The Chefs' Warehouse, Inc.

Greetings, and welcome to the Chef's Warehouse first quarter 2021 earnings conference call. As a reminder, this conference is being recorded. I would now like to turn the conference over to your hosts, Alex Aldis, General Counsel, Corporate Secretary, and Chief Government Relations Officer. Please go ahead, sir.

Thank you, operator. Good morning, everyone. With me on today's call are Chris Pappas, founder, chairman, and CEO, and Jim Letty, our CFO. By now, you should have access to our first quarter 2021 earnings press release. It can also be found at www.chefswarehouse.com under the investor relations section. Throughout this conference call, we will be presenting non-GAAP financial measures, including, among others, historical and estimated EBITDA and adjusted EBITDA, as well as both historical and estimated adjusted net income and adjusted earnings per share. These measurements are not calculated in accordance with GAAP and may be calculated differently in similarly titled non-GAAP financial measures used by other companies. Quantitative reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures appear in today's press release. Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements, including statements regarding our estimated financial performance. Such forward-looking statements are not guarantees of future performance, and therefore you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Some of these risks are mentioned in today's release. Others are discussed in our annual report on Form 10-K and quarterly reports on Form 10-Q, which are available on the SEC website. Today we are going to provide a business update and go over our first quarter results in detail. Then we will open up the call for questions. With that, I will turn the call over to Chris Pappas. Chris?

Thank you, Alex, and thank you all for joining our first quarter 2021 earnings call. As expected, January and February business activity were significantly impacted by the COVID-related restrictions implemented during the fourth quarter of 2020. Severe weather, especially in the Northeast, as well as continued customer menu compression due to the COVID environment, contributed to lower volumes during the quarter. Progress on vaccinations combined with easing restrictions in March led to a gradual weekly build in revenue, and we exited the quarter trending at approximately 75% of 2019 sales, inclusive of acquisitions added in 2020. Similar to our previous reporting, I will compare sales and gross margin results of the current quarter sequentially to the fourth quarter of 2020. Jim will provide the comparison to prior year in his comments later in the call. During the quarter, net sales were essentially flat versus the fourth quarter of 2020. While specialty sales decreased approximately 2% sequentially versus the fourth quarter of 2020, Average unique customers increased 0.8%, and we saw higher placements, approximately 4.7%. Specialty cases decreased 3.1% versus the fourth quarter of 2020, while center of the plate pounds sold were approximately 1.6% higher sequentially versus the fourth quarter of 2020. Gross profit margins increased approximately 13 basis points compared to the fourth quarter of 2020. Gross margin in the specialty category increased 358 basis points as compared to the fourth quarter of 2020, while gross margin in the center of the plate category decreased 330 basis points. Jim will provide more detail on gross margin and inflation in a few minutes. On April 23rd, we completed the acquisition of Foley Fish, located in New Bedford, Massachusetts. Foley distributes premium cut-to-order fresh and frozen seafood products to restaurants, hotels in the Boston metro area, and maintains a national distribution business similar in nature to Allen Brothers. We are extremely excited to add Laura Ramson and her team to the CW family of brands in operation. This acquisition introduces key talent, expertise, and premium brands to our growing seafood portfolio and categories. We look forward to further integrating our specialty produce and center-of-the-plate offerings in the New England and national markets going forward. During the first quarter, our team completed the implementation of our ERP front-end order entry system, at our West Coast operating centers, including Southern and Northern California and Las Vegas. We now have 100% of our legacy specialty business units live on the system, and the team will look to integrate Sid Wainer over the coming months. In addition, we rolled out mobile truck scanning to our L.A. and Northwest locations and completed an upgrade to our warehouse management systems company-wide. Now to move on to an update on recent business activity. Recent sales have been trending at approximately 79% of 2019 sales, inclusive of the acquisitions completed in the first quarter of 2020. Easing capacity restrictions combined with increasing outdoor dining and customer openings have led to a steady weekly improvement and business activity across our markets. Certain urban market segments where foot traffic is driven by office occupancy, events, and tourism continue to improve but at a slower pace than urban neighborhood segments and our broader regional markets. As we move towards further reopenings, capacity increases, events and celebrations, and more normalcy around social interaction, Our team at Chefs is engaged in supporting our customers and supplier partners in re-energizing the culinary world. Our recently announced Welcome Back campaign is just one example of utilizing the Chefs Warehouse platform to promote and reintroduce the amazing dining experiences our industry provides. While the environment remains challenging, we are focused on delivering the high-touch service and premium quality ingredients to our Chef customers as the world comes back. With that, I'll turn it over to Jim to discuss more detailed financial information for the quarter and an update on our liquidity. Jim?