The Chefs' Warehouse, Inc.

Greetings, and welcome to the Chef's Warehouse Fourth Quarter 2021 Earnings Conference Call. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, 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 fourth 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 and 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're going to provide a business update and go over our fourth 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 fourth quarter 2021 earnings call. Revenue trends were strong in the fourth quarter as we saw continued growth in consumer confidence and dining out across our markets. December sales and business activity grew steadily as holiday customer traffic drove sequential volume increases, commensurate with pre-COVID periods, even with the reduction in larger corporate parties and events. Similar to our previous reporting, I will compare sales and gross margin results of the current quarter sequentially to the third quarter of 2021. Jim will provide the comparison to prior year in his comments later in the call. During the quarter, Net sales increased approximately 15.3% versus the third quarter of 2021. Specialty sales increased approximately 12% sequentially versus the third quarter of 2021, with average unique customers increasing 4.5%, and we saw higher placements of approximately 7%. Specialty cases increased 9% versus the third quarter of 2021, while center of the plate pounds sold were approximately 5.6% higher sequentially versus the third quarter of 2021, excluding the impact of acquisitions. Gross profit margins were 22.5% in the fourth quarter, compared to 22.7% in the third quarter of 2021, and total gross profit dollars increased 14.3% versus the third quarter. Jim will provide more detail on gross margin inflation in a few minutes. On December 27, 2021, we closed the purchase of Capital Seaboard, a premier provider of produce and seafood to their growing customer base in the mid-Atlantic region. We are excited to have Larry Quinn and his entire team join the chef's family of companies and brands. Moving forward, we will look to leverage capital's high-touch and high-quality business model to both complement and enhance our specialty and protein presence in this key market. Regarding recent business activity, as is the case across most of the food industry, January is seasonally the weakest month of the year in terms of revenue generation and business activity. While we experienced little observed impact on sales in the fourth quarter due to the emergence of the Omicron variant, it did appear customer traffic was somewhat impacted the first few weeks of January. However, our performance to date has been in line with our expectations and is reflected in our full year 2022 guidance. 2021 was a year that reinforced the resiliency and importance of the food away from home industry. The reopening of our larger markets during the summer of 2021, followed by steady growth and profitability during the second half of the year, displayed the continued strength in consumer demand for dining out, catered events, and virtually all forms of social interaction associated with the culinary experience our customers provide. While the labor and supply chain dynamics coming out of the reopening were certainly a challenge, We are incredibly proud of the entire Chef's Warehouse team for coming together and developing commercial, operational, and delivery solutions that allowed us to provide the high touch, high quality, and premium product service levels our customers have come accustomed to. We look forward to continued growth while providing the finest ingredients to current and future customers and the coming generations of chefs in 2022 and beyond. 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?