CHEFS' WAREHOUSE, INC.
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the quarterly period ended
March 28, 2025
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the transition period from _________ to _________
Commission file number:
001-35249
THE
CHEFS’ WAREHOUSE, INC.
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
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(Address of principal executive offices)
Registrant’s telephone number, including area code: (
203
)
894-1345
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
☒
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☒
Number of shares of common stock, par value $.01 per share, outstanding at April 25, 2025:
40,683,508
1
THE CHEFS’ WAREHOUSE, INC.
FORM 10-Q
Table of Contents
| Page | |||||||||||||||||
| PART I. FINANCIAL INFORMATION | |||||||||||||||||
| Item 1. | |||||||||||||||||
| Item 2. | |||||||||||||||||
| Item 3. | |||||||||||||||||
| Item 4. | |||||||||||||||||
| PART II. OTHER INFORMATION | |||||||||||||||||
| Item 1. | |||||||||||||||||
| Item 1A. | |||||||||||||||||
| Item 2. | |||||||||||||||||
| Item 3. | |||||||||||||||||
| Item 4. | |||||||||||||||||
| Item 5. | |||||||||||||||||
| Item 6. | |||||||||||||||||
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2
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Statements in this report regarding the business of The Chefs’ Warehouse, Inc. (the “Company”) that are not historical facts are “forward-looking statements” that involve risks and uncertainties and are based on current expectations and management estimates; actual results may differ materially. Words such as “anticipates”, “expects”, “predicts”, “contemplates”, “projects”, “forecasts”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “could”, “should”, “will”, “may”, “would” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and/or could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The risks and uncertainties which could impact these statements include, but are not limited to the following: our success depends to a significant extent upon general economic conditions, including disposable income levels and changes in consumer discretionary spending; the relatively low margins of our business, which are sensitive to inflationary and deflationary pressures and intense competition; changes in our credit profile and any effect they may have on our relationships with suppliers; the effects of rising costs for and/or decreases in supply of commodities, ingredients, packaging, other raw materials, distribution and labor; price reductions by our manufacturers of products that we sell which could cause the value of our inventory to decline or our customers to demand lower sales prices; fuel cost volatility and its impact on distribution, packaging and energy costs; our continued ability to promote our brand successfully, to anticipate and respond to new customer demands, and to develop new products and markets to compete effectively; our ability and the ability of our supply chain partners to continue to operate distribution centers and other work locations without material disruption, and to procure ingredients, packaging and other raw materials when needed despite disruptions in the supply chain or labor shortages; risks associated with the expansion of our business; our possible inability to identify new acquisitions or to integrate recent or future acquisitions, or our failure to realize anticipated revenue enhancements, cost savings or other synergies from recent or future acquisitions; other factors that affect the food industry generally, including: recalls if products become adulterated or misbranded, liability if product consumption causes injury, ingredient disclosure and labeling laws and regulations and the possibility that customers could lose confidence in the safety and quality of certain food products; new information or attitudes regarding diet and health or adverse opinions about the health effects of the products we distribute; dependence on independent certifications for products; changes in disposable income levels and consumer purchasing habits; competitors’ pricing practices and promotional spending levels; fluctuations in the level of our customers’ inventories and credit and other related business risks; and the risks associated with third-party suppliers, including the risk that any failure by one or more of our third-party suppliers to comply with food safety or other laws and regulations may disrupt our supply of raw materials or certain products or injure our reputation; our ability to recruit and retain senior management and a highly skilled and diverse workforce; unanticipated expenses, including, without limitation, litigation or legal settlement expenses, adverse judgments, or impairment charges; the cost and adequacy of our insurance policies; the impact and effects of public health crises, pandemics and epidemics and the adverse impact thereof on our business, financial condition, and results of operations; economic and other developments, or events, including adverse weather conditions, in the culinary markets in which we operate; information technology system failures, cybersecurity incidents, or other disruptions to our use of technology and networks; our ability to realize the benefits we anticipate from investments in information technology; our ability to protect our intellectual property; significant governmental regulation and any potential failure to comply with such regulations; changing rules, public disclosure regulations and stakeholder expectations on ESG-related matters; federal, state, provincial and local tax rules in the United States and the foreign countries in which we operate, including tax reform and legislation; climate change or the legal, regulatory or market measures being implemented to address climate change; the concentration of ownership among our existing executive officers, directors and their affiliates which may prevent new investors from influencing significant corporate decisions; risks relating to our substantial indebtedness; our ability to raise additional capital and/or obtain debt or other financing, on commercially reasonable terms or at all; our ability to meet future cash requirements, including the ability to access financial markets effectively and maintain sufficient liquidity; the effects of currency movements in the jurisdictions in which we operate as compared to the U.S. dollar; the effects of international trade disputes, tariffs, quotas and other import or export restrictions on our international procurement, sales and operations; other factors discussed elsewhere in this report
and in our other public filings with the Securities and Exchange Commission (“SEC”).
Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, as such, speak only as of the date made. A more detailed description of these and other risk factors is contained in the Company’s most recent Annual Report on Form 10-K filed with the SEC on February 25, 2025 and other reports, including this Quarterly Report on Form 10-Q, filed by the Company with the SEC since that date. The Company is not undertaking to update any information in the foregoing reports until the filing or effective dates of its future reports required by applicable laws.
3
PART I FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THE CHEFS’ WAREHOUSE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands, except share data)
| March 28, 2025 | December 27, 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ |
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$ |
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Accounts receivable, net of allowances ($
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| Inventories |
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| Prepaid expenses and other current assets |
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| Total current assets |
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| Property and equipment, net |
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| Operating lease right-of-use assets |
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| Goodwill |
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| Intangible assets, net |
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| Other assets |
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| Total assets | $ |
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$ |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ |
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$ |
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| Accrued liabilities |
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| Short-term operating lease liabilities |
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| Accrued compensation |
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| Current portion of long-term debt |
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| Total current liabilities |
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| Long-term debt, net of current portion |
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| Operating lease liabilities |
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| Deferred taxes, net |
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| Other liabilities |
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| Total liabilities |
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| Commitments and contingencies |
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| Stockholders’ equity: | |||||||||||
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Preferred Stock - $
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Common Stock - $
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| Additional paid-in capital |
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| Accumulated other comprehensive loss |
(
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(
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| Retained earnings |
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| Total stockholders’ equity |
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| Total liabilities and stockholders’ equity | $ |
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$ |
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See accompanying notes to the condensed consolidated financial statements.
4
THE CHEFS’ WAREHOUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
(Amounts in thousands, except share and per share amounts)
| Thirteen Weeks Ended | |||||||||||
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March 28,
2025 |
March 29,
2024 |
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| Net sales | $ |
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$ |
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| Cost of sales |
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| Gross profit |
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| Selling, general and administrative expenses |
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| Other operating expenses, net |
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| Operating income |
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| Interest expense |
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| Income before income taxes |
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| Provision for income tax expense |
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| Net income | $ |
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$ |
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| Other comprehensive (loss) income: | |||||||||||
| Foreign currency translation adjustments |
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(
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| Comprehensive income | $ |
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$ |
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| Net income per share: | |||||||||||
| Basic | $ |
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$ |
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| Diluted | $ |
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$ |
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| Weighted average common shares outstanding: | |||||||||||
| Basic |
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| Diluted |
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See accompanying notes to the condensed consolidated financial statements.
5
THE CHEFS’ WAREHOUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
(Amounts in thousands, except share amounts)
| Common Stock |
Additional
Paid-in Capital |
Accumulated
Other Comprehensive Loss |
Retained
Earnings
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Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| Balance December 27, 2024 |
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$ |
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$ |
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$ |
(
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$ |
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$ |
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$ |
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| Net income | — | — | — | — |
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— | — |
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| Stock compensation | — | — |
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— | — | — | — |
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| Warrants exercised |
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— | — | — | — | — | — |
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| Cumulative translation adjustment | — | — | — |
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— | — | — |
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| Common stock issued under stock plans, net of shares surrendered to pay tax withholding |
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(
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— | — | — | — |
(
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| Balance March 28, 2025 |
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$ |
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$ |
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$ |
(
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$ |
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$ |
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$ |
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| Common Stock |
Additional
Paid-in Capital |
Accumulated
Other Comprehensive Loss |
Retained
Earnings
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Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| Balance December 29, 2023 |
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$ |
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$ |
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$ |
(
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$ |
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$ |
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$ |
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| Net income | — | — | — | — |
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— | — |
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| Stock compensation | — | — |
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— | — | — | — |
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| Common stock repurchased | — | — | — | — | — |
(
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(
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(
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| Warrants exercised |
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(
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— | — | — | — |
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| Cumulative translation adjustment | — | — | — |
(
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— | — | — |
(
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| Common stock issued under stock plans, net of shares surrendered to pay tax withholding |
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(
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— | — | — | — |
(
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| Balance March 29, 2024 |
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$ |
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$ |
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$ |
(
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$ |
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(
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$ |
(
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$ |
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See accompanying notes to the condensed consolidated financial statements.
6
THE CHEFS’ WAREHOUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
| Thirteen Weeks Ended | |||||||||||
| March 28, 2025 | March 29, 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ |
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$ |
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| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization |
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| Amortization of intangible assets |
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| Provision for allowance for credit losses |
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| Provision for deferred income taxes |
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| Loss on debt extinguishment |
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| Stock compensation |
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| Change in fair value of contingent earn-out liabilities |
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(
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| Non-cash interest and other operating activities |
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| Changes in assets and liabilities, net of acquisitions: | |||||||||||
| Accounts receivable |
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| Inventories |
(
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| Prepaid expenses and other current assets |
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(
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| Accounts payable, accrued liabilities and accrued compensation |
(
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(
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| Other assets and liabilities |
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(
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| Net cash provided by operating activities |
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| Cash flows from investing activities: | |||||||||||
| Capital expenditures |
(
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(
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| Cash paid for acquisitions, net of cash acquired |
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(
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| Net cash used in investing activities |
(
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(
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| Cash flows from financing activities: | |||||||||||
| Payment of debt and other financing obligations |
(
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(
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| Payment of finance leases |
(
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(
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| Common stock repurchases |
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(
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| Surrender of shares to pay withholding taxes |
(
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(
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| Cash paid for contingent earn-out liability |
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(
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| Payments under asset-based loan facility |
(
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| Net cash used in financing activities |
(
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(
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| Effect of foreign currency on cash and cash equivalents |
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| Net change in cash and cash equivalents |
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(
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| Cash and cash equivalents-beginning of period |
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| Cash and cash equivalents-end of period | $ |
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$ |
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See accompanying notes to the condensed consolidated financial statements.
7
THE CHEFS’ WAREHOUSE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Amounts in thousands, except share and per share amounts)
Note 1 -
Operations and Basis of Presentation
Description of Business and Basis of Presentation
The Chefs’ Warehouse, Inc. (the “Company”), and its wholly-owned subsidiaries, is a distributor of specialty food and center-of-the-plate products in the United States, the Middle East and Canada. The Company is focused on serving the specific needs of chefs who own and/or operate restaurants, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores.
The Company’s quarterly periods end on the thirteenth Friday of each quarter. Every six to seven years, the Company will add a fourteenth week to its fourth quarter to more closely align its year-end to the calendar year.
Consolidation
The unaudited condensed consolidated financial statements include all the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Unaudited Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements and the related interim information contained within the notes to such unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules of the Securities and Exchange Commission (“SEC”) for interim information and quarterly reports on Form 10-Q. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 27, 2024 filed as part of the Company’s Annual Report on Form 10-K (the “2024 Form 10-K”).
The unaudited condensed consolidated financial statements appearing in this Form 10-Q have been prepared on the same basis as the audited consolidated financial statements included in the Company’s 2024 Form 10-K, and in the opinion of management, include all normal recurring adjustments that are necessary for the fair statement of the Company’s interim period results. The year-end consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by GAAP. Due to seasonal fluctuations and other factors, the results of operations for the thirteen weeks ended March 28, 2025 are not necessarily indicative of the results to be expected for the full year.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from management’s estimates.
8
Note 2 –
Summary of Significant Accounting Policies
Revenue Recognition
The following table presents the Company’s net sales disaggregated by principal product category:
| Thirteen Weeks Ended | |||||||||||||||||||||||
| March 28, 2025 | March 29, 2024 | ||||||||||||||||||||||
| Center-of-the-Plate | $ |
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% | $ |
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% | |||||||||||||||
| Specialty: | |||||||||||||||||||||||
| Dry Goods |
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% |
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% | |||||||||||||||||
| Produce |
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% |
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% | |||||||||||||||||
| Pastry |
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% |
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% | |||||||||||||||||
| Cheese and Charcuterie |
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% |
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% | |||||||||||||||||
| Dairy and Eggs |
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% |
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% | |||||||||||||||||
| Oils and Vinegars |
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% |
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% | |||||||||||||||||
| Kitchen Supplies |
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% |
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% | |||||||||||||||||
| Total Specialty | $ |
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% | $ |
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% | |||||||||||||||
| Total net sales | $ |
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% | $ |
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% | |||||||||||||||
The Company determines its product category classification based on how the Company currently markets its products to its customers. The Company’s definition of its principal product categories may differ from the way in which other companies present similar information. Net sales by product category includes estimates of product mix for certain locations that are not yet fully integrated into the Company’s sales reporting system as of the reporting date.
Food Processing Costs
Share Repurchases
Recent Accounting Pronouncements
Induced Conversions of Convertible Debt Instruments
: In November 2024, the Financial Accounting Standards Board (“FASB”) issued guidance which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The guidance is effective for fiscal years beginning after December 15, 2025, and interim periods within that fiscal year. Early adoption is permitted. The impact of this guidance is dependent on future induced conversions, if any, of the Company’s convertible debt instruments.
Disaggregation of Income Statement Expenses:
In November 2024, the FASB issued guidance to require disclosure in the notes to the financial statements of certain categories of expenses that are included on the face of the income statement, including purchases of inventory, employee compensation and depreciation and amortization, as well as additional disclosure about selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods for fiscal years beginning after December 15, 2027 on a prospective basis. Early adoption is permitted. The Company expects to adopt this guidance when effective and is evaluating the impact of adoption on its consolidated financial statements, which is limited to financial statement disclosures.
9
Improvements to Income Tax Disclosures
: In December 2023, the FASB issued guidance designed to improve the transparency and usefulness of income tax disclosures. The amendments include provisions to address the consistency of the income tax rate reconciliation and requirement to disaggregate income taxes paid by jurisdiction. The guidance was effective for the Company as of December 28, 2024 and the new disclosure requirements will be effective in the Company’s Annual Report on Form 10-K for the fiscal year ending December 26, 2025. The impact of the guidance is limited to financial statement disclosures.
Note 3 –
Net Income per Share
Basic net income per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share adjusts basic net income per share for all the potentially dilutive shares outstanding during the period. When the Company’s convertible notes are dilutive, interest on the convertible notes, net of tax, is added back to net income in order to calculate diluted earnings available to common shareholders.
The following table sets forth the computation of basic and diluted net income per common share:
| Thirteen Weeks Ended | |||||||||||
| March 28, 2025 | March 29, 2024 | ||||||||||
| Net income per share: | |||||||||||
| Basic | $ |
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$ |
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| Diluted | $ |
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$ |
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| Weighted average common shares: | |||||||||||
| Basic |
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| Diluted |
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Reconciliation of net income per common share:
| Thirteen Weeks Ended | |||||||||||
| March 28, 2025 | March 29, 2024 | ||||||||||
| Numerator: | |||||||||||
| Net income | $ |
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$ |
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| Add effect of dilutive securities | |||||||||||
| Interest on convertible notes, net of tax |
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| Net income available to common shareholders | $ |
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$ |
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| Denominator: | |||||||||||
| Weighted average basic common shares outstanding |
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| Dilutive effect of unvested common shares |
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| Dilutive effect of stock options and warrants |
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| Dilutive effect of convertible notes |
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| Weighted average diluted common shares outstanding |
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|||||||||
Potentially dilutive securities that have been excluded from the calculation of diluted net income per common share because the effect is anti-dilutive are as follows:
| Thirteen Weeks Ended | |||||||||||
| March 28, 2025 | March 29, 2024 | ||||||||||
| Restricted share awards (“RSAs”) and restricted stock units (“RSUs”) |
|
|
|||||||||
| Convertible notes |
|
|
|||||||||
10
Note 4 –
Fair Value Measurements
Assets and Liabilities Measured at Fair Value
The Company’s contingent earn-out liabilities are measured at fair value. These liabilities were estimated using Level 3 inputs. The fair value of contingent consideration was predominantly determined based on a probability-based approach which includes projected results, percentage probability of occurrence and the application of a discount rate to present value the payments. A significant change in projected results, discount rate, or probabilities of occurrence could result in a significantly higher or lower fair value measurement. Changes in the fair value of contingent earn-out liabilities are reflected in
other operating expenses, net
on the condensed consolidated statements of operations.
Contingent earn-out liabilities of $
750
as of March 28, 2025 and December 27, 2024 are reflected as
accrued liabilities
on the Company’s condensed consolidated balance sheets. Contingent earn-out liability payments in excess of the acquisition date fair value of the underlying contingent earn-out liability are classified as operating activities on the Company’s condensed consolidated statements of cash flows and all other such payments are classified as financing activities.
Fair Value of Financial Instruments
The carrying amounts reported in the Company’s condensed consolidated balance sheets for accounts receivable and accounts payable approximate fair value due to their immediate to short-term nature. The fair values of the asset-based loan facility and term loan approximated their book values as of March 28, 2025 and December 27, 2024, as these instruments had variable interest rates that reflected current market rates available to the Company and are classified as Level 2 fair value measurements.
The following table presents the carrying value and fair value of the Company’s convertible notes and its unsecured note issued in connection with the acquisition of Oakville Produce Partners, LLC (“GreenLeaf”) in fiscal 2023 (“GreenLeaf Note”). The fair value of the Company’s 2028 Convertible Senior Notes was based on bid/ask quotes as of or near the balance sheet date. The fair value of the GreenLeaf Note was determined based upon observable market prices of similar debt instruments.
| March 28, 2025 | December 27, 2024 | |||||||||||||||||||||||||
| Fair Value Hierarchy | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||||
| 2028 Convertible Senior Notes | Level 2 | $ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||||||
| GreenLeaf Note | Level 2 | $ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||||||
Note 5 –
Inventories
Note 6 –
Property and Equipment
Property and equipment is net of accumulated depreciation and amortization of $
161,333
and $
147,902
at March 28, 2025 and December 27, 2024, respectively.
Note 7 –
Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill are presented as follows:
| Carrying amount as of December 27, 2024 | $ |
|
|||
| Foreign currency translation |
|
||||
| Carrying amount as of March 28, 2025 | $ |
|
|||
11
Note 8 –
Debt Obligations
Debt obligations as of March 28, 2025 and December 27, 2024 consisted of the following:
|
Weighted Average Effective Interest Rate at March 28, 2025
|
Maturity | March 28, 2025 | December 27, 2024 | ||||||||||||||||||||
| Senior secured term loans |
|
% | August 2029 | $ |
|
$ |
|
||||||||||||||||
| 2028 Convertible senior notes |
|
% | December 2028 |
|
|
||||||||||||||||||
| Asset-based loan facility |
|
% | March 2027 |
|
|
||||||||||||||||||
| Finance leases and other financing obligations |
|
% | Various |
|
|
||||||||||||||||||
| Unamortized deferred costs |
(
|
(
|
|||||||||||||||||||||
| Total debt obligations |
|
|
|||||||||||||||||||||
| Less: current installments |
(
|
(
|
|||||||||||||||||||||
| Total long-term debt | $ |
|
$ |
|
|||||||||||||||||||
Senior Secured Term Loan Credit Facility
In March 2024, the Company entered into an amendment (“Eleventh Amendment”) to its senior secured term loan agreement, which reduced the interest rate spread on its senior secured term loan facility. As a result of this amendment, the Company incurred a loss on debt extinguishment of $
50
during the thirteen weeks ended March 29, 2024, which represents the portion of unamortized deferred financing fees attributable to the lender that exited the loan syndicate. Arrangement fees of $
775
and third-party transaction costs of $
91
were expensed as incurred during the thirteen weeks ended March 29, 2024 and included in
interest expense
and
other operating expenses
, respectively,
within the Company’s condensed consolidated statements of operations.
Additionally, during the thirteen weeks ended March 29, 2024, the Company made voluntary principal prepayments totaling $
6,000
towards the senior secured term loan. In connection with the prepayments, the Company wrote-off unamortized deferred financing fees of $
239
during the thirteen weeks ended March 29, 2024, which were included in
interest expense
within the Company’s condensed consolidated statements of operations.
Convertible Notes
The net carrying value of the Company’s 2028 convertible senior notes as of March 28, 2025 and December 27, 2024 was:
| March 28, 2025 | December 27, 2024 | |||||||||||||||||||||||||||||||||||||
| Principal Amount | Unamortized Deferred Costs | Net Amount | Principal Amount | Unamortized Deferred Costs | Net Amount | |||||||||||||||||||||||||||||||||
| 2028 Convertible Notes | $ |
|
$ |
(
|
$ |
|
$ |
|
$ |
(
|
$ |
|
||||||||||||||||||||||||||
The components of interest expense on the Company’s convertible notes were as follows:
| Thirteen Weeks Ended | |||||||||||
| March 28, 2025 | March 29, 2024 | ||||||||||
| Coupon interest | $ |
|
$ |
|
|||||||
| Amortization of deferred costs and premium |
|
|
|||||||||
| Total interest | $ |
|
$ |
|
|||||||
As of March 28, 2025, the Company had reserved $
37,575
of its asset-based loan facility for the issuance of letters of credit and funds totaling $
162,425
were available for borrowing.
12
Note 9 –
Stockholders’ Equity
Equity Awards
The following table reflects the activity of RSAs and RSUs during the thirteen weeks ended March 28, 2025:
| Time-based | Performance-based | Market-based | ||||||||||||||||||||||||||||||||||||
| Shares |
Weighted Average
Grant Date Fair Value |
Shares |
Weighted Average
Grant Date Fair Value |
Shares |
Weighted Average
Grant Date Fair Value |
|||||||||||||||||||||||||||||||||
| Unvested at December 27, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||||||||||||||||||||||
| Granted |
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
| Vested |
(
|
|
(
|
|
(
|
|
||||||||||||||||||||||||||||||||
| Forfeited |
(
|
|
(
|
|
|
|
||||||||||||||||||||||||||||||||
| Unvested at March 28, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||||||||||||||||||||||
The Company granted
756,163
RSAs and RSUs to its employees and directors at a weighted average grant date fair value of $
63.55
during the thirteen weeks ended March 28, 2025. These awards are a mix of time-, market- and performance-based grants that generally vest over a range of periods up to
five years
. The Company recognized expense on its RSAs and RSUs totaling $
4,121
and $
3,590
during the thirteen weeks ended March 28, 2025 and March 29, 2024, respectively.
No
share-based compensation expense has been capitalized.
At March 28, 2025, the total unrecognized compensation cost for unvested RSAs and RSUs was $
36,692
and the weighted-average remaining period was approximately
2.1
years. Of this total, $
21,261
related to awards with time-based vesting provisions and $
15,431
related to awards with performance- and market-based vesting provisions. At March 28, 2025, the weighted-average remaining period for time-based vesting and performance-based vesting RSAs and RSUs were approximately
1.9
years and
2.3
years, respectively.
Performance-Based Restricted Share Units
In February 2025, the Company’s Board of Directors approved a grant of a total of
541,375
performance-based restricted share units (“PSUs”) to certain of the Company’s officers and employees under the Company’s 2019 Omnibus Equity Incentive Plan. The PSUs, which have a
four-year
term from the date of grant, are subject to service and performance conditions and will only become vested and payable to the extent that a qualifying change in control occurs during the
four-year
period. The fair value of these awards was $
16,056
at March 28, 2025, which was determined using a Monte Carlo simulation in order to model a range of possible future stock prices for the Company’s common stock.
No
share-based compensation expense has been recorded in fiscal 2025 for these PSUs.
Share Repurchase Program
In November 2023, the Company announced a
two-year
share repurchase program in an amount up to $
100,000
.
The remaining share purchase authorization was $
82,617
at March 28, 2025. The Company is not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time.
Note 10 –
Income Taxes
The Company’s effective tax rate was
17.6
% and
30.0
% for the thirteen weeks ended March 28, 2025 and March 29, 2024, respectively. The effective tax rate for the thirteen weeks ended March 28, 2025 reflects the annual effective tax rate estimated for the full fiscal year, adjusted for a discrete item related to a tax benefit from the vesting of stock awards during the period. The effective tax rate otherwise varies from the 21% statutory rate primarily due to state taxes and permanent adjustments.
As a result of a five year carryback allowed under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the
Company carried back its 2020 federal income tax loss, which resulted in a income tax refund receivable of $
26,240
as of March 28, 2025. The receivable is reflected in
prepaid expenses and other current assets
on the Company’s condensed consolidated balance sheet.
13
The Organization for Economic Co-operation and Development (the “OECD”) introduced a framework under Pillar Two which includes a global corporate minimum tax rate of 15%. Some jurisdictions in which the Company operates have started to enact laws implementing Pillar Two, including Canada which enacted the rule in June 2024. The Company is monitoring these developments and currently does not believe the rules effective in fiscal 2025 will have a material impact on its consolidated financial statements.
Note 11 –
Segment Information
The Company’s business consists of
three
operating segments: East, Midwest and West that aggregate into
one
reportable segment, foodservice distribution, which is concentrated primarily in the United States.
The accounting policies of the foodservice distribution segment are the same as those for the consolidated company. The Company’s chief operating decision maker, who is the Company’s chief executive officer, uses gross profit as the measure of profit or loss to assess segment performance and allocate resources.
Consolidated gross profit, reported on the statement of operations and comprehensive income, is used to evaluate whether to reinvest profits into the foodservice distribution segment or into other parts of the entity, such as for acquisitions or to repurchase its common shares. Additionally, gross profit is used to monitor budget versus actual results and in competitive analysis by benchmarking to the Company’s competitors. Consolidated total assets, reported on the balance sheet, is the measure of segment assets.
The following table presents information about the Company’s foodservice distribution segment:
| Thirteen Weeks Ended | |||||||||||
| March 28, 2025 | March 29, 2024 | ||||||||||
| Net sales | $ |
|
$ |
|
|||||||
| Less: | |||||||||||
|
Cost of sales - non-production costs
(1)
|
|
|
|||||||||
|
Cost of sales - food processing costs
(2) (3)
|
|
|
|||||||||
| Cost of sales |
|
|
|||||||||
| Gross profit | $ |
|
$ |
|
|||||||
(1)
Non-production costs represent the net purchase price paid for products sold, plus the cost of transportation necessary to bring the product to the Company’s distribution facilities. Non-production costs include purchase incentives and product purchase credits from certain vendors.
(2)
Food processing costs include but are not limited to, direct labor and benefits, applicable overhead and depreciation of equipment and facilities used in food processing activities.
(3)
Food processing costs included $
261
and $
336
of depreciation expense for the thirteen weeks ended March 28, 2025 and March 29, 2024, respectively.
Note 12 –
Supplemental Disclosures of Cash Flow Information
| Thirteen Weeks Ended | |||||||||||
| March 28, 2025 | March 29, 2024 | ||||||||||
| Supplemental cash flow disclosures: | |||||||||||
| Cash paid for income taxes | $ |
|
$ |
|
|||||||
| Cash paid for interest, net of cash received |
|
|
|||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | $ |
|
$ |
|
|||||||
| Operating cash flows from finance leases |
|
|
|||||||||
| ROU assets obtained in exchange for lease liabilities: | |||||||||||
| Operating leases | $ |
|
$ |
|
|||||||
| Finance leases |
|
|
|||||||||
14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided as a supplement to the accompanying condensed consolidated financial statements and footnotes to help provide an understanding of our financial condition, changes in our financial condition and results of operations. The following discussion should be read in conjunction with information included in our Annual Report on Form 10-K for the fiscal year ended December 27, 2024 (the “2024 Form 10-K”) filed with the SEC. Unless otherwise indicated, the terms “Company”, “Chefs’ Warehouse”, “we”, “us” and “our” refer to The Chefs’ Warehouse, Inc. and its subsidiaries. All dollar amounts included in the tables in the following discussion are presented in thousands.
Business Overview
We are a premier distributor of specialty foods in the leading culinary markets in the United States, the Middle East and Canada. We offer more than 88,000 stock-keeping units (“SKUs”), ranging from high-quality specialty foods and ingredients to basic ingredients and staples and center-of-the-plate proteins. We serve more than 50,000 core customer locations, primarily located in our 23 geographic markets across the United States, the Middle East and Canada, and the majority of our customers are independent restaurants and fine dining establishments. We also sell certain of our center-of-the-plate products directly to consumers through our Allen Brothers subsidiary.
RESULTS OF OPERATIONS
| Thirteen Weeks Ended | |||||||||||
| March 28, 2025 | March 29, 2024 | ||||||||||
| Net sales | $ | 950,748 | $ | 874,488 | |||||||
| Cost of sales | 724,753 | 665,052 | |||||||||
| Gross profit | 225,995 | 209,436 | |||||||||
| Selling, general and administrative expenses | 202,763 | 190,321 | |||||||||
| Other operating expenses, net | 497 | 3,112 | |||||||||
| Operating income | 22,735 | 16,003 | |||||||||
| Interest expense | 10,253 | 13,244 | |||||||||
| Income before income taxes | 12,482 | 2,759 | |||||||||
| Provision for income tax expense | 2,194 | 828 | |||||||||
| Net income | $ | 10,288 | $ | 1,931 | |||||||
15
Thirteen Weeks Ended March 28, 2025 Compared to Thirteen Weeks Ended March 29, 2024
Net Sales
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Net sales | $ | 950,748 | $ | 874,488 | $ | 76,260 | 8.7 | % | |||||||||||||||
Net sales increased due to organic growth as there was no impact from acquisitions. Case count increased approximately 5.7% in our specialty category. In addition, unique customers and placements in our specialty category increased 4.5% and 7.7%, respectively, compared to the prior year period. Pounds sold in our center-of-the-plate category decreased 1.3% compared to the prior year. Estimated inflation was 4.8% in our specialty category and 5.9% in our center-of-the-plate category compared to the prior year period.
Gross Profit
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Gross profit | $ | 225,995 | $ | 209,436 | $ | 16,559 | 7.9 | % | |||||||||||||||
| Gross profit margin | 23.8 | % | 23.9 | % | |||||||||||||||||||
Gross profit dollars increased primarily as a result of increased sales and price inflation. Gross profit margin decreased approximately 18 basis points. Gross profit margins increased 6 basis points in the Company’s specialty category and decreased 83 basis points in the Company’s center-of-the-plate category.
Selling, General and Administrative Expenses
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Selling, general and administrative expenses | $ | 202,763 | $ | 190,321 | $ | 12,442 | 6.5 | % | |||||||||||||||
| Percentage of net sales | 21.3 | % | 21.8 | % | |||||||||||||||||||
The increase in selling, general and administrative expenses was primarily due to higher costs associated with compensation and benefits, facilities and distribution to support sales growth and higher depreciation expense driven by facility investments. Our ratio of selling, general and administrative expenses to net sales decreased 50 basis points due to sales growth combined with certain benefits derived from our investments in our facility and distribution operations.
Other Operating Expenses, Net
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Other operating expenses, net | $ | 497 | $ | 3,112 | $ | (2,615) | (84.0) | % | |||||||||||||||
Other operating expenses, net decreased by $2.6 million primarily due to lower employee severance charges incurred in the current quarter compared to the prior year quarter.
Interest Expense
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Interest expense | $ | 10,253 | $ | 13,244 | $ | (2,991) | (22.6) | % | |||||||||||||||
Interest expense decreased primarily due to lower aggregate principal amounts of debt outstanding and lower interest rates in the current quarter compared to the prior year quarter.
16
Provision for Income Tax Expense
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Provision for income tax expense | $ | 2,194 | $ | 828 | $ | 1,366 | 165.0 | % | |||||||||||||||
| Effective tax rate | 17.6 | % | 30.0 | % | |||||||||||||||||||
The Company’s effective tax rate was 17.6% and 30.0% for the thirteen weeks ended March 28, 2025 and March 29, 2024, respectively. The effective tax rate for the thirteen weeks ended March 28, 2025 reflects the annual effective tax rate estimated for the full fiscal year, adjusted for a discrete item related to a tax benefit from the vesting of stock awards during the period.
LIQUIDITY AND CAPITAL RESOURCES
We finance our day-to-day operations and growth primarily with cash flows from operations, borrowings under our senior secured credit facilities and other indebtedness, operating leases, trade payables and equity financing.
Indebtedness
The following table presents selected financial information on our indebtedness:
| March 28, 2025 | December 27, 2024 | ||||||||||
| Senior secured term loan | $ | 259,250 | $ | 260,000 | |||||||
| Convertible senior notes | 287,500 | 287,500 | |||||||||
| Borrowings outstanding on asset-based loan facility | 100,000 | 120,000 | |||||||||
| Finance leases and other financing obligations | 67,583 | 52,673 | |||||||||
Financing Transactions
During the thirteen weeks ended March 29, 2024, we made voluntary principal prepayments of $6.0 million towards the senior secured term loan.
In November 2023, we announced a two-year share repurchase program in an amount up to $100.0 million, targeting $25.0 million to $100.0 million of share repurchases by the end of fiscal 2025. During the thirteen weeks ended March 29, 2024, we repurchased 134,553 shares of our common stock at an average purchase price of $37.16 per share. The share repurchases were funded by our available cash. There were no share repurchases during the thirteen weeks ended March 28, 2025. The remaining share purchase authorization was $82.6 million at March 28, 2025. We are not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time.
Liquidity
The following table presents selected financial information on liquidity:
| March 28, 2025 | December 27, 2024 | ||||||||||
| Cash and cash equivalents | $ | 116,530 | $ | 114,655 | |||||||
|
Working capital
(1)
,
excluding cash and cash equivalents
|
311,226 | 327,992 | |||||||||
| Availability under asset-based loan facility | 162,425 | 146,674 | |||||||||
(1)
We define working capital as current assets less current liabilities.
We expect our capital expenditures, excluding cash paid for acquisitions, for fiscal 2025 will be approximately $40.0 million to $50.0 million. We believe our existing balances of cash and cash equivalents, working capital and the availability under our asset-based loan facility, are sufficient to satisfy our working capital needs, capital expenditures, debt service and other liquidity requirements associated with our current operations over the next twelve months.
17
Cash Flows
The following table presents selected financial information on cash flows:
| Thirteen Weeks Ended | |||||||||||
| March 28, 2025 | March 29, 2024 | ||||||||||
| Net cash provided by operating activities | $ | 49,566 | $ | 30,900 | |||||||
| Net cash used in investing activities | (12,344) | (17,381) | |||||||||
| Net cash used in financing activities | (35,412) | (21,252) | |||||||||
Our cash provided by operating activities is predominately driven by net sales to our customers. Our cash used in operating activities is primarily driven by our payments to suppliers for our inventory, employee compensation, payments to support our facilities, our distribution network, interest on our indebtedness, payments to tax authorities and other general corporate expenditures. Net cash provided by operations was $49.6 million for the thirteen weeks ended March 28, 2025 compared to $30.9 million for the thirteen weeks ended March 29, 2024. The increase in cash provided by operating activities was primarily due to sales growth, lower cash paid for interest, lower other operating expenses and improvements in working capital management.
Net cash used in investing activities was $12.3 million for the thirteen weeks ended March 28, 2025, driven by capital expenditures.
Net cash used in financing activities was $35.4 million for the thirteen weeks ended March 28, 2025 driven by $20.0 million of payments under our revolving credit facilities, $11.4 million paid for shares surrendered to pay tax withholding related to the vesting of equity incentive plan awards, $3.3 million of finance lease payments and $0.8 million of payments of term loan debt.
Recent Accounting Pronouncements
Information related to new accounting guidance is included in Note 1 “Operations and Basis of Presentation” to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
18
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
Our exposure to interest rate market risk relates primarily to our long-term debt. As of March 28, 2025, we had aggregate indebtedness outstanding of $359.3 million that bore interest at variable rates. A 100 basis point increase in market interest rates would decrease our after-tax earnings by approximately $2.6 million per annum, holding other variables constant.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of March 28, 2025.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended March 28, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are involved in legal proceedings, claims and litigation arising out of the ordinary conduct of our business. Although we cannot assure the outcome, management presently believes that the result of such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on our condensed consolidated financial statements, and no material amounts have been accrued in our condensed consolidated financial statements with respect to these matters.
ITEM 1A. RISK FACTORS
There have been no material changes to our risk factors as previously disclosed in Part I, Item 1A. included in our Annual Report on Form 10-K for the year ended December 27, 2024. In addition to the information contained herein, you should consider the risk factors disclosed in our Annual Report on Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES
Issuer Purchases of Equity Securities
|
Total Number
of Shares
Repurchased
(1)
|
Average
Price Paid Per Share |
Total
Number of Shares
Purchased as Part
of Publicly
Announced Plans
or Programs
(2)
|
Approximate
Dollar Value of
Shares That May
Yet Be Purchased
Under the Plans
or Programs (in thousands)
(2)
|
|||||||||||||||||||||||
| December 28, 2024 to January 24, 2025 | — | $ | — | — | $ | 82,617 | ||||||||||||||||||||
| January 25, 2025 to February 21, 2025 | — | — | — | 82,617 | ||||||||||||||||||||||
| February 22, 2025 to March 28, 2025 | 180,139 | 63.33 | — | 82,617 | ||||||||||||||||||||||
| Total | 180,139 | $ | 63.33 | — | $ | 82,617 | ||||||||||||||||||||
(1)
Represents withholding of 180,139 shares of our common stock during the thirteen weeks ended March 28, 2025 to satisfy tax withholding requirements related to restricted shares of our common stock awarded to our officers and key employees
19
resulting from either elections under 83(b) of the Internal Revenue Code of 1986, as amended, or upon vesting of such awards.
(2)
In November 2023, we announced a two-year share repurchase program in an amount up to $100.0 million targeting $25.0 million to $100.0 million of share repurchases by the end of fiscal 2025.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements
During the quarterly period covered by this report, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act, of 1934, as amended)
adopted
,
terminated
or modified any contract, instruction or written plan for the purchase or sale of the Company’s common stock that was intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K).
20
ITEM 6. EXHIBITS
| Exhibit No. | Description | |||||||
|
10.1
†
|
Amendment No. 7, dated as of March 12, 2025, to the ABL Facility. | |||||||
| Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
| Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
| Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
| Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
| 101.INS | XBRL Instance Document – the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
| † | Filed herewith | |||||||
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on April 30, 2025.
| THE CHEFS’ WAREHOUSE, INC. | |||||||||||
| (Registrant) | |||||||||||
| Date: April 30, 2025 | /s/ James Leddy | ||||||||||
| James Leddy | |||||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial Officer) | |||||||||||
| Date: April 30, 2025 | /s/ Timothy McCauley | ||||||||||
| Timothy McCauley | |||||||||||
| Chief Accounting Officer | |||||||||||
| (Principal Accounting Officer) | |||||||||||
22
TABLE OF CONTENTS
Part I Financial InformationItem 1. Condensed Consolidated Financial StatementsNote 1 - Operations and Basis Of PresentationNote 2 Summary Of Significant Accounting PoliciesNote 3 Net Income Per ShareNote 4 Fair Value MeasurementsNote 5 InventoriesNote 6 Property and EquipmentNote 7 Goodwill and Other Intangible AssetsNote 8 Debt ObligationsNote 9 Stockholders EquityNote 10 Income TaxesNote 11 Segment InformationNote 12 Supplemental Disclosures Of Cash Flow InformationItem 2. Management's Discussion and Analysis Of Financial Condition andItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPart II. Other InformationItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales Of Equity Securities, Use Of Proceeds and Issuer Purchases Of Equity SecuritiesItem 3. Defaults Upon Senior SecuritiesItem 4. Mine Safety DisclosuresItem 5. Other InformationItem 6. Exhibits