Insights from Performance Food Group’s Earnings Announcement February 2021

Posted on February 19, 2021

Emerging Themes from Performance Food Group’s Earnings Announcement

PFG shared their thoughts on their quarterly earnings update on February 3, 2021.

There were several key themes that emerged from the call:

1. Continued Integration of Reinhart.  PFG’s CEO George Holm, said that “The integration of Reinhart continues to meet our original expectations…”. He confirmed the transaction services agreement has been completed and the company continues to believe they will achieve roughly $50 million in annualized cost synergies in the third full fiscal year after close.
2. Vistar impacted by the pandemic.  PFG’s Vistar division continues to be impacted by the pandemic and the company expects a much slower recovery in theater and coffee services.  A bright spot has been the convenience store segment, which was aided by the Eby-Brown acquisition.    Despite its current revenue fall, George indicated that the division had done a good job controlling costs.
3. Ability to fund a ramp up in inventory and receivables will be key.  It is uncertain how large the demands will be on distributors from a working capital perspective, but George indicated that it had the wherewithal to invest in re-building inventories and investing in receivables necessary to facilitate a rebounding restaurant community.
4. M&A Pipeline Exists but may take a bit of time before it is actionable.  The PFG acquisition pipeline is “robust” and the company is well positioned to take advantage of opportunities but nothing quite actionable yet.  There was confidence that as normalcy returns, there are going to be actionable acquisition opportunities.

Our Keiter Advisors team will continue to monitor the broadline food distributors trends and share our insights on other large distributors as they are released.