The Chefs' Warehouse, Inc. (NASDAQ:CHEF) Q4 2019 Earnings Conference Call - Final Transcript

Feb 12, 2020 • 05:00 pm ET


The Chefs' Warehouse, Inc. (NASDAQ:CHEF) Q4 2019 Earnings Conference Call - Final Transcript


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Greetings and welcome to The Chefs' Warehouse Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to your host, Alex Aldous General Counsel, Corporate Secretary and Chief Government Relations Officer. Please go ahead, sir.

Alexandros Aldous

Thank you operator. Good afternoon, everyone. With me on today's call are Chris Pappas, Founder, Chairman and CEO; and Jim Leddy, our CFO.

By now you should have access to our fourth quarter 2019 earnings press release. It can also be found at under the Investor Relations section. Throughout this conference call we will be presenting non-GAAP financial measures including among others historical and estimated EBITDA and adjusted EBITDA as well as both historical and estimated adjusted net income and adjusted earnings per share. These measurements are not calculated in accordance with GAAP and may be calculated differently in similarly titled non-GAAP financial measures used by other companies. Quantitative reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures appear in today's press release.

Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements, including statements regarding our estimated financial performance. Such forward-looking statements are not guarantees of future performance, and therefore you should not put undue reliance on it. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Some of these risks are mentioned in today's release. Others are discussed in our annual report on Form 10-K and quarterly reports on Form 10-Q which are available on the SEC website.

Today, we are going to provide a business update go over our fourth quarter results in detail and review our 2020 full-year guidance. Then we'll open up the call for questions.

With that I will turn the call over to Chris Pappas. Chris?

Christopher Pappas

Thank you, Alex. And thank you all for joining our fourth quarter 2019 earnings call. Fourth quarter top line growth was solid amidst a healthy customer demand environment. As we have seen throughout the second half of 2019, products mix shift continued to drive lower volume metrics and a higher inflation or price component of our organic revenue. While inflation continued to trend higher throughout the year, the fourth quarter price environment was particularly challenging with double-digit spikes in the higher end center-of-the-plate categories.

I would like to thank the entire Chefs' team for delivering a strong finish to 2019. And we look forward to continuing our path to future growth in 2020. A few highlights from the fourth quarter include, 4.1% organic growth in net sales. Specialty sales were up 5.3% organically over the prior year, which was driven by unique customer growth of approximately 3.8%. Placement growth of 2.5% and specialty case growth of 2.3%. Organic pounds in center-of-the-plate were approximately 2.1% lower than the prior year quarter, primarily due to a tough comparison to Q4 2018. Specialty product mix changes continue to drive the