In this file:
· Performance Food Group beat Q1 estimates
· Performance Food Group Company (PFGC) Q1 2020 Earnings Call Transcript
Performance Food Group beat Q1 estimates
About: Performance Food Group ... (PFGC)
By: Niloofer Shaikh, Seeking Alpha
Nov. 6, 2019
o Performance Food Group (PFGC +4.3%) reports total case volume rose 10.7% in Q1.
o Performance Foodservice net sales increased 7.8% to $3.93B, driven by an increase in cases sold, including independent case growth of 5.6% and solid independent customer demand for Performance Brands.
o Vistar net sales advanced 158.9% to $2.31B, driven by the acquisition of Eby-Brown and strong sales growth in the segment’s corrections, vending, theater and office coffee service channels.
o Gross margin rate declined 170 bps to 11.4%, reflects Eby-Brown’s lower margins.
o Operating margin rate slipped
Performance Food Group Company (PFGC) Q1 2020 Earnings Call Transcript
PFGC earnings call for the period ending September 30, 2019.
Motley Fool Transcribers
Nov 6, 2019
Performance Food Group Company (NYSE:PFGC)
Q1 2020 Earnings Call
Nov 6, 2019, 9:00 a.m. ET
Questions and Answers
Good day and welcome to the PFG Fiscal Year Q1 2020 Earnings Conference Call. [Operator Instructions]. I would now like to turn the call over to Michael Neese, Vice President, Investor Relations for PFG. Please go ahead, sir.
Michael Neese -- Vice President, Investor Relations
Thank you, Pasha [Phonetic] and good morning. We're here this morning with George Holm, PFG's CEO; and Jim Hope, Performance Food Group's CFO. We issued a press release regarding our 2020 fiscal first quarter results this morning. The results discussed in this call will include GAAP and non-GAAP results adjusted for certain items. The reconciliation of these non-GAAP measures to the corresponding GAAP measures can be found at the back of the earnings release. You can find our earnings release in the Investor Relations section of our website at pfgc.com.
Our remarks in the earnings release contain forward-looking statements and projections of future results. Please review the cautionary forward-looking statements section in today's earnings release and our SEC filings for various factors that could cause our actual results to differ materially from our forward-looking statements and projections.
And finally, our fiscal 2020 outlook does not include any benefit from the acquisition of Reinhart.
Now I'd like to turn the call over to George.
George L Holm -- President/CEO
Thanks, Michael. Good morning everyone and thanks for joining our call today. I'd like to go over a few first quarter business results. Jim will discuss our financial results and annual outlook in more detail and then finally, I'll provide a quick update on the Reinhart acquisition and then we will take your questions.
Now let's turn too our results. After successful fiscal 2019, we're pleased to share that our strong growth continued in the first quarter of fiscal year 2020. Total case volume increased by 10.7% driven by Eby-Brown broad based growth across Vistar's sales channels, 5.6% increase in independent cases and growth in Performance Brands. Our foodservice segment generated EBITDA growth of 13% driven by its customer-centric focus and continued strategic investments in both people and technology.
In fact the foodservice segment grew its EBITDA by double digits in the past two quarters and our fiscal 2020 Q1 represents our fourth consecutive quarter of sequential adjusted EBITDA growth. I think this demonstrates the strong execution of our Performance Foodservice team. The mid single independent case growth for the quarter was in line with our expectations. We are pleased to report that the trend is continuing into the early weeks of our second quarter. And this growth is quite strong against a backdrop of flat same-store sales growth for independent restaurants during the quarter. We continue to believe the overall health of independent restaurants remains strong.
Shifting to Vistar, we delivered another quarter of strong top and bottom line results fueled by broad-based growth across their sales channels. Also happy to report that Pat Hagerty and his team were recognized by the International Foodservice Manufacturers Association last night and given an excellence and distribution award. Based on our strong start to the year, we are pleased to increase our full-year adjusted EBITDA outlook. Jim will further discuss our outlook later during this call.
Let's turn to our two segments. For the first quarter, net sales for Vistar increased 158.9% to $2.3 billion compared to the prior year period. This increase was driven by the acquisition of Eby-Brown and sales growth in the segments of corrections, vending, theater and office coffee.
First quarter EBITDA for Vistar increased 63% to $51.5 million versus the prior year period. Gross profit dollar growth of 67.1% in the quarter was fueled by the acquisition of Eby-Brown than an increase in the number of cases sold. Our Eby-Brown business integration continues to go well. There have been some modest operating cost savings realized immediately post close. The teams are working on developing more opportunities over time. One thing that is quite exciting is that performance Foodservice and Eby-Brown develop two new Foodservice programs for the convenience retail trade, and we debut these programs at the NACS Industry Trade Show in October in Atlanta.
The programs had very high levels of interest among our customers. We believe this acquisition will allow PFG's Vistar segment to strategically expand in the fast-growing convenience store channel where there are significant opportunities to use PFG brands for unique solutions and what is today a $40 billion convenience Foodservice market. We believe our strategic growth investments in people and technology are paying off and continue to be on track to support our long-term objectives as demonstrated by the consistent financial results in both the Foodservice and Vistar business segments.
Each quarter during these calls, we like to highlight one associate who goes above and beyond to serve our customers and colleagues. In September, one of our Performance Foodservice truck drivers was among 200 stranded motorists in Southeast Texas when tropical storm Imelda made landfall. Our CDL delivery driver named, Reggie McCoy, who was on his way to deliver food and staples to a customer called his manager and got support to share what was on his truck with the stranded motorists. He had from water to milk to paper goods. With the assistance of another driver who had a grill, Reggie served up chicken wings, chips and more to feed those who would not have had anything to eat during what ended up being a multi-day road closure.
I think it was great that Reggie had the confidence to call and ask for permission to do that and that the transportation supervisor was comfortable to approve that. With that, I'm going to turn things over to Jim and he will give you more detail on our first quarter.
Jim Hope -- Chief Financial Officer ...