RIDGEFIELD, Conn., Feb. 15, 2023 (GLOBE NEWSWIRE) — The Chefs’ Warehouse, Inc. (NASDAQ: CHEF), a premier distributor of specialty food products in the United States, the Middle East, and Canada, today reported financial results for its fourth quarter ended December 30, 2022. The fiscal quarter ended December 30, 2022 consisted of 14 weeks as compared to the fiscal quarter ended December 24, 2021, which consisted of 13 weeks.
Financial highlights for the fourth quarter of 2022:
- Net sales increased 41.8% to $791.3 million for the fourth quarter of 2022 from $558.3 million for the fourth quarter of 2021.
- GAAP net income was $1.2 million, or $0.03 per diluted share, for the fourth quarter of 2022 compared to $8.4 million, or $0.22 per diluted share, in the fourth quarter of 2021.
- Adjusted net income per share1 was $0.48 for the fourth quarter of 2022 compared to $0.26 for the fourth quarter of 2021.
- Adjusted EBITDA1 was $50.1 million for the fourth quarter of 2022 compared to $30.2 million for the fourth quarter of 2021.
“Fourth quarter business activity continued the return to more normal seasonality heading into the year-end period as celebrations and event-related business continued to build upon emerging third quarter trends,” said Christopher Pappas, Chairman and Chief Executive Officer of the Company. “We are extremely proud of our team’s execution during the fourth quarter – especially their ability to overcome challenging weather across our markets in mid-to late December. Our people continued to drive the Chefs’ high-quality product and high-touch service model to our forty thousand plus customers and we are grateful to each and every one of them for contributing to a strong performance rounding out 2022.”
Fourth Quarter Fiscal 2022 Results
Net sales for the quarter ended December 30, 2022 increased 41.8% to $791.3 million from $558.3 million for the quarter ended December 24, 2021. Organic sales increased $126.6 million, or 22.7% versus the prior year quarter. Sales growth of $106.5 million, or 19.1%, resulted from acquisitions. The 14th week of the fiscal quarter ended December 30, 2022 was approximately 6.0% of quarterly sales. Organic case count increased approximately 19.1% in the Company’s specialty category with unique customers and placements increases at 18.9% and 14.5%, respectively, compared to the prior year quarter. Organic pounds sold in the Company’s center-of-the-plate category increased approximately 15.2% compared to the prior year quarter. Estimated inflation was 14.1% in the Company’s specialty categories and 0.4% in the center-of-the-plate categories compared to the prior year quarter.
Gross profit increased approximately 49.0% to $187.3 million for the fourth quarter of 2022 from $125.7 million for the fourth quarter of 2021. Gross profit margin increased approximately 116 basis points to 23.7% from 22.5%. Gross margin in the Company’s specialty category decreased 91 basis points and gross margin increased 133 basis points in the Company’s center-of-the-plate category compared to the prior year quarter.
Selling, general and administrative expenses increased by approximately 40.4% to $153.4 million for the fourth quarter of 2022 from $109.2 million for the fourth quarter of 2021. The increase was primarily due to higher costs associated with compensation and benefits, facility costs and fuel costs to support sales growth in the current quarter. As a percentage of net sales, operating expenses were 19.4% in the fourth quarter of 2022 compared to 19.6% in the fourth quarter of 2021.
Other operating expense increased by approximately $3.5 million primarily due to third-party deal costs incurred in connection with business acquisitions.
Operating income for the fourth quarter of 2022 was $29.8 million compared to $15.8 million for the fourth quarter of 2021. The increase in operating income was driven primarily by higher gross profit, partially offset by higher selling, general and administrative expenses and other operating expenses, as discussed above. As a percentage of net sales, operating income was 3.8% in the fourth quarter of 2022 as compared to operating income of 2.8% in the fourth quarter of 2021.
Total interest expense increased to $24.3 million for the fourth quarter of 2022 compared to $4.2 million for the fourth quarter of 2021. The increase was primarily due to a $14.1 million loss on debt extinguishment from the refinancing the Company’s senior convertible debt. Additionally, the Company had higher amounts of debt outstanding and increases in the variable portion of interest rates charged on its outstanding debt.
The Company’s effective tax rate for the fourth quarter of 2022 was approximately 78.6% due to the non-deductibility for tax purposes of the $14.1 million loss on debt extinguishment.
Net income for the fourth quarter of 2022 was $1.2 million, or $0.03 per diluted share, compared to net income of $8.4 million, or $0.22 per diluted share, for the fourth quarter of 2021.
Adjusted EBITDA1 was $50.1 million for the fourth quarter of 2022 compared to $30.2 million for the fourth quarter of 2021. For the fourth quarter of 2022, adjusted net income1 was $18.8 million, or $0.48 per diluted share compared to adjusted net income of $10.2 million, or $0.26 per diluted share for the fourth quarter of 2021.
Full Year 2023 Guidance
Based on current trends in the business, the Company is providing full year financial guidance as follows:
- Estimated net sales for the full year of 2023 will be in the range of $2.85 billion to $2.95 billion;
- Gross profit to be between $684.0 million and $708.0 million and
- Adjusted EBITDA to be between $180.0 million and $190.0 million
About The Chefs’ Warehouse
The Chefs’ Warehouse, Inc. (http://www.chefswarehouse.com) is a premier distributor of specialty food products in the United States and Canada focused on serving the specific needs of chefs who own and/or operate some of the nation’s leading menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores. The Chefs’ Warehouse, Inc. carries and distributes more than 55,000 products to more than 40,000 customer locations throughout the United States and Canada.
