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What changed in Chefs' Warehouse, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Chefs' Warehouse, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+213 added−194 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-27)

Top changes in Chefs' Warehouse, Inc.'s 2024 10-K

213 paragraphs added · 194 removed · 173 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeEnvironmental, Social and Governance We are committed to upholding ethical, socially responsible and environmentally conscious business practices, consistent with our corporate values, to promote long-term and sustainable change. In 2022, our board of directors formed an Environmental, Social and Governance Committee (the “ESG Committee”) to oversee our environmental, social and governance activities and 10 practices.
Biggest changeWe offer attractive compensation and benefit packages, and we believe our relationship with our employees is satisfactory. 11 Environmental, Social and Governance We are committed to upholding ethical, socially responsible and environmentally conscious business practices, consistent with our corporate values, to promote long-term and sustainable change.
Mr. Aldous is also an adjunct Professor of Law at the Washington College of Law, American University. Mr.
Aldous is also an adjunct Professor of Law at the Washington College of Law, American University. Mr.
Over recent years, we have made significant investments in distribution, sales, information and warehouse management systems and are in the process of implementing a fully-integrated Enterprise Resource Planning system. Our systems improvements include the implementation of route optimization software, a warehouse management system at all specialty warehouses that integrates with pick-to-voice and directed put-away systems.
Over recent years, we have made significant investments in distribution, sales, information and warehouse management systems and are in the process of implementing and improving a fully-integrated Enterprise Resource Planning system. Our systems improvements include the implementation of route optimization software, a warehouse management system at all specialty warehouses that integrates with pick-to-voice and directed put-away systems.
Our historical sales growth and our ability to manage through the material adverse impacts of the Covid-19 Pandemic (“Pandemic”) on our business are the result of an increase in the breadth and depth of our product portfolio, our commitment to customer service, the efforts of our experienced and sophisticated sales professionals, the increased use of technology in the operations and management of our business and our ongoing consolidation of the fragmented specialty foodservice distribution industry.
Our historical sales growth and our ability to manage through the material adverse impacts of the Covid-19 Pandemic on our business are the result of an increase in the breadth and depth of our product portfolio, our commitment to customer service, the efforts of our experienced and sophisticated sales professionals, the increased use of technology in the operations and management of our business and our ongoing consolidation of the fragmented specialty foodservice distribution industry.
Our Allen Brothers direct-to-consumer business is subject to seasonal fluctuations, with direct-to-consumer center-of-the-plate protein sales typically higher during the holiday season in our fourth quarter; accordingly, a disproportionate amount of operating cash flows from this portion of our business is generated in the fourth quarter.
Our Allen Brothers direct-to-consumer business is subject to seasonal fluctuations, with direct-to-consumer center-of-the-plate protein sales typically higher during the holiday season in our fourth quarter; accordingly, a disproportionate amount of 13 operating cash flows from this portion of our business is generated in the fourth quarter.
The USDA imposes standards for product quality and sanitation, including the inspection and labeling of meat and poultry products and the grading and 11 commercial acceptance of produce shipments from vendors. The products we distribute in Canada are subject to regulation and inspection by Health Canada and the Canadian Food Inspection Agency.
The USDA imposes standards for product quality and sanitation, including the inspection and labeling of meat and poultry products and the grading and commercial acceptance of produce shipments from vendors. The products we distribute in Canada are subject to regulation and inspection by Health Canada and the Canadian Food Inspection Agency.
Our breadth and depth of product offerings coupled with our highly regarded customer service has allowed us to develop and retain a loyal customer base that is comprised of chefs who own or work at more than 44,000 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.
Our breadth and depth of product offerings coupled with our highly regarded customer service has allowed us to develop and retain a loyal customer base that is comprised of chefs who own or work at more than 50,000 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.
Our Markets and the Customers that We Serve We distribute our specialty food products to over 44,000 distinct Core Customer locations from distribution centers located in our primary markets, which include New York, Washington, D.C., Los Angeles, San Francisco, New England, Las Vegas, Miami, Portland, Columbus, Cincinnati, Chicago, Vancouver, Edmonton, Toronto, Seattle, Sacramento, Philadelphia, Texas, Denver, Dubai, Abu Dhabi, Oman and Qatar.
Our Markets and the Customers that We Serve We distribute our specialty food products to over 50,000 distinct Core Customer locations from distribution centers located in our primary markets, which include New York, Washington, D.C., Los Angeles, San Francisco, New England, Las Vegas, Miami, Portland, Columbus, Cincinnati, Chicago, Vancouver, Edmonton, Toronto, Seattle, Sacramento, Philadelphia, Texas, Denver, Dubai, Abu Dhabi, Oman and Qatar.
Furthermore, we believe our established relationships with many of the top chefs, culinary schools and dining establishments in these key culinary markets have benefited us when we entered into new markets where we believe that chefs at our potential customers were generally knowledgeable of our brand and commitment to quality and excellence from their experience working in other markets which we serve or through their personal relationships throughout the culinary industry. 5 Expansive Product Offering.
Furthermore, we believe our established relationships with many of the top chefs, culinary schools and dining establishments in these key culinary markets have benefited us when we entered into new markets where we believe that chefs at our potential customers were generally knowledgeable of our brand and commitment to quality and excellence from their experience working in other markets which we serve or through their personal relationships throughout the culinary industry. 6 Expansive Product Offering.
Polychroni holds a B.A. in Marketing and MBA from the Athens University of Economics and Business, a Human Resources Management Certificate from Cornell University, and a PhD in Management from the School of Business at the Stevens Institute of Technology.
Polychroni holds a B.A. in Marketing and MBA from the Athens University of Economics and Business, a Human Resources Management Certificate from Cornell University, and a PhD in Management from the School of Business at the Stevens Institute of Technology. 15
Since our initial public offering (“IPO”), we have completed thirty-six acquisitions, which have increased our penetration in existing markets, expanded our footprint into new markets and enhanced our product capabilities.
Since our initial public offering, we have completed thirty-six acquisitions, which have increased our penetration in existing markets, expanded our footprint into new markets and enhanced our product capabilities.
We regularly rotate our inventory to identify and bring to market new products that will continue to support our value proposition. 8 Within our product offerings, we carry numerous gourmet brands, and at the same time, we seek to maximize product contribution through the sale of our proprietary brands, which we offer in a number of staple products, including bulk olive oil, Italian grating cheeses and butter.
We regularly rotate our inventory to identify and bring to market new products that will continue to support our value proposition. 9 Within our product offerings, we carry numerous gourmet brands, and at the same time, we seek to maximize product contribution through the sale of our proprietary brands, which we offer in a number of staple products, including bulk olive oil, Italian grating cheeses and butter.
Our Allen Brothers subsidiary markets certain of our center-of-the-plate proteins directly to consumers through a mail and e-commerce platform. 7 Set forth below is a breakdown of the primary geographic markets we serve and the year we entered each market: Market Name Geographies Served Year Entered New York New York to Atlantic City 1985 Washington, D.C.
Our Allen Brothers subsidiary markets certain of our center-of-the-plate proteins directly to consumers through a mail and e-commerce platform. 8 Set forth below is a breakdown of the primary geographic markets we serve and the year we entered each market: Market Name Geographies Served Year Entered New York New York to Atlantic City 1985 Washington, D.C.
If we make any substantive amendments to the Code of Ethics or grant any waiver, including any implicit waiver, from a provision of the Code of Ethics to our principal executive officer, principal financial officer or principal accounting officer, or persons performing similar functions, we intend to make any legally required disclosures regarding such amendments or waivers on the Investors section of our website (http://www.chefswarehouse.com).
If we make any substantive amendments to the Code of Ethics or grant any waiver, including any implicit waiver, from a provision of the Code of Ethics to our principal executive officer, principal financial officer or principal accounting officer, or persons performing similar functions, we intend to make any legally required disclosures regarding such amendments or waivers on the Investors section of our website (https://www.chefswarehouse.com).
We believe that the breadth and depth of our product portfolio facilitates our customers’ ability to distinguish and enhance their menu offerings and differentiates us from larger traditional broadline foodservice distributors. Critical Route-to-Market for Specialty Food Suppliers. We currently distribute products from more than 3,000 different suppliers.
We believe that the breadth and depth of our product portfolio facilitates our customers’ ability to distinguish and enhance their menu offerings and differentiates us from larger traditional broadline foodservice distributors. Critical Route-to-Market for Specialty Food Suppliers. We currently distribute products from more than 4,000 different suppliers.
This scale enables us to maintain a portfolio of more than 70,000 SKUs, and through the operation of our sophisticated information technology, inventory management and logistics systems, we believe we provide our customers with some of the highest levels of customer service and responsiveness in our industry. Experienced and Proven Management Team.
This scale enables us to maintain a portfolio of more than 88,000 SKUs, and through the operation of our sophisticated information technology, inventory management and logistics systems, we believe we provide our customers with some of the highest levels of customer service and responsiveness in our industry. Experienced and Proven Management Team.
John Pappas Vice Chairman and Director 60 John Pappas is a founder of our company and currently serves as our Vice Chairman, a position he has held since March 1, 2011, and Chief Operating Officer, a position he held from our founding in 1985 to March 1, 2011, and again on February 24, 2022 to the present.
John Pappas Vice Chairman and Director 61 John Pappas is a founder of our company and currently serves as our Vice Chairman, a position he has held since March 1, 2011, and Chief Operating Officer, a position he held from our founding in 1985 to March 1, 2011, and again on February 24, 2022 to the present.
Timothy McCauley Chief Accounting Officer 59 Timothy McCauley has served as our Chief Accounting Officer, since his appointment on February 16, 2018 and previously served as our Controller since joining the Company in May 2015. Mr. McCauley has over 30 years of experience in accounting and finance roles across a variety of industries. Mr.
Timothy McCauley Chief Accounting Officer 60 Timothy McCauley has served as our Chief Accounting Officer, since his appointment on February 16, 2018 and previously served as our Controller since joining the Company in May 2015. Mr. McCauley has over 30 years of experience in accounting and finance roles across a variety of industries. Mr.
McCauley holds a Bachelor of Science degree in Business - Accounting from the University of Connecticut and is a registered certified public accountant in the state of Connecticut. Christina Polychroni Chief Human Resources Officer 44 Christina Polychroni is our Chief Human Resources Officer since December 31, 2022. Prior to this appointment, Ms.
McCauley holds a Bachelor of Science degree in Business - Accounting from the University of Connecticut and is a registered certified public accountant in the state of Connecticut. Christina Polychroni Chief Human Resources Officer 45 Christina Polychroni is our Chief Human Resources Officer since December 31, 2022. Prior to this appointment, Ms.
We maintain collaborative relationships with thousands of chefs while also acting as a critical marketing arm and route-to-market for many of our suppliers by leveraging an experienced and sophisticated sales force of approximately 960 sales and customer service professionals.
We maintain collaborative relationships with thousands of chefs while also acting as a critical marketing arm and route-to-market for many of our suppliers by leveraging an experienced and sophisticated sales force of approximately 980 sales and customer service professionals.
We carry more than 70,000 SKUs and we are fully committed to utilizing our sourcing relationships and industry insights to procure products that we do not regularly carry but that our customers specifically request as they seek to create unique and innovative menu offerings.
We carry more than 88,000 SKUs and we are fully committed to utilizing our sourcing relationships and industry insights to procure products that we do not regularly carry but that our customers specifically request as they seek to create unique and innovative menu offerings.
Our Operations and Distribution Centers Operating out of 52 distribution centers of varying size and providing service six days a week in many areas, we utilize our fleet of delivery trucks to fill customer orders, usually within 12-24 hours of order placement.
Our Operations and Distribution Centers Operating out of 49 distribution centers of varying size and providing service six days a week in many areas, we utilize our fleet of delivery trucks to fill customer orders, usually within 12-24 hours of order placement.
Our Code of Ethics is publicly available on the Investor Relations section of our website (http://www.chefswarehouse.com) and is available free of charge by writing to The Chefs’ Warehouse, Inc., 100 East Ridge Road, Ridgefield, Connecticut 06877, Attn: Investor Relations.
Our Code of Ethics is publicly available on the Investor Relations section of our website (https://www.chefswarehouse.com) and is available free of charge by writing to The Chefs’ Warehouse, Inc., 100 East Ridge Road, Ridgefield, Connecticut 06877, Attn: Investor Relations.
Information about our Executive Officers Name & Position Age Business Experience Christopher Pappas President, Chief Executive Officer and Chairman of the Board of Directors 64 Christopher Pappas is our founder and has served as our Chief Executive Officer since 1985 and has been our chairman since March 1, 2011.
Information about our Executive Officers Name & Position Age Business Experience Christopher Pappas President, Chief Executive Officer and Chairman of the Board of Directors 65 Christopher Pappas is our founder and has served as our Chief Executive Officer since 1985 and has been our chairman since March 1, 2011.
Our target customers include menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores. We have no meaningful customer concentration as our top ten customers accounted for less than 6.1% of total net sales for our 2023 fiscal year.
Our target customers include menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores. We have no meaningful customer concentration as our top ten customers accounted for less than 6% of total net sales for our 2024 fiscal year.
We intend to sell more products to our existing customers by increasing the breadth and depth of our product selection and increasing the efficiency of our sales professionals, while at the same time 6 continuing to provide excellent customer service.
We intend to sell more products to our existing customers by increasing the breadth and depth of our product selection and increasing the efficiency of our sales professionals, while at the same time 7 continuing to provide excellent customer service.
Our Sophisticated and Experienced Sales Professionals We employ a sophisticated and experienced sales force of approximately 960 sales and customer service professionals focused on meeting our customers’ goals and objectives, while concurrently educating them regarding our latest products and broader culinary trends.
Our Sophisticated and Experienced Sales Professionals We employ a sophisticated and experienced sales force of approximately 980 sales and customer service professionals focused on meeting our customers’ goals and objectives, while concurrently educating them regarding our latest products and broader culinary trends.
Excluding our direct-to-consumer businesses, we currently serve more than 44,000 core customer locations in our twenty-three primary geographic markets across the United States, the Middle East, and Canada.
Excluding our direct-to-consumer businesses, we currently serve more than 50,000 core customer locations in our twenty-three primary geographic markets across the United States, the Middle East, and Canada.
We carry more than 70,000 SKUs and we constantly evaluate our portfolio and introduce new products to address regional trends and preferences and ensure that we are on the leading edge of broader culinary trends.
We carry more than 88,000 SKUs and we constantly evaluate our portfolio and introduce new products to address regional trends and preferences and ensure that we are on the leading edge of broader culinary trends.
We employ a sophisticated and experienced sales force of approximately 960 sales and customer service professionals, a significant number of whom have formal culinary training, degrees in the culinary arts or prior experience working in the culinary industry.
We employ a sophisticated and experienced sales force of approximately 980 sales and customer service professionals, a significant number of whom have formal culinary training, degrees in the culinary arts or prior experience working in the culinary industry.
We currently distribute products from more than 3,000 different suppliers. We carry multiple products and utilize multiple suppliers in all of our product categories, thereby eliminating our dependence upon any single supplier.
We currently distribute products from more than 4,000 different suppliers. We carry multiple products and utilize multiple suppliers in all of our product categories, thereby eliminating our dependence upon any single supplier.
The SEC also maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers, including us, that file electronically with the SEC located at http://www.sec.gov.
The SEC also maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers, including us, that file electronically with the SEC located at https://www.sec.gov.
Competitive Strengths We believe that, during our over 35-year history, we have achieved, developed and/or refined the following strengths which provide us with a distinct competitive position in the foodservice distribution industry and also the opportunity to achieve superior margins relative to most large broadline foodservice distributors: Leading Distributor of Specialty Food Products in Many of the Key Culinary Markets.
Competitive Strengths We believe that, during our nearly 40-year history, we have achieved, developed and/or refined the following strengths which provide us with a distinct competitive position in the foodservice distribution industry and also the opportunity to achieve superior margins relative to most large broadline foodservice distributors: Leading Distributor of Specialty Food Products in Many of the Key Culinary Markets.
We operate 52 distribution centers and provide service six days a week in many of our service areas, utilizing our fleet of delivery trucks to fill our customers’ orders.
We operate 49 distribution centers and provide service six days a week in many of our service areas, utilizing our fleet of delivery trucks to fill our customers’ orders.
With 52 distribution centers located throughout the United States, Middle East and Canada, we are able to leverage our geographic footprint and reduce our inbound freight costs.
With 49 distribution centers located throughout the United States, Middle East and Canada, we are able to leverage our geographic footprint and reduce our inbound freight costs.
Based on our management’s industry knowledge and experience, we believe we are the largest distributor of specialty food products, as measured by net sales, in the New York, Washington, D.C., San Francisco and Los Angeles metropolitan markets.
Based on our management’s industry knowledge and experience, we believe we are among the largest distributors of specialty food products, as measured by net sales, in the New York, Washington, D.C., San Francisco and Los Angeles metropolitan markets.
We serve more than 44,000 Core Customer locations, excluding our direct-to-consumer business, in the United States, Middle East, and Canada.
We serve more than 50,000 Core Customer locations, excluding our direct-to-consumer business, in the United States, Middle East, and Canada.
Our product portfolio includes over 70,000 stock-keeping units (“SKUs”) from more than 3,000 different suppliers and is comprised primarily of imported and domestic specialty food products, such as artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate and pastry products.
Our product portfolio includes over 88,000 stock-keeping units (“SKUs”) from more than 4,000 different suppliers and is comprised primarily of imported and domestic specialty food products, such as artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate and pastry products.
By implementing such trainings at every level of our operations, we are able to provide our customers with the exceptional service they expect without compromising the safety and comfort of our employees. Professional Development Providing career development opportunities for our employees is a top priority.
By implementing such training at every level of our operations along with compliance training, we are able to provide our customers with the exceptional service they expect without compromising the safety and comfort of our employees. Professional Development Providing career development opportunities for our employees is a top priority.
Throughout our over 35-year history, we have successfully identified, consummated and integrated multiple strategic acquisitions, which were designed to increase our penetration in existing markets, expand our footprint into new markets and/or enhance our product capabilities.
Throughout our nearly 40-year history, we have successfully identified, consummated and integrated multiple strategic acquisitions, which were designed to increase our penetration in existing markets, expand our footprint into new markets and/or enhance our product capabilities.
Food and Drug Administration (“FDA”). The FDA regulates manufacturing and holding requirements for foods, specifies the standards of identity for certain foods and prescribes the format and content of certain information required to appear on food product labels, among other responsibilities.
The FDA regulates manufacturing and holding requirements for foods, specifies the standards of identity for certain foods and prescribes the format and content of certain information 12 required to appear on food product labels, among other responsibilities.
Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports will be made available free of charge through the Investors section of our website (http://www.chefswarehouse.com) as soon as practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”).
Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports will be made available free of charge through the Investors section of our website (https://www.chefswarehouse.com) as soon as practicable after such material is electronically filed with, or furnished to, the SEC.
Diversity, Equity and Inclusion We believe that a diverse workforce creates a healthier, stronger and more sustainable company. As a foundation of diversity and inclusion, we focus on increasing underrepresented populations across our business. In 2023, more than two-thirds of our employees, and more than 20% of our management, were diverse.
Diversity, Equity and Inclusion We believe that a diverse workforce creates a healthier, stronger and more sustainable company. As a foundation of diversity and inclusion, we focus on increasing underrepresented populations across our business. In 2024, approximately 70% of our employees, and more than 20% of our management, were diverse.
Pappas's qualifications to serve on our board of directors include his extensive knowledge of our company and the specialty food products distribution industry and his years of leadership at the Company. James Leddy Chief Financial Officer 60 James “Jim” Leddy is our Chief Financial Officer and assistant secretary, positions he has held since his appointment as of November 11, 2017.
Pappas's qualifications to serve on our board of directors include his extensive knowledge of our company and the specialty food products distribution industry and his years of leadership at the Company. 14 Name & Position Age Business Experience James Leddy Chief Financial Officer 61 James “Jim” Leddy is our Chief Financial Officer and assistant secretary, positions he has held since his appointment as of November 11, 2017.
We have invested significantly in sophisticated warehousing, inventory control and distribution systems, as described in more detail below. 9 We have implemented pick-to-voice technology in each of our distribution facilities, which enables our warehouse employees to fill orders with greater speed and accuracy and are implementing inventory scanning platforms in an effort to reduce damages and returns.
We have invested significantly in sophisticated warehousing, inventory control and distribution systems, as described in more detail below. 10 We are implementing wearable inventory scanning devices as our selection technology as we migrate away from voice pick systems in each of our distribution facilities, which enables our warehouse employees to fill orders with greater speed and accuracy and reduce damages and returns.
This system provides our drivers with tools and knowledge to make smart decisions behind the wheel, reducing the risk of accidents and injuries while ensuring timely deliveries to our customers. Managers who oversee drivers also complete safety leadership training through the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability program.
This system provides our drivers with tools and knowledge to make smart decisions behind the wheel, reducing the risk of accidents and injuries while ensuring timely deliveries to our customers. Managers who oversee drivers ensure all drivers comply with Federal Motor Carrier Safety regulations.
Regulation As a distributor of specialty food products and meat and seafood in the United States and Canada, we are subject to regulation by numerous international, federal, state, provincial and local regulatory agencies. For example, at the U.S. federal level, we are subject to the Federal Food, Drug and Cosmetic Act, the Bioterrorism Act and regulations promulgated by the U.S.
Regulation As a distributor of specialty food products and meat and seafood in the United States and Canada, we are subject to regulation by numerous international, federal, state, provincial and local regulatory agencies.
Our net revenues have increased from approximately $1.6 billion for the fiscal year ended December 27, 2019 to $3.4 billion for the fiscal year ended December 29, 2023.
Our net revenues have increased from approximately $1.1 billion for the fiscal year ended December 25, 2020 to $3.8 billion for the fiscal year ended December 27, 2024.
We believe that our current systems are scalable and can be leveraged together with targeted investments in new technology to provide the fuel to drive profitable growth.
We also leverage a reporting and analytics platform that provides our sales team and management with the information required to drive efficiency and growth. We believe that our current systems are scalable and can be leveraged together with targeted investments in new technology to provide the fuel to drive profitable growth.
Despite a significant portion of these sales occurring in the fourth quarter, there are operating expenses, principally advertising and promotional expenses, throughout the year. 12 Inflation Our profitability is dependent, among other things, on our ability to anticipate and react to changes in the costs of key operating resources, including food and other raw materials, labor, energy and other supplies and services.
Inflation Our profitability is dependent, among other things, on our ability to anticipate and react to changes in the costs of key operating resources, including food and other raw materials, labor, energy and other supplies and services.
Human Capital Management As of December 29, 2023, we had 4,873 full-time employees, 207 of whom (approximately 4%) are currently represented by unions and operate under collective bargaining agreements, which expire at various times between fiscal 2024 and 2025. We offer attractive compensation and benefit packages, and we believe our relationship with our employees is satisfactory.
Human Capital Management As of December 27, 2024, we had 5,029 full-time employees, 145 of whom (approximately 3%) are currently represented by unions and operate under collective bargaining agreements, which expire at various times between fiscal 2025 and 2027.
Leddy holds an M.B.A. in Finance and Management of Technology from the University of Connecticut and a B.A. in Economics from Fordham University. 13 Name & Position Age Business Experience Alexandros Aldous General Counsel, Corporate Secretary & Chief Government Relations Officer 43 Alexandros Aldous is our General Counsel, Corporate Secretary, Chief Government Relations Officer & Chief Administrative Officer, positions he has held since joining us in March 2011, our IPO on July 27, 2011, March 8, 2017, and September 16, 2021, respectively.
Alexandros Aldous General Counsel, Corporate Secretary & Chief Government Relations Officer 44 Alexandros Aldous is our General Counsel, Corporate Secretary, Chief Government Relations Officer & Chief Administrative Officer, positions he has held since joining us in March 2011, July 27, 2011, March 8, 2017, and September 16, 2021, respectively. Mr.
The up-front cash purchase prices for these nineteen acquisitions resulted in aggregate up-front cash consideration of more than $387.2 million, which we funded with cash generated from our operations, borrowings under our then existing credit facilities and proceeds of our common stock offerings.
Since December 25, 2020, we have completed sixteen acquisitions which have increased our penetration in existing markets, expanded our footprint into new markets and/or enhanced our product capabilities. The up-front cash purchase prices for these sixteen acquisitions was more than $326.2 million, which we funded with cash generated from our operations and borrowings under our then existing credit facilities.
Removed
Since December 27, 2019, we have completed nineteen acquisitions which have increased our penetration in existing markets, expanded our footprint into new markets and/or enhanced our product capabilities.
Added
We are driving increasing sales volume through our e-commerce platform by optimizing our customers’ re-order and product discovery journeys. We believe we will be able to utilize advancements in search and artificial intelligence to enable us to better predict our customers’ needs so that we can deliver the same level of service online as we do offline.
Removed
We are driving increasing sales volume through our e-commerce platforms and a new mobile ordering tool which we believe will enable a much more seamless online customer experience. We also leverage a reporting and analytics platform that provides our sales team and management with the information required to drive efficiency and growth.
Added
In 2022, our board of directors formed an Environmental, Social and Governance Committee (the “ESG Committee”) to oversee our environmental, social and governance activities and practices.
Added
For example, at the U.S. federal level, we are subject to the Federal Food, Drug and Cosmetic Act, the Food Safety Modernization Act, the Bioterrorism Act and regulations promulgated by the U.S. Food and Drug Administration (“FDA”).
Added
Despite a significant portion of these sales occurring in the fourth quarter, there are operating expenses, principally advertising and promotional expenses, throughout the year.
Added
Leddy holds an M.B.A. in Finance and Management of Technology from the University of Connecticut and a B.A. in Economics from Fordham University.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

50 edited+26 added−6 removed187 unchanged
Biggest changeAB 1305, which became effective January 1, 2024, creates new annual disclosure requirements regarding substantiation of certain climate-related statements, and may increase our compliance costs. Compliance with these climate-related disclosure rules will require additional time and attention of management and financial resources.
Biggest changeNon-compliance with the requirements of SB 253 could expose us to a fine of up to $500,000 per reporting year. Additionally, California enacted Assembly Bill 1305 (“AB 1305”). AB 1305, which became effective January 1, 2024, created new annual disclosure requirements regarding substantiation of certain climate-related statements, and may increase our compliance costs.
For example, our indebtedness: • requires us to utilize a substantial portion of our cash flows from operations to make payments on our indebtedness, reducing the availability of our cash flows to fund working capital, capital expenditures, development activity and other general corporate purposes; • increases our vulnerability to adverse general economic or industry conditions; • limits our flexibility in planning for, or reacting to, changes in our business or the industries in which we operate; • makes us more vulnerable to increases in interest rates, as borrowings under our Term Loan and ABL (together the “Credit Facilities”) are at variable rates; • in the case of our convertible debt, could result in the issuance of additional shares of our common stock that would result in the dilution of our then-existing stockholders; 26 • limits our ability to obtain additional financing in the future for working capital or other purposes, including to finance acquisitions; and • places us at a competitive disadvantage compared to our competitors with less indebtedness.
For example, our indebtedness: • requires us to utilize a substantial portion of our cash flows from operations to make payments on our indebtedness, reducing the availability of our cash flows to fund working capital, capital expenditures, development activity and other general corporate purposes; • increases our vulnerability to adverse general economic or industry conditions; • limits our flexibility in planning for, or reacting to, changes in our business or the industries in which we operate; • makes us more vulnerable to increases in interest rates, as borrowings under our Term Loan and ABL (together the “Credit Facilities”) are at variable rates; • in the case of our convertible debt, could result in the issuance of additional shares of our common stock that would result in the dilution of our then-existing stockholders; • limits our ability to obtain additional financing in the future for working capital or other purposes, including to finance acquisitions; and • places us at a competitive disadvantage compared to our competitors with less indebtedness.
If there is any future product withdrawal that results in substantial and unexpected expenditures, destruction of product inventory, damage to our reputation, or lost sales because of the unavailability of the product We are subject to significant governmental regulation, and failure to comply could subject us to enforcement actions, recalls or other penalties, which could have a material adverse effect on our business, financial condition or results of operations.
If there is any future product withdrawal that results in substantial and unexpected expenditures, destruction of product inventory, damage to our reputation, or lost sales because of the unavailability of the product. 26 We are subject to significant governmental regulation, and failure to comply could subject us to enforcement actions, recalls or other penalties, which could have a material adverse effect on our business, financial condition or results of operations.
Despite our efforts to control costs while still providing competitive healthcare benefits to our staff members, significant increases in healthcare costs continue to occur, and we can provide no assurance that our cost containment efforts in this area will be effective. Fuel cost volatility may have a material adverse effect on our business, financial condition or results of operations.
Despite our efforts to control costs while still providing competitive healthcare benefits to our staff members, significant increases in healthcare costs continue to occur, and we can provide no assurance that our cost containment efforts in this area will be effective. 18 Fuel cost volatility may have a material adverse effect on our business, financial condition or results of operations.
Due to their prominence as, among other characteristics, densely-populated major metropolitan cities and as international hubs for intermodal transportation, a majority of our markets are potential targets for terrorist activity and are susceptible to other catastrophic events and could be subject to transportation disruption. 21 Our markets outside the United States may also be impacted by political protests or instability.
Due to their prominence as, among other characteristics, densely-populated major metropolitan cities and as international hubs for intermodal transportation, a majority of our markets are potential targets for terrorist activity and are susceptible to other catastrophic events and could be subject to transportation disruption. Our markets outside the United States may also be impacted by political protests or instability.
The following discussion of risks is not all inclusive, but is designed to highlight what we believe are the most significant factors to consider when evaluating our business. 14 Business and Macroeconomic Risk Our success depends to a significant extent upon general economic conditions, including disposable income levels and changes in consumer discretionary spending.
The following discussion of risks is not all inclusive, but is designed to highlight what we believe are the most significant factors to consider when evaluating our business. Business and Macroeconomic Risk Our success depends to a significant extent upon general economic conditions, including disposable income levels and changes in consumer discretionary spending.
Further, potential changes in labor 16 legislation and case law could result in current non-union portions of our workforce, including warehouse and delivery personnel, being subjected to greater organized labor influence. As we increase our employee base and broaden our distribution operations to new geographic markets, our increased visibility could result in increased or expanded union-organizing efforts.
Further, potential changes in labor legislation and case law could result in current non-union portions of our workforce, including warehouse and delivery personnel, being subjected to greater organized labor influence. As we increase our employee base and broaden our distribution operations to new geographic markets, our increased visibility could result in increased or expanded union-organizing efforts.
Consequently, the ability of such businesses to repay their obligations to us may deteriorate, and in some cases this deterioration may occur quickly, which could adversely impact our business, financial condition or results of operations. Adverse publicity about us, lack of confidence in our products or services and other risks could negatively affect our reputation and our business.
Consequently, the ability of such businesses to repay their obligations to us may deteriorate, and in some cases this deterioration may occur quickly, which could adversely impact our business, financial condition or results of operations. 20 Adverse publicity about us, lack of confidence in our products or services and other risks could negatively affect our reputation and our business.
The Company will continue to monitor regulatory developments to assess potential impacts to the Company. Complying with new tax rules, laws or regulations could impact our business, financial condition or results of operations, and increases to federal, provincial or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate.
The Company will continue to monitor regulatory developments to assess potential impacts to the Company. 28 Complying with new tax rules, laws or regulations could impact our business, financial condition or results of operations, and increases to federal, provincial or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate.
Deterioration in the economic conditions of our key markets generally, or in the local economy of the New York metropolitan area, San Francisco Bay or Los Angeles, California, New England and Middle East areas, specifically, could affect our business, financial condition or results of operations in a materially adverse manner.
Deterioration in the economic conditions of our key markets generally, or in the local economy of the New York metropolitan area, San Francisco Bay or Los Angeles, New England and Middle East areas, specifically, could affect our business, financial condition or results of operations in a materially adverse manner.
Additionally, we may seek to distribute a different set of products than the business that we acquire, which may cause a loss of customers of those businesses if we can no longer carry the products they desire or charge more for those products than was charged before we acquired the business.
Additionally, we may seek to distribute a different set of products than the business that we acquire, 19 which may cause a loss of customers of those businesses if we can no longer carry the products they desire or charge more for those products than was charged before we acquired the business.
See “Management’s Discussion and Financial Condition and Results of Operations — Liquidity and Capital Resources.” Our ability to raise capital in the future may be limited. Our business and operations may consume resources, including availability under our ABL, faster than we currently anticipate.
See “Management’s Discussion and Financial Condition and Results of Operations — Liquidity and Capital Resources.” 29 Our ability to raise capital in the future may be limited. Our business and operations may consume resources, including availability under our ABL, faster than we currently anticipate.
Significant decreases in the 18 volume and/or number of our customers’ purchase orders or our inability to retain or grow our current customer base may have a material adverse effect on our business, financial condition or results of operations.
Significant decreases in the volume and/or number of our customers’ purchase orders or our inability to retain or grow our current customer base may have a material adverse effect on our business, financial condition or results of operations.
In connection with our acquisition of businesses in the future, if any, we may decide to consolidate the operations of any acquired business with our existing operations or make other changes with respect to the acquired business, which could result 17 in special charges or other expenses.
In connection with our acquisition of businesses in the future, if any, we may decide to consolidate the operations of any acquired business with our existing operations or make other changes with respect to the acquired business, which could result in special charges or other expenses.
Our suppliers are also subject to similar regulatory requirements and oversight. 24 As a result of our global operations, we are required to comply with laws and regulations governing ethical, anti-bribery and similar business practices.
Our suppliers are also subject to similar regulatory requirements and oversight. As a result of our global operations, we are required to comply with laws and regulations governing ethical, anti-bribery and similar business practices.
If we suffer a substantial loss that is not covered by our self- insurance reserves, the loss and attendant expenses could harm our business and operating results. We are self-insured for workers’ compensation and automobile liability to deductibles or self-insured retentions of $500,000 per occurrence. The amounts in excess of our deductibles are fully insured by third party insurers.
If we suffer a substantial loss that is not covered by our self- insurance reserves, the loss and attendant expenses could harm our business and operating results. We are self-insured for workers’ compensation and automobile liability to deductibles or self-insured retentions per occurrence. The amounts in excess of our deductibles are fully insured by third party insurers.
Changes in these estimates, or changes in actual performance compared with these estimates, may affect the fair value of long-lived assets, which may result in an impairment charge. 20 We cannot accurately predict the amount or timing of any impairment. Should the value of long-lived assets become impaired, our financial condition and results of operations may be adversely affected.
Changes in these estimates, or changes in actual performance compared with these estimates, may affect the fair value of long-lived assets, which may result in an impairment charge. 22 We cannot accurately predict the amount or timing of any impairment. Should the value of long-lived assets become impaired, our financial condition and results of operations may be adversely affected.
Moreover, our business, including our global supply chain, may be affected by geopolitical issues, such as the Russian invasion of Ukraine and related sanctions as well as the ongoing conflict in Israel, which have resulted in increased global tensions and contributed to rising input costs.
Moreover, our business, including our global supply chain, may be affected by geopolitical issues, such as the Russian invasion of Ukraine and related sanctions as well as the ongoing conflict in Israel and the Middle East, which have resulted in increased global tensions and contributed to rising input costs.
These conditions include labor shortages, work slowdowns, work interruptions, strikes or other adverse employment actions by employees of ours or our suppliers, government shutdowns, weather conditions or more prolonged climate change, crop conditions, product recalls, product or raw material scarcity, water shortages, transportation interruptions within our distribution channels, unavailability of fuel or increases in fuel costs, competitive demands, contamination with mold, bacteria or other contaminants, pandemics (such as the Pandemic), natural disasters or other catastrophic events, including the outbreak of e. coli or similar food borne illnesses or bioterrorism in the United States, international hostilities, civil insurrection, and social unrest.
These conditions include labor shortages, work slowdowns, work interruptions, strikes or other adverse employment actions by employees of ours or our suppliers, government shutdowns, weather conditions or more prolonged climate change, crop conditions, product recalls, product or raw material scarcity, water shortages, transportation interruptions within our distribution channels, unavailability of fuel or increases in fuel costs, competitive demands, contamination with mold, bacteria or other contaminants, pandemics, natural disasters or other catastrophic events, including the outbreak of e. coli or similar food borne illnesses or bioterrorism in 17 the United States, international hostilities, civil insurrection, and social unrest.
In addition, a widespread health epidemic (such as the Pandemic) or food-borne illness, whether or not related to the use of our products, as well as terrorist events may cause consumers to avoid public gathering places, like restaurants, or otherwise change their eating behaviors.
In addition, a widespread health epidemic or food-borne illness, whether or not related to the use of our products, as well as terrorist events may cause consumers to avoid public gathering places, like restaurants, or otherwise change their eating behaviors.
We maintain a self-insured group medical program. The program contains individual stop loss thresholds of $300,000 per incident and aggregate stop loss thresholds based upon the average number of employees enrolled in the program throughout the year. The amount in excess of the self-insured levels is fully insured by third party insurers.
We maintain a self-insured group medical program. The program contains individual stop loss thresholds per incident and aggregate stop loss thresholds based upon the average number of employees enrolled in the program throughout the year. The amount in excess of the self-insured levels is fully insured by third party insurers.
We also have significant operations in the San Francisco Bay Area, Los Angeles, California, New England and Middle East.
We also have significant operations in the San Francisco Bay Area, Los Angeles, New England and Middle East.
While we have implemented cybersecurity solutions, conducted employee awareness campaigns, employed both internal resources and external consultants to conduct auditing and testing for weaknesses in our systems, controls, firewalls and encryption and intend to maintain and upgrade our security technology and operational procedures to prevent such damage, breaches, attacks, or other disruptive problems, such efforts may be unsuccessful which in turn could.
While we have implemented cybersecurity solutions, conducted employee awareness campaigns, employed both internal resources and external consultants to conduct auditing and testing for weaknesses in our systems, controls, firewalls and encryption and intend to maintain and upgrade our security technology and operational procedures to prevent such damage, breaches, attacks, or other disruptive problems, such efforts may be unsuccessful which in turn could provide an opportunity for cyber attacks.
We have, and the companies we have acquired have had, liability insurance with respect to product liability claims. This insurance may not continue to be available at a reasonable cost or at all, and it may not be adequate to cover product liability claims against us or against any of the companies we have acquired.
This insurance may not continue to be available at a reasonable cost or at all, and it may not be adequate to cover product liability claims against us or against any of the companies we have acquired.
Our operations and/or distribution centers which are located in (i) New York City, New England, Ohio, Washington D.C., Chicago and Canada are particularly susceptible to significant amounts of snowfall and ice, (ii) Miami and Orlando are particularly susceptible to hurricanes and flooding, and (iii) Los Angeles and San Francisco are particularly susceptible to earthquakes, mudslides and wildfires, among other locally occurring adverse weather conditions.
Our operations and/or 23 distribution centers which are located in (i) New York City, New England, Ohio, Washington D.C., Chicago and Canada are particularly susceptible to significant amounts of snowfall and ice, (ii) Florida is particularly susceptible to hurricanes and flooding, and (iii) Los Angeles and San Francisco are particularly susceptible to earthquakes, mudslides and wildfires, among other locally occurring adverse weather conditions.
In particular, Christopher Pappas, our president and chief executive officer, and John Pappas, our vice chairman and chief operating officer, beneficially owned approximately 10.8% of our outstanding shares of common stock as of February 12, 2024.
In particular, Christopher Pappas, our president and chief executive officer, and John Pappas, our vice chairman and chief operating officer, beneficially owned approximately 10.8% of our outstanding shares of common stock as of February 10, 2025.
In recent years, certain of these markets have been more resilient to economic downturns than others. Moreover, sales in our New York market, which we define as our operations spanning from New York to Atlantic City, accounted for approximately 16.6% of our net sales for fiscal year 2023. We are therefore particularly exposed to downturns in this regional economy.
In recent years, certain of these markets have been more resilient to economic downturns than others. Moreover, sales in our New York market, which we define as our operations spanning from New York to Atlantic City, accounted for approximately 15.9% of our net sales for fiscal year 2024. We are therefore particularly exposed to downturns in this regional economy.
On December 12, 2022, the European Union member states agreed to implement the OECD’s Base Erosion and Profit Shifting (“BEPS”) 2.0 Pillar Two global corporate minimum tax rate of 15% on companies with revenues of at least €750 million, which would go into effect in 2024.
In December 2022, the European Union member states agreed to implement the OECD’s Base Erosion and Profit Shifting (“BEPS”) 2.0 Pillar Two global corporate minimum tax rate of 15% on companies with revenues of at least €750 million, with associated rules going into effect in some member states in 2024.
In an attempt to reduce our operating expenses, increase our operational efficiencies, boost our operating margins and more closely track the movement of our inventory in our center-of-the-plate category, we have aggressively invested in the development and implementation of new information technology.
Our investments in information technology may not produce the benefits that we anticipate. In an attempt to reduce our operating expenses, increase our operational efficiencies, boost our operating margins and more closely track the movement of our inventory in our center-of-the-plate category, we have aggressively invested in the development and implementation of new information technology.
A successful claim of infringement against us could result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any of which could have a negative impact on our business, financial condition or results of operations and could harm our future prospects. 23 Legal and Regulatory Risk Product liability claims could have a material adverse effect on our business, financial condition or results of operations.
A successful claim of infringement against us could result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any of which could have a negative impact on our business, financial condition or results of operations and could harm our future prospects.
If we do not provide sufficient resources to ensure we are able to respond, adapt and implement the necessary requirements to respond to the various forthcoming changes, which could include federal data privacy requirements in the U.S., while continuing to maintain our compliance with global data privacy laws, this could adversely impact our reputation and we could face exposure to fines levied by regulators, which could have a significant financial impact on our business.
If we do not provide sufficient resources to ensure we are able to respond, adapt and implement the necessary requirements to respond to the various forthcoming changes, which could include federal data privacy requirements in the U.S., while continuing to maintain our compliance with global data privacy laws, this could adversely impact our reputation and we could face exposure to fines levied by regulators, which could have a significant financial impact on our business. 25 We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.
Non-compliance with the requirements of SB 261 could expose us to a fine of up to $50,000 per reporting year, and we may also be required to pay an annual filing fee. Additionally, California recently enacted Assembly Bill 1305 (“AB 1305”).
Non-compliance with the requirements of SB 261 could expose us to a fine of up to $50,000 per reporting year, and we may also be required to pay an annual filing fee.
We may need to recall our products if they become adulterated. If patrons of our restaurant customers become ill from food-borne illnesses, our customers could be forced to temporarily close restaurant locations and our sales would be correspondingly decreased.
If patrons of our restaurant customers become ill from food-borne illnesses, our customers could be forced to temporarily close restaurant locations and our sales would be correspondingly decreased.
Our inability to effectively price our specialty food products, produce or center-of-the-plate products, to quickly respond to inflationary and deflationary cost pressures and to reduce our expenses could have a material adverse impact on our business, financial condition or results of operations. We have significant competition from a variety of sources, and we may not be able to compete successfully.
Our inability to effectively price our specialty food products, produce or center-of-the-plate products, to quickly respond to inflationary and deflationary cost pressures and to reduce our expenses could have a material adverse impact on our business, financial condition or results of operations.
As of December 29, 2023, we had 4,873 full-time employees, 207 of whom (approximately 4%) are represented by unions and are operating under collective bargaining agreements which expire at various times between fiscal 2024 and 2025.
As of December 27, 2024, we had 5,029 full-time employees, 145 of whom (approximately 3%) are represented by unions and are operating under collective bargaining agreements which expire at various times between fiscal 2025 and 2027.
For example, on October 7, 2023, California Governor Gavin Newsom signed into law SB 261 (“SB 261”), Greenhouse Gases: Climate-Related Financial Risk, and SB 253, the Climate Corporate Data Accountability Act, which significantly expand climate-related disclosure requirements for companies doing business in California. As a company with operations in California, we may fall under the jurisdiction of these new laws.
For example, on October 7, 2023, California Governor Gavin Newsom signed into law SB 261 (“SB 261”), Greenhouse Gases: Climate-Related Financial Risk, and SB 253 (“SB 253”), the Climate Corporate Data Accountability Act, which significantly expand climate-related disclosure requirements for companies doing business in California.
As of December 29, 2023, we had approximately $735.3 million of total indebtedness, consisting of $276.3 million of loans outstanding on our senior secured term loan facility (“Term Loan”), $327.2 million of convertible debt, $100.0 million of borrowings outstanding under our asset-based loan facility (“ABL”) and $31.9 million of finance leases and other financing obligations.
As of December 27, 2024, we had approximately $720.2 million of total indebtedness, consisting of $260.0 million of loans outstanding on our senior secured term loan facility (“Term Loan”), $287.5 million of convertible debt, $120.0 million of borrowings outstanding under our asset-based loan facility (“ABL”) and $52.7 million of finance leases and other financing obligations.
Commencing on January 1, 2026, and biennially thereafter, SB 261 mandates that we publicly disclose our climate-related financial risks, including disclosing strategies we have adopted to mitigate and adapt to these risks.
As a company with operations in California, we may fall under the jurisdiction of these new laws. Commencing on January 1, 2026, and biennially thereafter, SB 261 mandates that we publicly disclose our climate-related financial risks, including disclosing strategies we have adopted to mitigate and adapt to these risks.
Additionally, if we were unable or unwilling to lower the prices we charge for our products to a level that was satisfactory to the group purchasing organization, we may lose the business of those of our customers that are members of these organizations, which could have a material adverse impact on our business, financial condition or results of operations. 15 Our future success will be largely dependent upon our ability to profitably meet our customers’ needs for certain gourmet foods and ingredients, varying drop sizes, high service levels and timely delivery.
Additionally, if we were unable or unwilling to lower the prices we charge for our products to a level that was satisfactory to the group purchasing organization, we may lose the business of those of our customers that are members of these organizations, which could have a material adverse impact on our business, financial condition or results of operations.
The U.S. and many state and local jurisdictions where we do business from time to time enact changes in relevant tax, accounting and other laws, regulations and interpretations.
The U.S. and many state and local jurisdictions where we do business from time to time enact changes in relevant tax, accounting and other laws, regulations and interpretations. In addition, aspects of U.S. tax laws may lead foreign jurisdictions to respond by enacting additional tax legislation that is unfavorable to us.
Any disruption could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business can be arranged.
Any disruption could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business can be arranged. Such measures could include deferring capital expenditures (including our entry into new markets, including through acquisitions) and reducing or eliminating other discretionary uses of cash.
Further, as we pursue our strategy to grow through acquisitions and to pursue new initiatives that improve our operations and cost structure, we are also expanding and improving our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.
If these service providers do not perform effectively due to breach or system failure, we may not be able to achieve the expected benefits and our business may be disrupted. 24 Further, as we pursue our strategy to grow through acquisitions and to pursue new initiatives that improve our operations and cost structure, we are also expanding and improving our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.
For more information on the goodwill assessment, see “Management’s Discussion and Financial Condition and Results of Operations—Critical Accounting Estimates—Valuation of Goodwill and Intangible Assets” and Note 8, Goodwill and Other Intangible Assets, to our consolidated financial statements. Geographic and Global Risk Significant public health epidemics or pandemics may adversely affect our business, results of operations and financial condition.
For more information on the goodwill assessment, see “Management’s Discussion and Financial Condition and Results of Operations—Critical Accounting Estimates—Valuation of Goodwill and Intangible Assets” and Note 8, Goodwill and Other Intangible Assets, to our consolidated financial statements. Changing rules, public disclosure regulations and stakeholder expectations on ESG-related matters create a variety of risks for our business.
Like any other distributor of food products, we face an inherent risk of exposure to product liability claims if the products we sell cause injury or illness. We may be subject to liability, which could be substantial, because of actual or alleged contamination in products sold by us, including products sold by companies before we acquired them.
We may be subject to liability, which could be substantial, because of actual or alleged contamination in products sold by us, including products sold by companies before we acquired them. We have, and the companies we have acquired have had, liability insurance with respect to product liability claims.
Further, we may incur costs related to claims for which we have appropriate third-party indemnity, but such third parties may fail to fulfill their contractual obligations. 25 Changes in applicable federal, state, provincial and local tax laws and regulations in the United States, Canada and the Middle East, and the resolution of tax disputes, may adversely impact our business, financial condition or results of operations.
Changes in applicable federal, state, provincial and local tax laws and regulations in the United States, Canada and the Middle East, and the resolution of tax disputes, may adversely impact our business, financial condition or results of operations.
We cannot assure investors that we will be able to effectively respond to changes in consumer health perceptions or resulting new laws or regulations or to adapt our product offerings to trends in eating habits. 19 Our business operations and future development could be significantly disrupted if we lose key members of our management team.
We cannot assure investors that we will be able to effectively respond to changes in consumer health perceptions or resulting new laws or regulations or to adapt our product offerings to trends in eating habits. We rely on independent certifications for a number of our products.
In addition, our operations could be disrupted if we were required to quarantine employees that work at our various distribution centers and processing facilities.
Such events could significantly impact the food-away-from-home industry and other industries that are sensitive to changes in consumer discretionary spending habits. In addition, our operations could be disrupted if we were required to quarantine employees that work at our various distribution centers and processing facilities.
As of February 12, 2024, our executive officers, directors and their affiliates beneficially owned, in the aggregate, approximately 12.6% of our outstanding shares of common stock.
Risks Relating to Ownership of our Common Stock Concentration of ownership among our existing executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions. As of February 10, 2025, our executive officers, directors and their affiliates beneficially owned, in the aggregate, approximately 12.6% of our outstanding shares of common stock.
A public health epidemic or pandemic, such as the Pandemic, can significantly impact our business or those of our Core Customers or suppliers, particularly if located in geographies in which we have significant operations. Such events could significantly impact the food-away-from-home industry and other industries that are sensitive to changes in consumer discretionary spending habits.
Geographic and Global Risk Significant public health epidemics or pandemics may adversely affect our business, results of operations and financial condition. A public health epidemic or pandemic can significantly impact our business or those of our Core Customers or suppliers, particularly if located in geographies in which we have significant operations.
We compete with numerous smaller distributors on a local level, as well as with a limited number of larger, traditional broadline foodservice distributors.
Our future success will be largely dependent upon our ability to profitably meet our customers’ needs for certain gourmet foods and ingredients, varying drop sizes, high service levels and timely delivery. We compete with numerous smaller distributors on a local level, as well as with a limited number of larger, traditional broadline foodservice distributors.
Removed
For instance, the outbreak of the COVID-19 pandemic had an adverse impact on numerous aspects of our business, financial condition and results of operations including, but not limited to, our growth, product costs, supply chain disruptions, labor shortages, logistics constraints, customer demand for our products and industry demand generally, consumer spending, our liquidity, the price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally.
Added
Changes in our credit profile may affect our relationship with our suppliers, which could have a material adverse effect on our liquidity. Changes in our credit profile may affect the way our suppliers view our ability to make payments and may induce them to shorten the payment terms of their invoices if they perceive our indebtedness to be high.
Removed
The Pandemic may also have exacerbated many of the other risks described in this section or may have the potential to do so in the future.
Added
Given the large dollar amounts and volume of our purchases from suppliers, a change in payment terms may have a material adverse effect on our liquidity and our ability to make payments to our suppliers and, consequently, may have a material adverse effect on us. 16 We have significant competition from a variety of sources, and we may not be able to compete successfully.
Removed
If these service providers do not perform effectively due to breach or system failure, we may not be able to achieve the expected benefits and our business may be disrupted.
Added
The United States government and foreign governments may also take actions that may impact the purchase and production of goods, including imposing tariffs or other regulations on certain goods shipped, that may increase costs for goods transported globally.
Removed
Additionally, information technology systems continue to evolve and, in order to remain competitive, we must implement new technologies in a timely and efficient manner. Our failure to implement timely and/or successfully new technologies may adversely affect our business and competitiveness and, consequently, our results of operations. 22 Our investments in information technology may not produce the benefits that we anticipate.
Added
Price reductions by our manufacturers of products that we sell could cause the value of our inventory to decline. Also, these price reductions could cause our customers to demand lower sales prices for these products, possibly decreasing our margins and profitability on sales.
Removed
We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.
Added
The value of our inventory could decline as a result of manufacturer price reductions with respect to products that we sell. Such a decline could have an adverse effect on our revenues. Also, decreases in the market prices of products that we sell could cause customers to demand lower sales prices from us.
Removed
Such measures could include deferring capital expenditures (including our entry into new markets, including through acquisitions) and reducing or eliminating other discretionary uses of cash. 27 Risks Relating to Ownership of our Common Stock Concentration of ownership among our existing executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions.
Added
These price reductions could reduce our margins and profitability on sales with respect to the lower-priced products to the extent that we purchased our inventory of these products at the higher prices prior to the manufacturers price reductions. Reductions in our margins and profitability on sales could have a material adverse effect on our business.
Added
Further, the growing use of social media by consumers has greatly increased the speed and extent that information or misinformation and opinions can be shared. Negative posts or comments about us, our brands, or our products on social media could seriously damage our brands and reputation.
Added
Additionally, negative reaction to our marketing and advertising, including our social media content, could result in damage to our brands and reputation. We may need to recall our products if they become adulterated.
Added
For example, customers have increasingly focused on well-being, including reducing sodium and added sugar consumption or using weight-loss drugs to reduce consumption overall or change consumption patterns, as well as the source and authenticity of ingredients in the foods they consume.
Added
We rely on independent third-party certifications, such as certifications of our products as “organic” or “Non-GMO,” to differentiate our products from others. We must comply with the requirements of independent organizations or certification authorities in order to label our products as certified organic.
Added
For example, we can lose our “organic” certification if a manufacturing plant becomes contaminated with non-organic materials, or if it is not properly cleaned after a production run. In addition, all raw materials must be certified organic.
Added
The loss of any independent certifications could adversely affect our market position as an organic and natural products company, which could harm our business. 21 Our business operations and future development could be significantly disrupted if we lose key members of our management team.
Added
Increasingly, regulators, consumers, customers, investors, employees and other stakeholders are focusing on ESG matters and related disclosures. These changing rules, public disclosure regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased management time and attention spent complying with or meeting such regulations and expectations.
Added
For example, developing and acting on initiatives within the scope of ESG, and collecting, measuring and reporting ESG-related information and metrics can be costly, difficult and time consuming and is subject to evolving reporting standards, including the SEC’s proposed climate-related reporting requirements, and similar proposals by other international regulatory bodies.
Added
This rapidly changing environment may result in increased general and administrative expenses. We may also communicate certain initiatives and goals regarding environmental matters, diversity and other ESG-related matters. These initiatives and goals could be difficult and expensive to implement, and we could be criticized for the accuracy, adequacy or completeness of the disclosure.
Added
Further, statements about our ESG-related initiatives and goals, and progress against those goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
Added
In addition, we could be criticized for the scope or nature of such initiatives or goals, or for any revisions to these goals.
Added
If our ESG-related data, processes and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our goals within the scope of ESG on a timely basis, or at all, our reputation, business, results of operations and financial condition could be adversely impacted.
Added
Additionally, information technology systems, including those used by cyber attackers, continue to evolve and, in order to remain competitive, we must implement new technologies in a timely and efficient manner. For example, to the extent artificial intelligence capabilities improve and are increasingly adopted, they may be used to identify vulnerabilities and craft increasingly sophisticated cybersecurity attacks.
Added
Attachments crafted with artificial intelligence tools could directly attack information systems with greater speed and/or efficiency than a human threat actor or create more effective phishing emails. Vulnerabilities may also be introduced from the use of artificial intelligence by us, our customers, suppliers, and other business partners and third-party providers.
Added
Use of artificial intelligence by us or such third parties, whether authorized or unauthorized, increases the risk that our intellectual property and other proprietary information will be unintentionally disclosed. Our failure to implement timely and/or successfully new technologies may adversely affect our business and competitiveness and, consequently, our results of operations.
Added
Legal and Regulatory Risk Product liability claims could have a material adverse effect on our business, financial condition or results of operations. Like any other distributor of food products, we face an inherent risk of exposure to product liability claims if the products we sell cause injury or illness.
Added
Disclosure requirements under SB 253 are expected to be outlined by the California Air Resources Board (“CARB”) in July 2025, with disclosure obligations set to take effect 27 starting in 2026 on or by a date to be determined by CARB.
Added
Non-compliance with the requirements of AB 1305 could expose us to fines of up to $2,500 per individual violation, up to a total of $500,000. Compliance with these climate-related disclosure rules will require additional time and attention of management and financial resources.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Chief Information Officer, Vice President of Infrastructure, and Security Administrator have responsibility of cybersecurity oversight of the Company and each have 12, 15, and 6 years of cybersecurity experience, respectively. The Security Administrator reports to the Vice President of Infrastructure, who in turn reports to the Chief Information Officer.
Biggest changeOur Chief Information Officer, Vice President of Infrastructure, and Security Administrator have responsibility of cybersecurity oversight of the Company and each have 13, 16, and 7 years of cybersecurity experience, respectively. The Security Administrator reports to the Vice President of Infrastructure, who in turn reports to the Chief Information Officer.
For more information on risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, see “ Information technology system failures, cybersecurity incidents or other disruptions to our use of technology and networks could interrupt our operations and adversely affect our business ” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K.
For more information on risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, see “ Information technology system failures, cybersecurity incidents or other disruptions to our use of technology and networks could interrupt our operations and adversely affect our business ” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K.
Members of the Board receive regular quarterly cybersecurity updates from our Chief Information Officer, including updates on existing and new cybersecurity risks, cybersecurity and data privacy incidents (if any) and status on key information security initiatives. 29
Members of the Board receive regular quarterly cybersecurity updates from our Chief Information Officer, including updates on existing and new cybersecurity risks, cybersecurity and data privacy incidents (if any) and status on key information security initiatives. 31
We did not experience a material cybersecurity incident during the fiscal year ended December 29, 2023.
We did not experience a material cybersecurity incident during the fiscal year ended December 27, 2024.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeState / Country Number of Facilities Total Square Footage California 12 922,400 Texas 6 370,900 Maryland 4 324,500 United Arab Emirates 2 299,300 Massachusetts 5 287,300 New York 2 246,100 Florida (2) 4 235,000 Oregon 3 211,300 New Jersey 2 206,900 Illinois 3 144,200 Ohio 2 120,400 Nevada 3 117,600 Canada 4 99,400 Washington 2 94,000 Arizona 2 60,800 Qatar 1 43,200 Tennessee 1 32,800 Connecticut (1) 1 29,200 Michigan 1 14,900 Oman 3 11,800 Colorado 1 3,600 Total 64 3,875,600 (1) Represents our corporate headquarters in Ridgefield, Connecticut.
Biggest changeState / Country Number of Facilities Total Square Footage California 11 801,400 Texas 6 392,000 Maryland 4 324,500 United Arab Emirates 3 319,500 Massachusetts 7 287,300 New York 2 246,100 Florida (2) 4 235,000 Oregon 3 211,300 New Jersey 2 206,900 Illinois 3 144,200 Ohio 2 120,400 Nevada 3 117,600 Canada 4 99,400 Washington 1 83,500 Arizona 1 46,300 Qatar 1 43,200 Michigan 2 33,000 Tennessee 1 32,800 Connecticut (1) 2 29,200 Oman 3 14,500 Colorado 2 13,700 Total 67 3,801,800 (1) Includes our corporate headquarters in Ridgefield, Connecticut.
Item 2. PROPERTIES We operate 52 distributions centers located in the United States, Canada, Qatar, Oman, and United Arab Emirates, totaling approximately 3.0 million square feet.
Item 2. PROPERTIES We operate 49 distributions centers located in the United States, Canada, Qatar, Oman, and United Arab Emirates, totaling approximately 3.0 million square feet.
The following table sets forth our significant distribution, protein processing, corporate and other support facilities by state or country and their approximate aggregate square footage as of February 14, 2024.
The following table sets forth our significant distribution, protein processing, corporate and other support facilities by state or country and their approximate aggregate square footage as of December 27, 2024.
We own two distribution facilities in Massachusetts with a combined 241,000 square feet, two distribution centers in Ohio with a combined 120,397 square feet, and a 10,000 square foot protein processing facility and distribution center in Chicago, Illinois. All of our other properties are leased.
We own two distribution facilities in Massachusetts with a combined 241,000 square feet, two distribution centers in Ohio with a combined 120,400 square feet, and a 10,000 square foot protein processing facility and distribution center in Chicago, Illinois. Additionally we own an airplane hangar in Connecticut. All of our other properties are leased.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeNASDAQ COMPOSITE INDEX AND THE S&P SMALLCAP FOOD DISTRIBUTOR INDEX ASSUMES $100 INVESTED ON DECEMBER 28, 2018 31 December 28, 2018 December 27, 2019 December 25, 2020 December 24, 2021 December 30, 2022 December 29, 2023 The Chefs’ Warehouse, Inc. $ 100.00 $ 121.19 $ 76.25 $ 103.96 $ 106.22 $ 93.94 NASDAQ Composite Index $ 100.00 $ 136.78 $ 194.47 $ 237.73 $ 158.96 $ 227.98 S&P Smallcap Food Distributor Index $ 100.00 $ 93.64 $ 99.92 $ 193.62 $ 177.82 $ 145.61 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 Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs September 30, 2023 to October 29, 2023 — $ — — — October 30, 2023 to November 24, 2023 1,025 23.46 — — November 25, 2023 to December 29, 2023 344 28.70 — — Total 1,369 $ 24.77 — — (1) During the thirteen weeks ended December 29, 2023, we withheld 1,369 shares of our common stock to satisfy tax withholding requirements upon the vesting of restricted shares of our common stock awarded to certain of our officers and key employees.
Biggest changeCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN AMONG THE CHEFS’ WAREHOUSE, INC., NASDAQ COMPOSITE INDEX AND THE S&P SMALLCAP FOOD DISTRIBUTOR INDEX 33 December 27, 2019 December 25, 2020 December 24, 2021 December 30, 2022 December 29, 2023 December 27, 2024 The Chefs’ Warehouse, Inc. $ 100.00 $ 62.92 $ 85.78 $ 87.65 $ 77.51 $ 128.21 NASDAQ Composite Index $ 100.00 $ 142.17 $ 173.80 $ 116.21 $ 166.67 $ 218.97 S&P Smallcap Food Distributor Index $ 100.00 $ 106.70 $ 206.77 $ 189.89 $ 155.51 $ 175.45 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) Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs (2) September 28, 2024 to October 25, 2024 — $ — — $ 90,000 October 26, 2024 to November 22, 2024 2,297 39.95 — 90,000 November 23, 2024 to December 27, 2024 162,514 45.55 162,159 82,617 Total 164,811 $ 45.47 162,159 $ 82,617 (1) During the thirteen weeks ended December 27, 2024, we withheld 164,811 shares of our common stock to satisfy tax withholding requirements upon the vesting of restricted shares of our common stock awarded to certain of our officers and key employees resulting from either elections under 83(b) of the Internal Revenue Code of 1986, as amended, or upon vesting of such awards, in addition to shares purchased as part of a publicly announced program.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Chefs’ Warehouse, Inc. Common Stock Our common stock is publicly traded under the symbol “CHEF” on the NASDAQ Global Select Market. As of December 29, 2023, there were 213 holders of record of our common stock.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Chefs’ Warehouse, Inc. Common Stock Our common stock is publicly traded under the symbol “CHEF” on the NASDAQ Global Select Market. As of December 27, 2024, there were 94 holders of record of our common stock.
Performance Graph The following graph compares the cumulative total stockholder return on our common stock during the period from December 28, 2018 through December 29, 2023 with the cumulative total return on the NASDAQ Composite and the S&P Smallcap Food Distributor Index.
Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock during the period from December 27, 2019 through December 27, 2024 with the cumulative total return on the NASDAQ Composite and the S&P Smallcap Food Distributor Index.
This does not include the number of persons whose stock is in nominee or “street” name accounts through brokers. We have never paid a cash dividend on our common stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future.
This does not include the number of persons whose stock is in nominee or “street” name accounts through brokers. We have never paid, and have no immediate plans to pay, cash dividends on our common stock.
Share Repurchase Program On November 1, 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.
(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. Equity Compensation Plan Information See Part III, Item 12 for information regarding securities authorized for issuance under our equity compensation plans.
The comparison assumes that $100 was invested on December 28, 2018 in our common stock and in each of the foregoing indices and assumes reinvestment of dividends, if any.
The comparison assumes that $100 was invested on December 27, 2019 in our common stock and in each of the foregoing indices and assumes reinvestment of dividends, if any. The comparisons in the graph below are based on historical data and are not indicative of, or intended to forecast, future performance of our common stock.
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COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN AMONG THE CHEFS’ WAREHOUSE, INC.
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Shares Issued for Acquisitions On May 1, 2023, the Company issued 75,008 shares of their common stock in connection with an acquisition, with an approximate value of $2,496 based on the trading price of the Company’s common stock on the date of acquisition.
Removed
The shares were issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, to the sellers as partial consideration. Equity Compensation Plan Information See Part III, Item 12 for information regarding securities authorized for issuance under our equity compensation plans.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeNet cash provided by financing activities was $9.0 million for fiscal 2023 driven primarily by $60.0 million of incremental borrowing on our asset-based loan facility, partially offset by payments made on debt obligations of $31.2 million, earn-out payments of $11.6 million, finance lease payments of $4.3 million, $2.1 million of shares surrendered to pay withholding taxes and $1.7 million of deferred financing costs.
Biggest changeNet cash used by financing activities was $38.5 million for fiscal 2024 driven primarily by $23.0 million of payments of debt and other financing obligations, $26.4 million of payments under our asset-based loan and revolving credit facilities, $17.4 million used to repurchase our common stock, $7.4 million paid for shares surrendered to pay tax withholding related to the vesting of equity incentive plan awards, $7.1 million of finance lease payments and $3.8 million of earn-out payments, partially offset by $46.4 million of incremental borrowings on our asset-based loan and revolving credit facilities. 40 Off-Balance Sheet Arrangements As of December 27, 2024, we did not have any off-balance sheet arrangements.
Our cost of sales may not be comparable to other similar companies within our industry. • Selling, general and administrative expenses: Selling, general and administrative expenses include facilities costs, product shipping and handling costs, warehouse costs, and other selling, general and administrative costs. • Other operating expenses: Other operating expenses includes expenses primarily related to changes in the fair value of the Company’s contingent earn-out liabilities, gains and losses on asset disposals, asset impairments and certain third-party deal costs incurred in connection with business acquisitions or financing arrangements. • Interest expense: Interest and other expense consists primarily of interest on our outstanding indebtedness and, as applicable, the amortization or write-off of deferred financing fees.
Our cost of sales may not be comparable to other similar companies within our industry. • Selling, general and administrative expenses: Selling, general and administrative expenses include facilities costs, product shipping and handling costs, warehouse costs, and other selling, general and administrative costs. • Other operating expenses: Other operating expenses includes expenses primarily related to changes in the fair value of the Company’s contingent earn-out liabilities, gains and losses on asset disposals, asset impairments, certain third-party deal costs incurred in connection with business acquisitions or financing arrangements and certain other costs. • Interest expense: Interest expense consists primarily of interest on our outstanding indebtedness and, as applicable, the amortization or write-off of deferred financing fees.
The final purchase price was $88.2 million consisting of $72.2 million paid in cash at closing, $3.5 million paid upon settlement of a net working capital true-up, the issuance of a $10.0 million unsecured note and 75,008 shares of the Company’s common stock with an approximate value of $2.5 million based on the trading price of the Company’s common stock on the date of acquisition.
The final purchase price was $88.2 million consisting of $72.2 million paid in cash at closing, $3.6 million paid upon settlement of a net working capital true-up, the issuance of a $10.0 million unsecured note and 75,008 shares of the Company’s common stock with an approximate value of $2.5 million based on the trading price of the Company’s common stock on the date of acquisition.
Management has discussed the development and selection of these critical accounting policies with our board of directors, and the board of directors has reviewed the above disclosure. Our consolidated financial statements contain other items that require estimation, but are not as critical as those discussed above. These other items include our calculations for bonus accruals, depreciation and amortization.
Management has discussed the development and selection of these critical accounting policies with our board of directors, and the board of directors has reviewed the above disclosure. Our consolidated financial statements contain other items that require estimation, but are not as critical as those discussed above. These other items include our calculations for bonus accruals, 42 depreciation and amortization.
Changes in estimates and assumptions used in these and other items could have an effect on our consolidated financial statements. 40 Recent Accounting Pronouncements See Note 1 “Operations and Basis of Presentation” to our consolidated financial statements for a full description of recent accounting pronouncements including the respective expected dates of adoption and expected effects on our consolidated financial statements.
Changes in estimates and assumptions used in these and other items could have an effect on our consolidated financial statements. Recent Accounting Pronouncements See Note 1 “Operations and Basis of Presentation” to our consolidated financial statements for a full description of recent accounting pronouncements including the respective expected dates of adoption and expected effects on our consolidated financial statements.
Our Growth Strategies and Outlook We continue to invest in our people, facilities and technology in an effort to achieve the following objectives and maintain our premier position within the specialty foodservice distribution market: • sales and service territory expansion; • operational excellence and high customer service levels; 33 • expanded purchasing programs and improved buying power; • product innovation and new product category introduction; • operational efficiencies through system enhancements; and • operating expense reduction through the centralization of general and administrative functions.
Our Growth Strategies and Outlook We continue to invest in our people, facilities and technology in an effort to achieve the following objectives and maintain our premier position within the specialty foodservice distribution market: • sales and service territory expansion; 35 • operational excellence and high customer service levels; • expanded purchasing programs and improved buying power; • product innovation and new product category introduction; • operational efficiencies through system enhancements; and • operating expense reduction through the centralization of general and administrative functions.
This mix shift is most significantly impacted by the introduction of new categories of products in markets that we have more recently entered, impact of 34 product mix from acquisitions, as well as the continued growth in item penetration on higher velocity items such as dairy products.
This mix shift is most significantly impacted by the introduction of new categories of products in markets that we have more recently entered, impact of 36 product mix from acquisitions, as well as the continued growth in item penetration on higher velocity items such as dairy products.
Claims in excess of certain levels are insured by external parties. See Note 16 “Commitments and Contingencies” to our consolidated financial statements for further detail. • Contingent earn-out liabilities: Certain acquisitions involve contingent consideration, typically payable if certain financial performance targets are obtained.
Claims in excess of certain levels are insured by external parties. See Note 17 “Commitments and Contingencies” to our consolidated financial statements for further detail. • Contingent earn-out liabilities: Certain acquisitions involve contingent consideration, typically payable if certain financial performance targets are obtained.
In recent years, our sales to existing and new customers have increased through the continued growth in demand for specialty food and center-of-the-plate products in general; increased market share driven by our large percentage of sophisticated and experienced sales professionals, our high-quality customer service and our extensive breadth and depth of product offerings, including, as a result of our acquisitions; the expansion of our existing distribution centers; our entry into new distribution centers, including the construction of new distribution centers in San Francisco, Toronto, Dallas, Los Angeles and Miami; and the import and sale of our proprietary brands.
In recent years, our sales to existing and new customers have increased through the continued growth in demand for specialty food and center-of-the-plate products in general; increased market share driven by our large percentage of sophisticated and experienced sales professionals, our high-quality customer service and our extensive breadth and depth of product offerings, including, as a result of our acquisitions; the expansion of our existing distribution centers; our entry into new distribution centers, including the construction of new distribution centers in Portland, San Francisco, United Arab Emirates, Philadelphia, Los Angeles and Miami; and the import and sale of our proprietary brands.
The discussion of our fiscal 2022 results, compared with fiscal 2021 results, can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 30, 2022.
The discussion of our fiscal 2023 results, compared with fiscal 2022 results, can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 29, 2023.
Our ratio of selling, general and administrative expenses to net sales increased by 70 basis points due to increased near-term costs associated with our investments in facilities and acquisitions.
Our ratio of selling, general and administrative expenses to net sales increased 20 basis points due to increased near-term costs associated with our investments in facilities and acquisitions.
Concurrently with the issuance of the 2028 Convertible Notes, we exchanged or repurchased approximately $158.3 million principal amount of 1.875% Convertible Senior Notes ( the“2024 Convertible Notes”) for an aggregate consideration consisting of approximately $159.7 million in cash, which includes accrued interest on the 2024 Convertible Notes, and approximately 324,066 shares of the Company’s common stock.
Concurrently with the issuance of the 2028 Convertible Notes, we exchanged or repurchased approximately $158.3 million principal amount of the 2024 Convertible Notes for an aggregate consideration consisting of approximately $159.7 million in cash, which includes accrued interest on the 2024 Convertible Notes, and approximately 324,066 shares of the Company’s common stock.
We may be required to increase or decrease our allowance for doubtful accounts due to various factors, including the overall economic environment and particular circumstances of individual customers.
We may be required to increase or decrease our allowance for credit losses due to various factors, including the overall economic environment and particular circumstances of individual customers.
Our growth has allowed us to improve upon our organization’s infrastructure, open new distribution facilities and pursue selective acquisitions. Over the last several years, we have increased our distribution capacity to approximately 3.0 million square feet in 52 distribution facilities as of February 14, 2024.
Our growth has allowed us to improve upon our organization’s infrastructure, open new distribution facilities and pursue selective acquisitions. Over the last several years, we have increased our distribution capacity to approximately 3.0 million square feet in 49 distribution facilities as of December 27, 2024.
We had outstanding letters of credit of approximately $30.1 million and $25.8 million at December 29, 2023 and December 30, 2022, respectively. Substantially all of our assets are pledged as collateral to secure our borrowings under our credit facilities. See Note 9 “Debt Obligations” to our consolidated financial statements for a full description of our debt instruments.
We had outstanding letters of credit of approximately $34.4 million and $30.1 million at December 27, 2024 and December 29, 2023, respectively. Substantially all of our assets are pledged as collateral to secure our borrowings under our credit facilities. See Note 9 “Debt Obligations” to our consolidated financial statements for a full description of our debt instruments.
Results of Operations This discussion focuses on our fiscal 2023 results, compared with fiscal 2022 results.
Results of Operations This discussion focuses on our fiscal 2024 results, compared with fiscal 2023 results.
We also estimate receivables that will ultimately be uncollectible based upon historical write-off experience. Management incorporates current macro-economic factors in existence as of the balance sheet date that may impact the food-away-from-home industry and/or its customers, and specifically, beginning in the first quarter of fiscal 2020, the impact of the Pandemic.
We also estimate receivables that will ultimately be uncollectible based upon historical write-off experience. Management incorporates current macro-economic factors in existence as of the balance sheet date that may impact the food-away-from-home industry and/or its customers.
See Note 4 “Fair Value Measurements” to our consolidated financial statements for details on our contingent earn-out liabilities outstanding as of December 29, 2023.
See Note 4 “Fair Value Measurements” to our consolidated financial statements for details on our contingent earn-out liabilities outstanding as of December 27, 2024.
Total goodwill as of December 29, 2023 and December 30, 2022 was $356.0 million and $287.1 million, respectively. Intangible assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Total goodwill as of December 27, 2024 and December 29, 2023 was $356.3 million and $356.0 million, respectively. Intangible assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
As of December 29, 2023 and December 30, 2022, we had valuation allowances of $2.1 million and $1.6 million, respectively, relating to certain net operating losses that may not be realizable in the future based on taxable income forecasts and certain state net operating loss limitations.
As of December 29, 2023, we had a valuation allowance of $2.1 million, relating to certain net operating losses that may not be realizable in the future based on taxable income forecasts and certain state net operating loss limitations.
Over the period from fiscal 2021 through fiscal 2023, we have invested significantly in acquisitions, infrastructure and management.
Over the period from fiscal 2022 through fiscal 2024, we have invested significantly in acquisitions, infrastructure and management.
We have evaluated the economic characteristics of our different geographic markets, including our recently acquired businesses, along with the similarity of the operations and margins, nature of the products, type of customer and methods of distribution of products and the regulatory environment in which we operate.
We have evaluated the economic characteristics of our different geographic markets, including our recently acquired businesses, along with the similarity of the operations and margins, nature of the products, type of 41 customer and methods of distribution of products and the regulatory environment in which we operate. As of December 27, 2024, we maintain four reporting units.
We deferred lender and third-party fees of $10.9 million as debt issuance costs to be amortized over the term of the term loan. Arrangement and third-party transaction costs of $4.5 million were expensed as incurred.
We deferred lender and third-party fees of $10.9 million as debt issuance costs to be amortized over the term of the term loan.
For the fiscal years ended December 29, 2023 and December 30, 2022, the Company assessed the recoverability of goodwill using a qualitative analysis and determined that it is more likely than not that the fair value of its reporting units exceeded their respective carry values.
For the fiscal year ended December 29, 2023, the Company assessed the recoverability of goodwill using a qualitative analysis and determined that it is more likely than not that the fair value of its reporting units exceeded their respective carry values. As a result, no goodwill impairments were identified for those periods.
Indebtedness The following table presents selected financial information on our indebtedness (in thousands): December 29, 2023 December 30, 2022 December 24, 2021 Senior secured term loan $ 276,250 $ 299,250 $ 168,675 Total convertible debt $ 327,184 $ 333,184 $ 204,000 Borrowings outstanding on asset-based loan facility $ 100,000 $ 40,000 $ 20,000 Finance leases and other financing obligations $ 31,892 $ 13,548 $ 11,602 As of December 29, 2023, we have various floating- and fixed-rate debt instruments with varying maturities for an aggregate principal amount of $713.4 million.
Indebtedness The following table presents selected financial information on our indebtedness: December 27, 2024 December 29, 2023 December 30, 2022 Senior secured term loan $ 260,000 $ 276,250 $ 299,250 Total convertible debt $ 287,500 $ 327,184 $ 333,184 Borrowings outstanding on asset-based loan facility $ 120,000 $ 100,000 $ 40,000 Finance leases and other financing obligations $ 52,673 $ 31,892 $ 13,548 As of December 27, 2024, we have various floating- and fixed-rate debt instruments with varying maturities for an aggregate principal amount of $672.5 million.
Other Operating Expenses, Net 2023 2022 $ Change % Change Other operating expenses $ 8,773 $ 14,679 $ (5,906) (40.2) % The decrease in other operating expenses relates primarily to non-cash charges of $3.1 million for changes in the fair value of our contingent earn-out liabilities in fiscal 2023 compared to non-cash charges of $8.5 million in the prior year period and a year over year decrease of $2.3 million primarily related to third-party deal costs incurred in connection with business acquisitions and financing arrangements.
Other Operating Expenses, Net 2024 2023 $ Change % Change Other operating expenses $ 1,088 $ 8,773 $ (7,685) (87.6) % The decrease in other operating expenses relates primarily to non-cash credits of $3.3 million for changes in the fair value of our contingent earn-out liabilities in fiscal 2024 compared to non-cash charges of $3.1 million in the prior year and a year over year decrease of $2.6 million primarily related to third-party deal costs incurred in connection with business acquisitions and financing arrangements, partially offset by charges associated with employee severance in fiscal 2024.
Provision for Income Tax Expense 2023 2022 $ Change % Change Provision for income tax expense $ 20,879 $ 14,139 $ 6,740 47.7 % Effective tax rate 37.6 % 33.8 % The effective tax rate in the current period increased primarily driven by current period for return-to-provision adjustments of approximately $2.1 million identified in the completion of our fiscal 2022 tax return and the impact of those adjustments on the fiscal 2023 annual effective tax rate. 36 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.
Provision for Income Tax Expense 2024 2023 $ Change % Change Provision for income tax expense $ 24,053 $ 20,879 $ 3,174 15.2 % Effective tax rate 30.2 % 37.6 % The lower effective tax rate for fiscal 2024 was primarily driven by a $2.1 million charge in fiscal 2023 for return-to-provision adjustments identified in the completion of our fiscal 2022 tax return and the impact of those adjustments on the fiscal 2023 estimated annual effective tax rate. 38 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.
Cash Flows Fiscal Years Ended (in thousands) December 29, 2023 December 30, 2022 December 24, 2021 Cash provided by (used in) operating activities $ 61,639 $ 23,134 $ (19,899) Cash used in investing activities $ (179,311) $ (232,023) $ (48,991) Cash provided by (used in) financing activities $ 9,010 $ 253,215 $ (9,222) Our cash provided by operating activities is predominately driven by net sales to our customers.
Cash Flows Fiscal Years Ended December 27, 2024 December 29, 2023 December 30, 2022 Net cash provided by operating activities $ 153,061 $ 61,639 $ 23,134 Net cash used in investing activities $ (49,821) $ (179,311) $ (232,023) Net cash (used in) provided by financing activities $ (38,482) $ 9,010 $ 253,215 Our cash provided by operating activities is predominately driven by net sales to our customers.
We believe several key differentiating factors of our business model have enabled us to execute our strategy consistently and profitably across our expanding customer base.
Our Allen Brothers subsidiary sells certain of our center-of-the-plate products directly to consumers. We believe several key differentiating factors of our business model have enabled us to execute our strategy consistently and profitably across our expanding customer base.
Our provision for income taxes primarily reflects a combination of income earned and taxed in the various U.S. federal, state, and Middle East jurisdictions.
Income Taxes The determination of our provision for income taxes requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. Our provision for income taxes primarily reflects a combination of income earned and taxed in the various U.S. federal, state, and Middle East jurisdictions.
Off-Balance Sheet Arrangements As of December 29, 2023, we did not have any off-balance sheet arrangements. Critical Accounting Estimates The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
Critical Accounting Estimates The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
The decrease was partially offset by an impairment on customer relationship intangible assets of $1.8 million related to the loss of a significant Hardie’s customer post acquisition.
Additionally, fiscal 2023 reflected an impairment charge on customer relationship intangible assets of $1.8 million related to the loss of a significant Hardie’s customer post-acquisition.
This evaluation considers several factors, including recent results of operations, scheduled reversal of deferred tax liabilities, future taxable income and tax planning strategies.
This evaluation considers several factors, including recent results of operations, scheduled reversal of deferred tax liabilities, future taxable income and tax planning strategies. As of December 27, 2024, we did not have a valuation allowance.
Our capital expenditures, excluding cash paid for acquisitions, were approximately $57.4 million for fiscal 2023. We believe our capital expenditures, excluding cash paid for acquisitions, for fiscal 2024 will be approximately $35.0 million to $45.0 million.
Our capital expenditures, excluding cash paid for acquisitions, were approximately $49.5 million for fiscal 2024. We believe our capital expenditures, excluding cash paid for acquisitions, for fiscal 2025 will be approximately $40.0 million to $50.0 million.
The qualitative analysis considers various factors including macroeconomic conditions, market conditions, industry trends, cost factors and financial performance, among others. If our qualitative assessment indicates that goodwill impairment is more likely than not, we proceed to perform a quantitative assessment to determine the fair value of the reporting unit.
In testing goodwill for impairment, we may elect to perform a qualitative assessment to evaluate whether it is more likely than not that the fair value of each reporting unit is less than its carrying amount. The qualitative analysis considers various factors including macroeconomic conditions, market conditions, industry trends, cost factors and financial performance, among others.
We actively manage our inventory levels as we seek to minimize the risk of loss and have consistently achieved a relatively high level of inventory turnover. Business Combinations We account for acquisitions in accordance with Accounting Standards Codification Topic 805 “Business Combinations.” Assets acquired and liabilities assumed are recorded at their estimated fair values, as of the acquisition date .
Business Combinations We account for acquisitions in accordance with Accounting Standards Codification Topic 805 “Business Combinations.” Assets acquired and liabilities assumed are recorded at their estimated fair values, as of the acquisition date .
Organic case count increased approximately 9.5% in our specialty category. In addition, specialty unique customers and placements increased 12.9% and 12.1%, respectively, compared to the prior year. Pounds sold in our center-of- 35 the-plate category increased 6.3% compared to the prior year. Estimated inflation was 3.0% in our specialty category and 2.7% in our center-of-the-plate category compared to fiscal 2022.
Organic case count increased approximately 4.6% in our specialty category. In addition, specialty unique customers and placements increased 6.6% and 11.6%, respectively, compared to the prior year. Organic pounds sold in our center-of-the-plate category increased 3.3% compared to the prior year.
We serve more than 44,000 Core Customer locations, primarily located in our twenty-three geographic markets across the United States, the Middle East and Canada, and the majority of our customers are independent restaurants and fine dining establishments. Our Allen Brothers subsidiary sells certain of our center-of-the-plate products directly to consumers.
We offer more than 88,000 SKUs, ranging from high-quality specialty foods and ingredients to basic ingredients and staples, produce and center-of-the-plate proteins. We serve more than 50,000 Core Customer locations, primarily located in our twenty-three geographic markets across the United States, the Middle East and Canada, and the majority of our customers are independent restaurants and fine dining establishments.
When a quantitative analysis is required, we estimate the fair value of our reporting units using an income approach that incorporates the use of a discounted cash flow model that involves many management assumptions that are based upon future growth projections. Assumptions include estimates of future revenue based upon budget projections and growth rates.
The income approach incorporates the use of a discounted cash flow model that involves many management assumptions that are based upon future growth projections. Assumptions include estimates of future revenue based upon budget projections and growth rates. We develop estimates of future levels of gross and operating profits and projected capital expenditures.
Selling, General and Administrative Expenses 2023 2022 $ Change % Change Selling, general and administrative expenses $ 704,758 $ 518,219 $ 186,539 36.0 % Percentage of net sales 20.5 % 19.8 % The increase in selling, general and administrative expenses was primarily due to higher depreciation and amortization and higher costs associated with compensation, including benefits and facilities costs to support sales growth.
Selling, General and Administrative Expenses 2024 2023 $ Change % Change Selling, general and administrative expenses $ 784,852 $ 704,758 $ 80,094 11.4 % Percentage of net sales 20.7 % 20.5 % The increase in selling, general and administrative expenses was primarily due to higher depreciation and amortization expenses driven by acquisitions and facility investments, and higher costs associated with compensation and benefits, facilities and distribution to support sales growth.
Fiscal Years Ended (in thousands) December 29, 2023 December 30, 2022 December 24, 2021 Net sales $ 3,433,763 $ 2,613,399 $ 1,745,757 Cost of sales 2,619,289 1,994,763 1,355,272 Gross profit 814,474 618,636 390,485 Selling, general and administrative expenses 704,758 518,219 379,252 Other operating expenses 8,773 14,679 422 Operating income 100,943 85,738 10,811 Interest and other expense, net 45,474 43,849 17,587 Income (loss) before income taxes 55,469 41,889 (6,776) Provision for income tax expense (benefit) 20,879 14,139 (1,853) Net income (loss) $ 34,590 $ 27,750 $ (4,923) Fiscal Year Ended December 29, 2023 Compared to Fiscal Year Ended December 30, 2022 The fiscal year ended December 29, 2023 consisted of 52 weeks as compared to the fiscal year ended December 30, 2022, which consisted of 53 weeks.
Fiscal Years Ended December 27, 2024 December 29, 2023 December 30, 2022 Net sales $ 3,794,212 $ 3,433,763 $ 2,613,399 Cost of sales 2,880,065 2,619,289 1,994,763 Gross profit 914,147 814,474 618,636 Selling, general and administrative expenses 784,852 704,758 518,219 Other operating expenses 1,088 8,773 14,679 Operating income 128,207 100,943 85,738 Interest expense 48,675 45,474 43,849 Income before income taxes 79,532 55,469 41,889 Provision for income tax expense 24,053 20,879 14,139 Net income $ 55,479 $ 34,590 $ 27,750 Fiscal Year Ended December 27, 2024 Compared to Fiscal Year Ended December 29, 2023 Net Sales 2024 2023 $ Change % Change Net sales $ 3,794,212 $ 3,433,763 $ 360,449 10.5 % Organic growth contributed $258.9 million, or 7.5%, to sales growth and the remaining growth of $101.6 million, or 3.0%, resulted from prior year acquisitions.
For all financial statement periods presented, there have been no material modifications to the application of these critical accounting policies. Allowance for Doubtful Accounts We analyze customer creditworthiness, accounts receivable balances, payment history, payment terms and historical bad debt levels when evaluating the adequacy of our allowance for doubtful accounts.
Allowance for Credit Losses We analyze customer creditworthiness, accounts receivable balances, payment history, payment terms and historical bad debt levels when evaluating the adequacy of our allowance for credit losses.
Interest Expense 2023 2022 $ Change % Change Interest expense $ 45,474 $ 43,849 $ 1,625 3.7 % Interest expense increased primarily due to higher principal amounts of outstanding debt due to our 2028 convertible notes issued on December 13, 2022, our term loan refinancing on August 23, 2022, an increase in amounts drawn on our asset-based loan facility and higher rates of interest charged on the variable rate portion of our outstanding debt.
Interest Expense 2024 2023 $ Change % Change Interest expense $ 48,675 $ 45,474 $ 3,201 7.0 % Interest expense increased primarily due to higher average principal amounts of outstanding debt due to an increase in finance leases and amounts drawn on our revolving credit facility and higher rates of interest charged on the variable rate portion of our outstanding debt.
Recent Major Acquisitions On May 1, 2023, we acquired substantially all of the equity interests of Oakville Produce Partners, LLC (“GreenLeaf”), a leading produce and specialty food distributor in Northern California.
Through these efforts, we believe that we have been able to expand our customer base, enhance and diversify our product selections, broaden our geographic penetration and increase our market share. Acquisitions On May 1, 2023, we acquired substantially all of the equity interests of Oakville Produce Partners, LLC (“GreenLeaf”), a leading produce and specialty food distributor in Northern California.
Based on this definition, we believe our critical accounting policies include the following: (i) determining our allowance for doubtful accounts, (ii) inventory valuation, with regard to determining inventory balance adjustments for excess and obsolete inventory, (iii) business combinations, (iv) valuing 38 goodwill and intangible assets and (v) accounting for income taxes.
Based on this definition, we believe our critical accounting policies include the following: (i) determining our allowance for credit losses, (ii) business combinations, (iii) valuing goodwill and intangible assets and (iv) accounting for income taxes. For all financial statement periods presented, there have been no material modifications to the application of these critical accounting policies.
As a result, we recognized a $0.6 million impairment charge, $0.4 million net of tax, to fully write-down the net book value of our Cambridge trademark. There have been no other events or changes in circumstances during fiscal 2023 or 2022 indicating that the carrying value of our finite-lived intangible assets are not recoverable.
There have been no other events or changes in circumstances during fiscal 2024 or 2023 indicating that the carrying value of our finite-lived intangible assets are not recoverable. Total finite-lived intangible assets as of December 27, 2024 and December 29, 2023 were $160.4 million and $184.9 million, respectively.
Our accounts receivable balance was $334.0 million and $260.2 million, net of the allowance for doubtful accounts of $21.4 million and $20.7 million, as of December 29, 2023 and December 30, 2022, respectively. Inventory Valuation We adjust our inventory balances for excess and obsolete inventories.
Our accounts receivable balance was $366.3 million and $334.0 million, net of the allowance for credit losses of $22.3 million and $21.4 million, as of December 27, 2024 and December 29, 2023, respectively.
Liquidity The following table presents selected financial information on liquidity (in thousands): December 29, 2023 December 30, 2022 December 24, 2021 Cash and cash equivalents $ 49,878 $ 158,800 $ 115,155 Working capital, (1) excluding cash and cash equivalents $ 295,288 $ 278,315 $ 157,787 Availability under asset-based loan facility $ 172,030 $ 135,827 $ 109,459 (1) We define working capital as current assets less current liabilities. 37 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.
Arrangement and third-party transaction costs of $4.5 million were expensed as incurred. 39 Liquidity The following table presents selected financial information on liquidity: December 27, 2024 December 29, 2023 December 30, 2022 Cash and cash equivalents $ 114,655 $ 49,878 $ 158,800 Working capital, (1) excluding cash and cash equivalents $ 327,992 $ 295,288 $ 278,315 Availability under asset-based loan facility $ 146,674 $ 172,030 $ 135,827 (1) We define working capital as current assets less current liabilities.
Net cash provided by operations was $61.6 million for the fiscal year ended December 29, 2023 compared to $23.1 million for the fiscal year ended December 30, 2022. The increase in cash provided by operating activities was primarily due to a reduction in working capital requirements as we returned to more moderate growth in fiscal 2023 compared to fiscal 2022.
Net cash provided by operations was $153.1 million for the fiscal year ended December 27, 2024 compared to $61.6 million for the fiscal year ended December 29, 2023. The increase in cash provided by operating activities was primarily due to gross profit growth, favorable timing of supplier payments at fiscal year-end and higher accrued compensation compared to the prior year.
Recent Significant Financing Transactions On November 1, 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. On July 7, 2023, we increased the aggregate commitments on our asset-based loan facility to $300.0 million.
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 fiscal 2024, we repurchased and retired 426,235 shares of our common stock at an average purchase price of $40.78 per share.
Overview and Recent Developments 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 70,000 SKUs, ranging from high-quality specialty foods and ingredients to basic ingredients and staples, produce and center-of-the-plate proteins.
All dollar amounts included in the tables in the following discussion are presented in thousands. Overview and Recent Developments Overview We are a premier distributor of specialty foods in the leading culinary markets in the United States, the Middle East and Canada.
Actual results could differ from these assumptions and projections, resulting in us revising our assumptions and, if required, recognizing an impairment loss. Income Taxes The determination of our provision for income taxes requires significant judgment, the use of estimates and the interpretation and application of complex tax laws.
The assessment of the recoverability of goodwill and intangible assets contain uncertainties requiring management to make assumptions and to apply judgment to estimate economic factors and the profitability of future operations. Actual results could differ from these assumptions and projections, resulting in us revising our assumptions and, if required, recognizing an impairment loss.
Gross profit margins decreased 57 basis points in the Company’s specialty category and decreased 57 basis points in the Company’s center-of-the-plate category compared to the prior year period. Overall, our gross margins were relatively consistent with the prior year period.
Gross profit margin increased approximately 37 basis points due to sales growth combined with improved pricing methods and inventory management, as well as changes in volume mix between specialty and center-of-the-plate category sales. Gross profit margins increased 32 basis points in the Company’s specialty category and increased 12 basis points in the Company’s center-of-the-plate category compared to the prior year.
As of December 29, 2023 we maintain four reporting units. 39 In testing goodwill for impairment, we may elect to perform a qualitative assessment to evaluate whether it is more likely than not that the fair value of each reporting unit is less than its carrying amount.
If our qualitative assessment indicates that goodwill impairment is more likely than not, we proceed to perform a quantitative assessment to determine the fair value of the reporting unit. When a quantitative analysis is performed, we estimate the fair value of our reporting units using a combination of income and market approaches.
Removed
Through these efforts, we believe that we have been able to expand our customer base, enhance and diversify our product selections, broaden our geographic penetration and increase our market share.
Added
Estimated inflation was 3.5% in our specialty category and 3.0% in our center-of-the-plate category compared to fiscal 2023. 37 Gross Profit 2024 2023 $ Change % Change Gross profit $ 914,147 $ 814,474 $ 99,673 12.2 % Gross profit margin 24.1 % 23.7 % Gross profit dollars increased primarily as a result of sales growth and price inflation.
Removed
Net Sales 2023 2022 $ Change % Change Net sales $ 3,433,763 $ 2,613,399 $ 820,364 31.4 % Organic growth contributed $214.6 million, or 8.2%, to sales growth. The remaining growth of $605.7 million, or 23.2%, resulted from acquisitions. The incremental 53rd week of the fiscal year ended December 30, 2022 contributed approximately 2.0% to fiscal 2022.
Added
Significant Financing Transactions In December 2024, the 1.875% Convertible Senior Notes ( the “2024 Convertible Notes”) matured and we issued 858,360 shares of our common stock, in accordance with the exercise of conversion rights provisions of the 2024 Convertible Notes, and paid approximately $2.1 million, which included accrued interest on the 2024 Convertible Notes.
Removed
Gross Profit 2023 2022 $ Change % Change Gross profit $ 814,474 $ 618,636 $ 195,838 31.7 % Gross profit margin 23.7 % 23.7 % Gross profit increased primarily due to increased sales volumes. Gross profit margin increased approximately 7 basis points based on the volume mix between specialty and center-of-the-plate category sales.
Added
In March 2024, we amended our senior secured term loan agreement, which reduced the interest rate spread by 75 basis points on our senior secured term loan facility. In October 2024, we further amended our senior secured term loan agreement, which reduced the interest rate spread by an additional 50 basis points.
Removed
On March 1, 2021, we issued $50.0 million aggregate principal amount of our 2024 Convertible Senior Notes at a premium which were offered as an additional issuance of our $150.0 million Convertible Senior Notes due 2024 issued on November 22, 2019.
Added
Additionally, during fiscal 2024, we made voluntary principal prepayments of $14.0 million towards the senior secured term loan. In April 2024, we made a scheduled principal payment of $5.0 million towards the unsecured note issued in connection with the GreenLeaf acquisition. The note is presented under the caption “Finance leases and other financing obligations” in the table above.
Removed
Net proceeds were used to repay all outstanding borrowings under our 2022 tranche of senior secured term loans of $31.2 million and repay a portion of borrowings outstanding under our asset-based loan facility. We incurred transaction costs of approximately $1.4 million which were capitalized as deferred financing fees to be amortized over the term of the underlying debt.
Added
The share repurchases were funded by our available cash. The remaining share purchase authorization was $82.6 million at December 27, 2024. We are not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time. On July 7, 2023, we increased the aggregate commitments on our asset-based loan facility to $300.0 million.
Removed
Fiscal 2022 working capital investment was unusually high due to the rapid recovery from the pandemic. Net cash used in investing activities was $179.3 million in fiscal 2023 driven by $121.9 million in cash to fund acquisitions and $57.4 million in capital expenditures.
Added
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.
Removed
These adjustments are primarily based upon customer demand, inventory age, specifically identified inventory items and overall economic conditions. A sudden and unexpected change in consumer preferences or change in overall economic conditions could result in a significant change to these adjustments that could require a corresponding charge to earnings.
Added
Net cash used in investing activities was $49.8 million in fiscal 2024 driven by $49.5 million in capital expenditures.
Removed
We develop estimates of future levels of gross and operating profits and projected capital expenditures. This methodology includes the use of estimated discount rates based upon industry and competitor analysis as well as other factors. A goodwill impairment loss, if any, would be recognized for the amount by which a reporting unit’s carrying value exceeds its fair value.
Added
This methodology includes the use of estimated discount rates based upon industry and competitor analysis as well as other factors. The market approach of determining fair value, which includes the guideline public company method, is based on comparable market multiples for companies engaged in similar businesses.
Removed
During fiscal 2021, we committed to a plan to shift our brand strategy to leverage the Allen Brothers brand in our New England region and determined the Cambridge trademark did not fit our long-term strategic objectives.
Added
A goodwill impairment loss, if any, would be recognized for the amount by which a reporting unit’s carrying value exceeds its fair value. For the fiscal year ended December 27, 2024, the Company assessed the recoverability of goodwill using a quantitative analysis and determined that the fair value of its reporting units substantially exceeded their respective carry values.
Removed
Total finite-lived intangible assets as of December 29, 2023 and December 30, 2022 were $184.9 million and $155.7 million, respectively. The assessment of the recoverability of goodwill and intangible assets contain uncertainties requiring management to make assumptions and to apply judgment to estimate economic factors and the profitability of future operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed0 unchanged
Biggest changeItem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk Our exposure to interest rate market risk relates primarily to our long-term debt. The Company has various floating- and fixed-rate debt instruments as described in Note 9 “Debt Obligations” to our consolidated financial statements. As of December 29, 2023, we had an aggregate $376.3 million of floating-rate indebtedness.
Biggest changeItem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk Our exposure to interest rate market risk relates primarily to our long-term debt. The Company has various floating- and fixed-rate debt instruments as described in Note 9 “Debt Obligations” to our consolidated financial statements. As of December 27, 2024, we had an aggregate $380.0 million of floating-rate indebtedness.
A 100 basis point increase in market interest rates would decrease our after tax earnings by approximately $2.7 million per annum, holding other variables constant. 41
A 100 basis point increase in market interest rates would decrease our after tax earnings by approximately $2.7 million per annum, holding other variables constant. 43

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