Performance Food Group Company

Good day and welcome to PFG's fiscal year Q4 2020 earnings conference call. If you would like to ask a question at the conclusion of the prepared remarks, please press the star key followed by the number one on your telephone keypad at any time. I would now like to turn the call over to Bill Marshall, Vice President, Investor Relations for PFG. Please go ahead, sir.

Bill Marshall Thank you, Laurie, and good morning. We're here with George Holm, PFG's CEO, and Jim Hope, PFG's CFO. We issued a press release regarding our 2020 fiscal fourth quarter and full year results this morning. The results discussed on this call will include GAAP and non-GAAP results adjusted for certain items. The reconciliation of these non-GAAP measures to the corresponding GAAP measures can be found at the back of the earnings release. You can find our earnings release in the Investor Relations section of our website at pfgc.com. Our remarks on this call and in the earnings release contain forward-looking statements and projections of future results. Please review the cautionary forward-looking statement section in today's earnings release and our SEC filings for various factors that could cause our actual results to differ materially from our forward-looking statements and projections. Now, I'd like to turn the call over to George.

With the close of our fiscal year, we can reflect on what has been an extraordinary 12 months for Performance Food Group. There is a great deal for our organization to be proud of. We started the year announcing the transformative acquisition of Rinehart, while still welcoming the E.B. Brown organization into the Performance Food Group family. To finance Rinehart, we did successful equity and bond offerings in the fall, and on December 30th, we closed the Rinehart transaction, working quickly to integrate that business. We also welcomed new members to our leadership team and board of directors. Performance Food Group accomplished a great deal in the first eight months of our fiscal year 2020. Our team continued to increase organic penetration and grow our independent and private brand cases. In short, through February, Performance Food Group was having an outstanding year. We all know what happened shortly after that as the world began to lock down to slow the spread of COVID-19 and the pandemic. While the landscape was shifting for everyone, our associates and the customers we serve kept moving forward. PST moved quickly to help our customers adapt to the new reality while taking appropriate steps to cut costs, reduce our inventory levels, look for new lines of business, and keep our associates safe and healthy. As volume rebounded, we brought back some of our furloughed workforce to match the rising demand. We will continue to keep a close eye on our operating expenses and our labor force as we move through this period of recovery. Of course, we will also invest in our business to assist our customers and drive additional market share. During the fiscal fourth quarter, we also completed multiple successful capital raises to strengthen our balance sheet. Jim will provide more detail on our liquidity and financial strength in a moment. The restaurant industry has always been resilient and innovative. The dedication we have seen recently has been impressive, but not a surprise. Many restaurants quickly pivoted to keep their business running. Takeout and delivery services took on a new level of importance, and curbside pickup became a new revenue stream for many of our customers. The creativity and agility of the restaurateur has never been more evident. Meanwhile, PFT has been right by their side, helping with new business concepts, redesigning menus, and most importantly, getting our customers the products they need. Our leadership made the strategic decision to continue to support our strong sales force. reinforcing our efforts to help our existing customers and win new streams of business. We believe this decision has paid off considerably in the fiscal fourth quarter. Our total food service dollar sales were well ahead of the total industry. And this outperformance was apparent across a range of customer accounts with particular strength in pizza, Italian, and Mexican town sets. Our organic independent cases during the fiscal fourth quarter declined 25.8% outpacing our total company organic case decline of 34.2%. Including Reinhart, our independent case volume was almost flat, down just 0.8%, compared to a total company case decline of 11.5%. Many of you have asked why our results in the independent channel are holding up so well. While there are several factors at play, I will highlight a few things that we believe set our organization apart. First, we believe the hands-on support of our experienced and well-trained sales force during the critical time for our customers when they need help more than ever before, we got rewarded with market share gains from our sales people. Second, we made the strategic decision to accept shipments from our suppliers at the height of the crisis. This meant that we had product to sell to meet customer demand and our suppliers were able to keep their supply chain moving. Third, our mix of business, and in particular our strength in pizza and Italian has provided a nice tailwind. We believe that the mix of business for our food service segment positions us well in the current environment. The results have been very encouraging. In fact, during the fourth quarter of fiscal 20, a greater percentage of our independent case volume came from new independent accounts and legacy food service businesses. that in any previous quarter since our IPO in 2015. We believe that this reflects significant outperformance compared to the overall independent channel. Last quarter we also discussed adding over 400 new locations of chain business which has now been fully integrated. We continue to look for profitable new business both in the independent channel as well as in chains. Our VINSTAR business has also begun to see some improvement though the channels they serve were, and in many cases continue to be, some of the hardest hit. And particularly, we expect movie theaters to begin reopening over the next few weeks, and the office coffee service space continues to be impacted by many people working from home. The retail value and corrections channels were relative bright spots for the business. We're hopeful that business will improve over the balance of the year, though we are prepared for an extended period of lower sales for Vistar. In late June, we provided a look at our weekly sales trends. Today, we are providing the same data for the weeks through August 8th. Despite the several states reinstituting restrictive conditions on the restaurant industry, our weekly sales results have held steady through July and early August. Our total organic sales are running at about a negative 12.5% clip. Our food service organic sales have been in the low All of this has been going on. We have continued to successfully integrate the Reinhart organization. We're very pleased with the progress so far in our tracking on or ahead of schedule in all the areas we measure. We continue to feel confident in the amount and timing of the synergy targets that we laid out at the deal announcements. These are extraordinary times, and I am proud of how PFG Associates are going the extra mile to care for our customers and our communities. We have many examples of how our divisions are giving back to their communities, such as our Vistar Mid-Atlantic location, donating six truckloads of products to hospitals in Philadelphia and New Jersey to support frontline health care workers. Today, I'm happy to highlight the following individuals for an act of heroism, an act of kindness, and an amazing accomplishment. I want to start with Nick Trikovich, one of our Area Managers for Performance Food Service Chicago. Nick demonstrated true heroism, jumping into action when he spotted a local building on fire. Nick called 911 and alerted the building occupants before using fire extinguishers to fight the blaze until the fire department arrived. Next, I want to recognize Wayne Hyde, a 24-year-old veteran driver with our Performance Food Group Customized Division in Florida. After a long shift delivering more than 1,000 cases to 10 locations, Wayne exemplified our value of putting people first. He stepped in to help a driver stranded with a flat tire and earned the gratitude of the young driver's family for his act of kindness. I want to highlight the dedication of our essential responders who are working onsite every day to ensure our customers receive the service they need and have come to expect from us. I want to call out Rob Sandquist from Reinhart & Marshall, for recently achieving an amazing milestone of picking 400,000 cases without an error. I am thankful for all PFG associates who are working so hard to keep the food supply chain strong for our customers and our communities. As I said in our last earnings webcast, I continue to believe that we will emerge from this period as a stronger company in many ways. Our sales force is engaged in seizing market share opportunities every day. We are steadfast in our commitment to reduce our cost base to protect our long-term profit growth. Meanwhile, we're in a very strong capital position to both weather the current situation and thrive as the market recovers. The industry we serve is vital to this country's food supply chain and is working diligently to adapt to new realities. We are proud of the role we play in this endeavor. I would like to thank all of our associates, the drivers and warehouse workers, who are on the front lines to our sales force who are working hard to helping existing customers and build new lines of business and gain market share to the individuals who manage our inventory, finances, and so much more. I've never felt that engagement of ourselves and the strength of our partnerships up and down the supply chain. With that, I'm going to turn things over to Jen who will give you more detail on our fourth quarter and financial positions.