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A Look at Performance Food's 2nd Quarter of Fiscal 2021

While earnings surpassed expectations, revenue was below projections

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Mayank Marwah
Feb 04, 2021
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On Feb. 3 before the market opened, Performance Food Group Co. (

PFGC, Financial) released its fiscal second-quarter 2021 financial results. While earnings exceeded analysts' expectations, revenue came in below projections.

By the numbers

The Richmond, Virginia-based company posted net income for the quarter of $17.6 million, translating to earnings per share of 13 cents. The adjusted EPS stood at 35 cents vs. the 24 cents that analysts predicted. Revenue came in at $6.85 billion for the period, up from $6.07 billion recorded in the same period a year earlier. However, revenue missed projections by 1.62%.

The first-half fiscal 2021 net income amounted to $16.9 million, or $0.13 per share. Revenue totalled $13.89 billion, up 12.8% from same period of hte previous year.

President and CEO George Holm commented the following on the earnings report:

"I am proud of how our Company has continued to navigate through the current market conditions and distinguish ourselves as leaders in the food distribution industry. Despite the new challenges the holiday season brought for our business, our Foodservice segment still delivered a solid quarter while continuing the smooth integration of Reinhart. Looking ahead, I believe PFG is well-positioned to take advantage of a better operating environment in the not-too-distant future."

Segment results

In the Foodservice segment, sales rose 27% to $4.9 billion in the second quarter, largely driven by the acquisition of Reinhart, which is one of the largest food service distributors in the U.S. The acquisition contributed around $1.35 billion towards net sales. Additionally, a rise in selling price per case positively impacted the metric. Likewise, Ebitda grew 36.7% to $155.3 million. Gross profit was 29.7% higher than the previous year thanks to the Reinhart buy.

Second quarter net sales for the Vistar division totalled $2 billion, which plummeted approximately 12% as compared to the prior-year quarter. The acquisition of Eby-Brown, which is a leading distributor of pre-packaged candy, snacks, specialty beverages and tobacco products in the convenience industry, contributed to net sales. According to the company, this was more than negated by the negative impact of Covid-19 on sales. Ebitda declined 31.6% to $38.7 million, while gross profit was down 21.2% compared to the prior-year period.

Financials and capital expenditure

In the first-half of fiscal 2021, the company used $24.4 million in cash flow from operating activity owing to investments in working capital as well as a contingent payment of $117.3 million associated with the purchase of Eby-Brown. This was partly negated by income tax refunds of $118.7 million received during the six-month period.

At the quarter's end, company's balance of total cash and restricted cash came in at $427.8 million.

During the first half of fiscal 2021, the company's capital spending was $83 million, up $34 million compared to the prior year.

Disclosure: I do not hold any positions in the stocks mentioned.

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