“The Company’s adjusted net earnings growth showed solid improvement this quarter,” commented Steve Spinner, president and chief executive officer of Performance Food Group. “Despite the current economic challenges, our progress in this first quarter underscores PFG’s continued execution of our core strategies.”
First Quarter Financial Highlights:
Consolidated net sales in the first quarter were approximately $1.7 billion, an increase of approximately 9%, compared to the prior year quarter. Inflation was approximately 6% for the quarter. Adjusted net earnings in the first quarter amounted to approximately $9.0 million, which was an increase of 30% compared to net earnings of $6.9 million for the same quarter in the previous year. Adjusted net earnings exclude the after-tax impact of one-time costs of $2 million associated with closing our Magee, Mississippi broadline location and $2.6 million of costs related to the pending merger with an affiliate of The Blackstone Group and Wellspring Capital Management LLC. Including these items, net earnings were approximately $4.3 million for the current year quarter. Adjusted net earnings per share in the first quarter, excluding the impact of the one-time costs discussed above, increased approximately 25% to $0.25 per share diluted, compared to net earnings per share of $0.20 per share diluted for the same quarter in 2007. Net earnings per share diluted were $0.12 for the current year quarter including the impact of the facility closing and merger-related costs. “In our customized segment, net sales increased approximately 14% in the first quarter as compared to the same period in the prior year,” added Mr. Spinner. “This reflects the impact of the previously announced O’Charley’s business that was added in late 2007 and the Joe’s Crab Shack business added during the first quarter of 2008. Inflation in our customized segment was approximately 5% for the quarter.
“Overall net sales in broadline increased 6% in the first quarter compared to the same prior year period, reflecting continued inflation, offset by the planned exit of certain business associated with the closing of our Magee facility. Our sales force is concentrated on improving our mix of higher margin street sales, and our operations team remains dedicated to improving productivity in our broadline warehouses. Inflation in the broadline segment was approximately 7% for the quarter.”
Mr. Spinner concluded, “Performance Food Group delivered solid results in the first quarter of 2008, despite slower industry growth and higher fuel and food costs. We continue to focus on leveraging our scale and growing street sales. Our balance sheet remained very strong and free cash flow for the quarter was approximately $8.1 million. Based on the current economic environment and business trends and excluding merger-related costs and costs associated with the closing of our Magee, Mississippi broadline location, we continue to expect full year 2008 earnings per share diluted to be within the range we have previously disclosed.”
Performance Food Group announced on April 14, 2008 that a record date and special meeting date have been established for the Company’s shareholders to consider and vote on the proposal to approve the previously announced agreement and plan of merger.
Performance Food Group shareholders of record at the close of business on April 3, 2008 will be entitled to notice of the special meeting and to vote on the proposal. The special meeting is scheduled to be held Wednesday, May 14, 2008 at 9 a.m. (EDT) at Performance Food Group’s corporate offices located at 12500 West Creek Parkway, Richmond, Virginia.
Consummation of the merger is subject to receipt of approval from Performance Food Group’s shareholders, as well as satisfaction of other customary closing conditions, and the merger is expected to be completed by the end of the second quarter of 2008.
Performance Food Group markets and distributes more than 68,000 national and private label food and food-related products to over 41,000 restaurants, hotels, cafeterias, schools, healthcare facilities and other institutions.