The Chefs' Warehouse, Inc.

Greetings and welcome to the Chef's Warehouse Second Quarter 2024 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 of and Jim Letty, our CFO. By now, you should have access to our second quarter 2024 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 second 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 second quarter 2024 earnings call. Second quarter, customer demand and pricing displayed typical seasonality as revenue and profitability continued to build as expected, moving from a solid first quarter into a seasonally stronger second quarter months. Our operating divisions across domestic and international markets delivered strong, unique customer and item placement growth and managed pricing effectively while providing our customers with high quality product and high value service. We are extremely proud of all our teams from sales, sourcing, pricing, operations and support functions coming together to deliver value to our customers. leveraging our diverse and broad supply chain, value add, processing, and culinary expertise to assist our customers with managing menu development as well as product and labor-related costs. A few highlights from the second quarter include 7.2% organic growth in net sales. Specialty sales were up 7.5% organically over the prior year, which was driven by unique customer growth of approximately 8.2%, placement growth of 11.3%, and specialty case growth of 4.7%. Excluding prior year low-margin customer attrition in Hardee's, total specialty cases grew approximately 5.5% year-over-year in the second quarter. Organic pounds in center of the plate were approximately 2.9% higher than the prior year second quarter. Gross profit margins increased approximately 35 basis points. Gross margin in the specialty category increased approximately 50 basis points as compared to the second quarter of 2023, while gross margin in the center of the plate category were essentially flat year over year. Jim will provide more detail on gross profit and margins in a few moments. We remain focused on making progress towards our five-year goals, which include 2028 revenue of approximately 4.6 billion to 5 billion and adjusted EBITDA of 300 to 350 million. It is important to highlight the key investments we have put in place to provide our teams with the market footprint product categories, infrastructure, and investment, and sales force necessary to grow towards achieving these targets. Regarding infrastructure, since 2019, we have added approximately 1 million square feet of distribution capacity, excluding acquisitions, or approximately a 60% increase to the 2019 baseline. These include investments in future growth in high-value markets, such as the expansion of our distribution centers in Dubai, Seattle, Southern California, and Florida. This also includes facility expansion to create future operating synergies, such as our recently completed protein processing facility in Northern California. During the second quarter, we initiated processing operations and completed the first phase of a multiple facility consolidation with the move of our Brisbane processing and distribution operation. We expect to complete the next move during the third quarter with the focus on completing the full consolidation during the first quarter of 2025. We expect to provide route, labor, and technology-driven efficiencies with room for future growth in the region. Regarding our investments in sales and our unique go-to-market strategies, since year-end 2021, we have increased our sales force, excluding acquisitions, by approximately 10% per year. Over the same timeframe, in certain of our high-growth investment markets, such as Florida, the Middle East, and California, we have grown our sales force by approximately 20% to 25% per year on average. In addition, We continue to invest in category expertise and digital and pricing tools across our markets to support our sales and operating teams' execution and growing market share via unique item penetration, new customer acquisition, and improved gross profit dollars per delivery. Our investments in acquisitions, categories, infrastructure, and sales teams have given us the marketing and distribution footprint required for growth, towards our 2028 goals. We feel we have a balanced portfolio of high-growth markets supported by ample capacity, maturing sales teams with our unique go-to-market strategy complemented by more mature markets focused on category expansion and continued above-average industry growth. For the past 40 years, we have developed a moat in our niche of the food service industry by investing in and developing the talent and expertise to sell the world's finest chefs, to be logistically nimble and best in class to manage just-in-time service, and to manage price and margins in a volatile world. We have built a culture and strategy designed to be the unique food service solution company focused on serving quality culinary-driven operators. 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?