The Chefs' Warehouse, Inc.

Greetings and welcome to the Chef's Warehouse 4th Quarter 2024 Earnings Conference Call. As a reminder, this conference has been 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 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, adjusted EBITDA, adjusted net income, adjusted earnings per share, adjusted operating expenses, net debt leverage, and free cash flow. These measures 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. and fourth quarter 2024 earnings presentation. 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 disclosed 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 fourth quarter results in detail. For a portion of our discussion this morning, we will refer to a few slides posted on the Chef's Warehouse website under the investor relations section titled Fourth Quarter 2024 Earnings Presentation. Please note that these slides are disclosed at this time for illustration purposes only. Then we will open up the call for questions. With that, I will turn the call over to Chris Pappas. Chris?

Thank you, Alex. Thank you all for joining our fourth quarter 2024 earnings call. Business activity and demand remain consistently strong through the fourth quarter amidst a healthy environment for our core upscale casual to higher-end dining customer base. Our teams across domestic and international markets provided excellent product and service amidst a busy holiday season and delivered the first $1 billion-plus revenue quarter in Chef's Warehouse history and strong growth in gross profit dollars in March. During the quarter, we continued growing market share over the year with strong year-over-year growth and unique item placement and new customer acquisition. I'd like to thank the entire CEPPS Warehouse team for their dedication and commitment in delivering a strong 2024 for our team members, our customers and supply partners, and our shareholders. Now, please refer to slide three of the presentation. A few highlights from the fourth quarter include 8.7% growth in net sales, Specialty sales were up 11.5% over the prior year, which was driven by unique customer growth of approximately 4.5%, placement growth of 12.3%, and specialty case growth of 6.1%. Pounds in the center of the plate were approximately 3.6% higher than the prior year fourth quarter. Gross profit margins increased approximately 23 basis points. Gross margin in the specialty category increased approximately 22 basis points as compared to the fourth quarter of 2023, while gross margin in the center of the plate category decreased approximately seven basis points year over year. Jim will provide more detail on gross profit margins in a few moments. Now, please refer to slide four Chart 1 provides a full year 2024 update to gross profit dollars per route as compared to 2019. Chart 2 provides full year 2024 adjusted operating expense as a percentage of gross profit dollar improvement by 24 basis points versus 2023 and 92 basis points versus 2019. Full year 2024 adjusted EBITDA per employee increased 13% versus 2023 and 18% versus 2019. Now please refer to slide five. The charts here display the progression of customer orders coming via our digital platform, which include orders coming via mobile and website. Investments in our digital platform continue to contribute to margin enhancement as our team drives both online order adoption growth, enhancements to customer-facing functionality, and improved real-time data analytics supporting our sales teams. As of the fourth quarter of 2024, approximately 56% of customers ordering through our domestic specialty locations are online versus 48% in 2023 and 20% at year end 2019. Now please refer to slide six. Slide six plays the five key areas that our teams are focused on in order to deliver our expectation of continued above industry average top line gross profit dollar and adjusted EBITDA growth as well as targeted incremental adjusted EBITDA margin improvement over the next four years. We look forward to expanding more on each of these areas at our investor day this coming March. 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?