Performance Food Group Company

to PFG's fiscal year Q1 2025 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.

Thank you, Shelby, and good morning. We're here with George Holmes, PFG's CEO, and Patrick Hatcher, PFG's CFO. We issued a press release this morning regarding our 2025 fiscal first quarter results, which can be found in the investor relations section of our website at pfgc.com. During our call today, unless otherwise stated, we are comparing results to results in the same period in fiscal 2024. 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 in the back of the earnings release. 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.

Thanks, Bill. Good morning, everyone, and thank you for joining our call today. It has been a busy beginning to fiscal year 2025, as we have built business momentum, particularly in our food service segment, while closing two excellent acquisitions. This morning, I will discuss the early progress we have made on both Jose Santiago and Chaney Brothers, and then review some highlights from our fiscal first quarter. Patrick will then discuss our financial results and outlook for fiscal year 2025. I will then provide some closing comments before taking your questions. We are proud of how our organization has performed over the past three months. Our three segments have executed our strategy very well and produced strong results. The consumer landscape has provided some challenges, but I am pleased to report that we have started to see signs of stability that we believe could put us on a solid foundation for the remainder of the fiscal year. Before getting into more specifics on our business, I wanted to say a few words about our acquisition activity. As we discussed in August, we acquired Jose Santiago early in the fiscal year. Jose Santiago is a leading broad line food service distributor in Puerto Rico with good growth momentum and attractive margins. Over the past three plus months, We have worked diligently to integrate their business into PFG's food service operations. This process has gone extremely well, due largely to the hard work by the teams of both Jose Santiago and PFG. The team in Puerto Rico is proving to be an excellent cultural fit and has already contributed nicely to PFG's business results in the fiscal first quarter. In early October, we closed the Chaney Brothers acquisition. I'd like to thank the team at Chaney Brothers as well as PFG for the long hours put in to get this deal across the finish line. We were ready for the early close, raising $1 billion through the issuance of new notes during September, which allowed us to pay down a portion of our ABL facility and provided us with additional borrowing capacity to fund the acquisition. Patrick will discuss the financial details shortly. While it has only been one month since the close of the Chaney deal, we have already made a great deal of progress onboarding Cheney's organization. We welcome the roughly 3,600 associates from Cheney Brothers to PFT. The Southeast region, representing the majority of Cheney's operations, has experienced a difficult few months due to the hurricane activity. The focus of our organization has been first and foremost on the well-being of our associates. As a food service distributor, we also play an important role in the food supply chain. As an organization, we have been able to ship much needed food supplies across the southeastern United States and Puerto Rico. While it will take some time for these areas to fully rebuild, our businesses are fully operational and continuing to service our customers. I'm proud of the active role our company and associates played in assisting areas impacted by the storms. In addition to supporting organizations like the American Red Cross, Mercy Chefs, and World Central Kitchen, Our associates stepped up to help each other and the communities where they live and work by volunteering to provide supplies, food, and meals to first responders and those impacted. Looking ahead, we are incredibly excited about the opportunity Cheney Brothers brings to PFG. As discussed in August, Cheney's operations complement our legacy business. Cheney's strength in Florida, particularly with broad-line independent customers, enhances our existing business in the region. which use more towards the specialty area of the business. The Cheney Brothers distribution facility in North Carolina rounds out the portfolio, providing us with additional scale across the southeastern United States. Cheney Brothers assets, particularly their distribution facilities, are exceptionally high quality and state of the art. It is rare to find an asset that is operating at scale but still has room to grow. Cheney's excess capacity should enable us to accelerate growth build scale, and route density across the Southeast region. In August, we provided data showing the positive demographic profile of this region, which is available on our website. Cheney Brothers' high exposure to independent restaurants is reflected in constant sales growth, high profit per case, and EBITDA margin, well above PFG's corporate average. At the same time, we believe that Cheney's relatively low private brand penetration provides a very attractive opportunity to enhance both top line growth and margins. Our legacy food service operations have been incredibly successful at expanding our performance brand offerings to independent restaurants. In fiscal year 2014, performance brands represented just over 39% of independent brand share. In the most recent quarter, Performance brands represented nearly 53% of total sales to independent restaurants. Many of you are familiar with the Reinhardt acquisition and the value created from that transaction. Similar to Chaney, Reinhardt was under-penetrated in private brands. But in the years since we have owned the operation, we have been able to expand Reinhardt's private brand portfolio penetration to levels that are similar to legacy performance food service. we believe the private brand opportunity at Chaney is even larger. In fact, our integration strategy for Chaney is very similar to that of Reinhart. We believe we have acquired a very high quality asset that is on excellent growth trajectory. Our initial efforts were focused on integrating the organization while minimizing any impact to Chaney's associates, customers, and suppliers. Over time, we will share best practices across the two organizations and expect to accelerate sales and profit growth as a combined entity. Patrick will discuss some of our specific financial goals from the transaction in a moment. The Cheney Brothers transaction fits nicely with our total PFG strategy to continue to build upon a leading position in the food away from home space. Cheney is another high quality growth asset in the food service space and we are excited to add this organization to PFG. Food service is an important piece of the total PFG portfolio. However, what defines us are the additional avenues for growth, including Vistar and Cormark. The combination of these three units provides a powerful offering that we believe appeals to customers across the food away from home landscape. As our organization continues to grow both organically and through targeted M&A opportunities, PFG is increasingly a leader in the food away from home space. In late October, IFTA held its national championship event in Orlando, Florida. The event honored some of the industry's safest associates, allowing them to compete in a range of skill competitions. PFG had a fantastic showing, including 95 associates and over 300 PFG attendees, including family and friends to support the event. PFG's associates accepted a number of awards across multiple categories, within warehouse and transportation events. Four of our competitor's children were recognized for their essays detailing why their PFG parent was their hero. It's a great event and PFG is proud of participant in leading the industry forward. In October, our Cormark business displayed its strength in the convenience space at the National Association of Convenience Stores Conference. Cormark's offerings, not only in traditional center of the store convenience, but in food service products tailored to the convenience landscape set PFG apart. Our three segments are working together to create cross-selling opportunities that we believe will produce additional market share opportunities. Technology is an increasingly important part of our cross-segment collaboration and selling. One platform that we are particularly excited about is our customer first digital ordering application. We began discussing this initiative at our June 2022 Investor Day. Since then, we have expanded the offering across the organization and are seeing excellent progress. At PFG, we believe that our sales force should always be at the front line of our selling efforts, a key competitive advantage that has allowed our company to consistently gain market share. At the same time, we have continued to provide our sales team and our customers with the tools, resources, and knowledge to help them grow their businesses. Importantly, customer first will eventually be rolled out across all three business segments, allowing cross-selling opportunities that we believe will further enhance our value proposition. Overall, I am proud of our organization's performance and believe that we are well positioned to continue executing our growth strategy. I'll now turn it over to Patrick, who will review our financial performance and outlook. I will then return with some final comments on our quarter and the business environment.