The Chefs' Warehouse, Inc.

Greetings, and welcome to the Schepps Warehouse Start Quarter 2022 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 third quarter 2022 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. Those 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 are going to provide a business update and go over our third 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 third quarter 2022 earnings call. Customer demand was strong throughout the third quarter, and the cadence of business activity returned to seasonal shifts more typical of the pre-pandemic environment. Seasonal September strength due to return from vacations was complemented by a moderate increase in return to office activity in many of our larger markets. While product costs in aggregate remained relatively unchanged versus the second quarter of 22, pricing continues to be firm in most categories. We continue to see new openings and gradual increases in hotel, catering, and event-related business. A few highlights from the third quarter as compared to the third quarter of 2021 include 22.2% organic growth in net sales, Specialty sales were up 31.6% organically over the prior year, which was driven by unique customer growth of approximately 25.9%, placement growth of 42.1%, and specialty case growth of 18.3%. Organic pounds in center of the plate were approximately 11.6% higher than the prior year third quarter. Gross profit margins increased approximately 113 basis points. Gross margin in the specialty category decreased 133 basis points as compared to the third quarter of 2021, while gross margin in the center of the play category increased 238 basis points year over year. Jim will provide more detail on gross profit and margins in a few moments. During the third quarter, our team made progress on a number of key initiatives aimed at further integrating recent acquisitions and leveraging the CW platform to provide our sales teams and customers with a continually growing and diverse product portfolio while creating operational cost efficiencies in our delivery model. In New England, we have ramped up the cross-sell of Allen Brothers Northeast premium protein products on our specialty and produce trucks. This process reduces distribution costs and puts higher gross profit dollar boxes on our key Northeast routes. On the West Coast, we completed the fold-in of University Foods into our Los Angeles Distribution Center and have begun the process of expanding our distribution platform in the Northwest. We have signed the lease for a new facility in Portland, Oregon, and we expect to combine our legacy TW specialty operations with recently acquired Alexis Specialty Foods within the next two years. We look forward to accelerate growth in the region while creating operating leverage once the project is complete. In the Mid-Atlantic region, we have recently completed the retrofit of our Capital Seaboard Distribution Center with the capability to offer customers in the region more of Chef's Warehouse specialty and premium protein products, along with produce and seafood. In Texas, where our specialty business continues to grow rapidly, we are in the final stages of the build-out of our new Allen Brothers protein processing facility located in Dallas. We expect to begin operations in early 2023 bringing us closer to our Texas customer base and adding to our growth in the Lone Star State. I would like to thank all of our team members for their hard work, expertise, and dedication in delivering value for our supplier partners, customers, and colleagues during a successful third quarter. Our people are Chef's Warehouse's greatest asset, and together we look forward to continued growth for the remainder of 2022. as well as into 2023 and beyond. And 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?