US Foods Holding Corp. (NYSE:USFD) Q4 2018 Earnings Conference Call Transcript

Feb 12, 2019 • 10:00 am ET


US Foods Holding Corp. (NYSE:USFD) Q4 2018 Earnings Conference Call Transcript


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Good morning. My name is Mary and I will be your conference operator today. At this time, I would like to welcome everyone to the Q4 (technical difficulty) (Operator Instructions).

Thank you. I will now turn the call over to Melissa Napier. Ma'am, the floor is yours.

Melissa Napier

Thank you. Good morning, everyone. Welcome to our Q4 and Fiscal Year 2018 Conference Call. Joining me today are Pietro Satriano, our CEO; and Dirk Locascio, our CFO. Pietro and Dirk will provide an update on our fourth quarter and full fiscal year 2018 results and provide some perspectives on fiscal year 2019. We'll take your questions after our prepared remarks concludes. Please provide your name, your firm and limit yourself to one question. During today's call and unless otherwise stated, we're comparing our fourth quarter and fiscal year 2018 results to the same periods in fiscal year 2017.

Our earnings release issued earlier this morning and today's presentation slides can be accessed on the Investor Relations page of our website. In addition to historical information, certain statements made during today's call are considered forward-looking statements. Please review the risk factors in our latest Form 10-K filed with the SEC for these potential factors, which could cause our actual results to differ materially from those expressed or implied in those statements. We expect to file our fiscal 2018 Form 10-K later this week.

Lastly, I'd like to point out that during today's call, we will refer to certain non-GAAP financial measures. All reconciliations to the most comparable GAAP financial measures are included in the schedules on our earnings press release.

And now, I'll turn the call over to Pietro to get us started.

Pietro Satriano

Thanks, Melissa. Good morning, everyone. Thanks for joining us for our fourth quarter earnings call. Today, I'd like to cover two topics. First, an overview of our fourth quarter results and second, a brief progress report on the initiatives we outlined at our Investor Day last March. Let's begin on Page 2 with three takeaways that sum up the fourth quarter's results. First, from a volume perspective, we exited the year close to what we discussed in November. Independent case growth exceeded 4%, case growth for all other customers was in line with roughly flat, however healthcare and hospitality fell short of the 2% exit rate that we expected.

Second, we continued to grow operating leverage, with growth in gross profit per case outpacing the growth in OpEx per case, driven by our actions to achieve more favorable customer and private brand mix. And third, because of the few unanticipated items, EBITDA grew 2.4% for the quarter. As Dirk will later explain, the main contributors were unusual in nature and without these items, our EBITDA growth for the quarter would have been closer to 4.5%. As a result, we are reaffirming our outlook provided on the third quarter earnings call that adjusted EBITDA growth for 2019 will be at least 5%.

Before delving further into the quarter's results, I'd like to