Performance Food Group Company (NYSE:PFGC) Q4 2019 Earnings Conference Call Transcript

Aug 14, 2019 • 09:00 am ET

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Performance Food Group Company (NYSE:PFGC) Q4 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day and welcome to the PFG Fiscal Year Q4 2019 Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by PFG's management and the question-and-answer session. I would now like to turn the call over to Michael Neese, Vice President, Investor Relations for PFG. Please go ahead, sir.

Executive
Michael Neese

Thank you, Maria, and good morning, everyone. We are here this morning with George Holm, Performance Food Group's CEO and Jim Hope, PFG's CFO. We issued a press release regarding our 2019 fiscal fourth quarter and full year results this morning. The results discussed in this call will include GAAP and non-GAAP results adjusted for certain items.

The reconciliation of these non-GAAP measures to the corresponding GAAP measures can be found at the back of the earnings release. You can find our earnings release in the Investor Relations section of our website at pfgc.com. Our remarks in the earnings release contain forward-looking statements and projections of future results.

Please review the cautionary forward-looking statements section in today's earnings release, and our SEC filings for various factors that could cause our actual results to differ materially from our forward-looking statements and projections. And finally, our fiscal 2020 outlook does not include the recently announced acquisition of Reinhart. Now I'd like to turn the call over to George.

Executive
George Holm

Thanks, Michael. Good morning, everyone and thanks for joining our call today. I'd like to go over a few highlights from our fiscal 2019 full-year results. Jim will discuss our detailed fourth quarter financial results and I will come back and discuss the strategic rationale that supports our recent acquisition announcement of Reinhart, and then we will take your questions. Let's turn to our results. 2019 was a successful year for PFG and I'm pleased with our team's execution. Our strong top line growth, combined with increased gross profit per case, led to profitability at the high end of our expectations for the year.

Our core business segments delivered strong financial results led by Vistar's double digit EBITDA growth. Total cases were up 6% slightly exceeding our objective of 3% to 5% for the year. Net sales increased 12.1% to $19.7 billion driven by Vistar. Our independent case growth in food service and the Eby-Brown acquisition.

The increase in net sales also reflects an increase in selling price per case as a result of inflation and mix. For the year we experienced inflation of approximately 1.5%, especially in the center of the plate items such as poultry and meats. Inflation did increase sequentially from Q3 to Q4, which helped fuel our top line. Let's turn to our two segments.

Vistar had a strong year exceeding our expectations with net sales and EBITDA up double digits. We witnessed strong case sales growth in the segments theatre, vending corrections, and retail channels and it was as a result of recent acquisitions. The integration process is going well with Eby-Brown. We are very excited about the opportunities with this business over the next several