US Foods Holding Corp.

Thank you for standing by. At this time, I would like to welcome everyone to the US Foods Q4 2022 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. Adam Dabrowski, Director of Investor Relations, you may begin your conference.

Thank you, Cheryl. Good morning, everyone, and welcome to U.S. Foods' fourth quarter and full-year fiscal 2022 earnings call. Speaking on the call today, we have Dave Flitman, Chief Executive Officer, Andrew Iacobucci, Chief Transition Officer, and Dirk Licatio, Chief Financial Officer. We will take your questions after our prepared remarks conclude. Please provide your name, your firm, and limit yourself to one question. Our earnings release, issued earlier this morning in today's presentation slides, can be accessed on the Investor Relations page of our website. During today's call, unless otherwise stated, we're comparing our fourth quarter and full year results to the same period in fiscal year 2021. In addition to historical information, certain statements made during today's call are considered forward-looking statements. Please review the risk factors in our 2022 Form 10-K. They will be filed later today for detailed discussion of these potential factors that could cause our actual results to differ materially from those anticipated in those statements. Lastly, during today's call, we will refer to certain non-GAAP financial measures. All reconciliations to the most comparable GAAP financial measures are included in the schedules on our earnings press release, as well as in the appendices and presentation slides posted on our website, that we are not providing reconciliations to forward-looking non-GAAP financial measures as indicated therein. Thank you for your interest in U.S. Foods, and I'll now turn over the call to Dave.

Thanks, Adam. Good morning, everyone, and thank you for joining us today. I am thrilled to be here as the new CEO of U.S. Foods. I joined this great company because of its strong reputation, significant future growth opportunity, strong culture, and talented team of 29,000 associates. I look forward to working with our team to build upon our accomplishments from last year in executing our long-range plan. Since I joined in early January, I've spent much of my first month touring our distribution centers in six of our larger markets across the country, listening to customers and associates, and diving deep to understand the U.S. foods business more thoroughly. While on the road, I met some talented and dedicated associates, many of them long-term veterans at U.S. Foods. In Oklahoma City, for example, I met Randy Kohler, who's been a delivery driver for our company for more than 29 years. Randy expects excellence and teams up to lead our safety backing courses and is a popular driver trainer. He's so good that he's been named Local Driver of the Year four times. His customers constantly rave about his professionalism and the extra mile with which he goes to serve them, which I was able to witness firsthand while riding with him on a seven-hour delivery route. Associates like Randy are one of the many reasons I am proud to be part of this great company. I also look forward to meeting many of our investors and analysts soon. I plan to spend my first three months formulating my views about our strengths and opportunities in further detail, after which I expect to begin sharing more specific thoughts. That said, I'm certainly starting to form some early opinions and perspectives at the six-week point. One early and important conclusion I've drawn is that U.S. Foods' long-range plan and the pillars within it are broadly the right areas of focus to ensure success. I would expect that any changes I will have in the near term would be adjustments aimed at accelerating execution versus any wholesale overhaul of the plan. Earnings growth from a combination of margin expansion and profitable volume growth outlined in our long-range plan is a good mix. The team has made great progress this past year. However, much opportunity remains, especially in supply chains. I expect that my more than 35 years of experience in distribution businesses across multiple industries will position me very well for the incredible opportunity to lead U.S. Foods and to help build upon and accelerate the tremendous progress the company has made this past year. Let me share some key highlights of that progress on page four. First, our team has been intensely focused on executing the U.S. Foods long-range plan, and it is shown in our results each quarter. Throughout 2022, we grew profitable share, further optimized gross margins, and improved operational efficiencies. We drove market share gains in each of our target customer types. We expanded gross margins with significant and durable gains in gross profit per case while managing through a very challenging operating environment where U.S. foods and the broader industry face supply chain staffing and turnover challenges. While the progress we made against our operating efficiency pillar is somewhat masked by a challenging macro environment, we have advanced critical initiatives in a number of areas, which Andrew and Dirk will highlight shortly. Second, we drove continued growth throughout the year thanks to the great work of our associates. Our fourth quarter results clearly demonstrate strong execution, with adjusted EBITDA increasing 34%. attributable to a combination of accelerating year over year case growth and continued margin expansion. Our progress in 2022 gives me immense confidence in our trajectory. Lastly, we remain focused on creating value for shareholders and allocating our capital prudently by continuing to invest in the business, reducing leverage to our target range, returning capital to shareholders through our share repurchase program, and opportunistically pursuing accretive tuck-in acquisitions. Andrew will walk through some of these progress points in more detail. Before I turn the call over to him, I want to thank him for stepping in as interim CEO last year, for his leadership to get the business on a strong trajectory heading into 2023, and for the support he's providing me as I onboard. A mark of a great company is its ability to deliver on its commitments, essentially doing what you say you're going to do. U.S. Foods did exactly that in the first year of our long-range plan. We finished 2022 with a strong fourth quarter, building on our achievements in the first three quarters and exceeding the high end of our adjusted EBITDA guidance for 2022. My expectation is that we will continue to build upon that momentum in 2023. With that, let me turn the call over to Andrew to share a bit more on our progress.