Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Oct. 02, 2021 | Nov. 03, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Oct. 2, 2021 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Performance Food Group Company | |
Entity Central Index Key | 0001618673 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --07-02 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 154,314,660 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Trading Symbol | PFGC | |
Entity File Number | 001-37578 | |
Entity Tax Identification Number | 43-1983182 | |
Entity Address, Address Line One | 12500 West Creek Parkway | |
Entity Address, City or Town | Richmond | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 23238 | |
City Area Code | 804 | |
Local Phone Number | 484-7700 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Security Exchange Name | NYSE | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Oct. 02, 2021 | Jul. 03, 2021 |
Current assets: | ||
Cash | $ 35.1 | $ 11.1 |
Accounts receivable, less allowances of $48.8 and $42.6 | 2,164.9 | 1,580 |
Inventories, net | 2,864 | 1,839.4 |
Income taxes receivable | 73.1 | 49.6 |
Prepaid expenses and other current assets | 211.7 | 100.3 |
Total current assets | 5,348.8 | 3,580.4 |
Goodwill | 2,220.5 | 1,354.7 |
Other intangible assets, net | 1,280.1 | 796.4 |
Property, plant and equipment, net | 1,978.5 | 1,589.6 |
Operating lease right-of-use assets | 650.8 | 438.7 |
Restricted cash | 7.1 | 11.1 |
Other assets | 95.9 | 74.8 |
Total assets | 11,581.7 | 7,845.7 |
Current liabilities: | ||
Trade accounts payable and outstanding checks in excess of deposits | 2,374.1 | 1,776.5 |
Accrued expenses and other current liabilities | 709.9 | 625 |
Finance lease obligations—current installments | 71.5 | 48.7 |
Operating lease obligations—current installments | 105.8 | 77 |
Total current liabilities | 3,261.3 | 2,527.2 |
Long-term debt | 3,669.7 | 2,240.5 |
Deferred income tax liability, net | 376.1 | 140.4 |
Finance lease obligations, excluding current installments | 355 | 255 |
Operating lease obligations, excluding current installments | 560.5 | 378 |
Other long-term liabilities | 235.6 | 198.5 |
Total liabilities | 8,458.2 | 5,739.6 |
Commitments and contingencies (Note 10) | ||
Shareholders’ equity: | ||
Common Stock: $0.01 par value per share, 1.0 billion shares authorized, 152.8 million shares issued and outstanding as of October 2, 2021; 132.5 million shares issued and outstanding as of July 3, 2021 | 1.5 | 1.3 |
Additional paid-in capital | 2,764.6 | 1,752.8 |
Accumulated other comprehensive loss, net of tax benefit of $1.6 and $1.9 | (4.6) | (5.3) |
Retained earnings | 362 | 357.3 |
Total shareholders’ equity | 3,123.5 | 2,106.1 |
Total liabilities and shareholders’ equity | $ 11,581.7 | $ 7,845.7 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Oct. 02, 2021 | Jul. 03, 2021 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 48.8 | $ 42.6 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 152,800,000 | 132,500,000 |
Common stock, shares outstanding | 152,800,000 | 132,500,000 |
Accumulated other comprehensive loss, tax benefit | $ 1.6 | $ 1.9 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 10,386.3 | $ 7,046.8 |
Cost of goods sold | 9,244 | 6,231.3 |
Gross profit | 1,142.3 | 815.5 |
Operating expenses | 1,094.1 | 779.7 |
Operating profit | 48.2 | 35.8 |
Other expense, net: | ||
Interest expense | 44 | 38.8 |
Other, net | (1.3) | (1) |
Other expense, net | 42.7 | 37.8 |
Income (loss) before taxes | 5.5 | (2) |
Income tax expense (benefit) | 0.8 | (1.3) |
Net income (loss) | $ 4.7 | $ (0.7) |
Weighted-average common shares outstanding: | ||
Basic | 139.7 | 131.7 |
Diluted | 141.2 | 131.7 |
Earnings (loss) per common share: | ||
Basic | $ 0.03 | $ (0.01) |
Diluted | $ 0.03 | $ (0.01) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income (loss) | $ 4.7 | $ (0.7) |
Interest rate swaps: | ||
Change in fair value, net of tax | (0.2) | (0.3) |
Reclassification adjustment, net of tax | 1.3 | 0.7 |
Foreign currency translation adjustment, net of tax | (0.4) | |
Other comprehensive income | 0.7 | 0.4 |
Total comprehensive income (loss) | $ 5.4 | $ (0.3) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Interest Rate Swaps [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Other Comprehensive Income (Loss) [Member]Interest Rate Swaps [Member] | Retained Earnings [Member] | |
Balance Beginning at Jun. 27, 2020 | $ 2,010.6 | $ 1.3 | $ 1,703 | $ (10.3) | $ 316.6 | |||
Balance Beginning, shares at Jun. 27, 2020 | 131.3 | |||||||
Net income (loss) | (0.7) | (0.7) | ||||||
Interest rate swaps | 0.4 | $ 0.4 | $ 0.4 | |||||
Issuance of common stock under stock-based compensation plans | (1.7) | (1.7) | ||||||
Issuance of common stock under stock-based compensation plans, shares | 0.4 | |||||||
Issuance of common stock under employee stock purchase plan | 7.8 | 7.8 | ||||||
Issuance of common stock under employee stock purchase plan, shares | 0.3 | |||||||
Stock-based compensation expense | 4.3 | 4.3 | ||||||
Balance Ending at Sep. 26, 2020 | 2,020.7 | $ 1.3 | 1,713.4 | (9.9) | 315.9 | |||
Balance Ending, shares at Sep. 26, 2020 | 132 | |||||||
Balance Beginning at Jul. 03, 2021 | $ 2,106.1 | $ 1.3 | 1,752.8 | (5.3) | 357.3 | |||
Balance Beginning, shares at Jul. 03, 2021 | 132.5 | 132.5 | ||||||
Net income (loss) | $ 4.7 | 4.7 | ||||||
Interest rate swaps | 0.7 | $ 1.1 | $ 1.1 | |||||
Foreign currency translation adjustment, net of tax | (0.4) | (0.4) | ||||||
Issuance of common stock under stock-based compensation plans | (4.9) | (4.9) | ||||||
Issuance of common stock under stock-based compensation plans, shares | 0.4 | |||||||
Conversion of Core-Mark shares of common stock | 998.8 | $ 0.2 | 998.6 | |||||
Conversion of Core-Mark shares of common stock, shares | 19.9 | |||||||
Conversion of Core-Mark stock-based compensation | [1] | 9.2 | 9.2 | |||||
Stock-based compensation expense | 8.9 | 8.9 | ||||||
Balance Ending at Oct. 02, 2021 | $ 3,123.5 | $ 1.5 | $ 2,764.6 | $ (4.6) | $ 362 | |||
Balance Ending, shares at Oct. 02, 2021 | 152.8 | 152.8 | ||||||
[1] | Represents the portion of replacement stock-based compensation awards that relates to pre-combination vesting. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 4.7 | $ (0.7) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation | 57 | 52.8 |
Amortization of intangible assets | 41.7 | 29.3 |
Amortization of deferred financing costs | 2.2 | 3.6 |
Provision for losses on accounts receivables | 0.2 | (2) |
Change in LIFO reserve | 11.3 | (8.7) |
Stock compensation expense | 10 | 4.7 |
Deferred income tax (benefit) expense | (0.3) | 5.5 |
Loss on extinguishment of debt | 3.2 | |
Other non-cash activities | (0.5) | (3.1) |
Changes in operating assets and liabilities, net | ||
Accounts receivable | (77.3) | (23.6) |
Inventories | 26.1 | 34.2 |
Income taxes receivable | 0.5 | (7.5) |
Prepaid expenses and other assets | 10.2 | (15.1) |
Trade accounts payable and outstanding checks in excess of deposits | 21.2 | (155.3) |
Accrued expenses and other liabilities | (78.4) | (46.1) |
Net cash provided by (used in) operating activities | 31.8 | (132) |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (24.4) | (40.8) |
Net cash paid for acquisitions | (1,382.6) | |
Proceeds from sale of property, plant and equipment | 0.4 | 6.1 |
Net cash used in investing activities | (1,406.6) | (34.7) |
Cash flows from financing activities: | ||
Net borrowings under ABL Facility | 786.9 | 301 |
Cash paid for debt issuance, extinguishment and modifications | (21.5) | |
Payments under finance lease obligations | (15) | (8) |
Payments on financed property, plant and equipment | (0.1) | (0.3) |
Cash paid for acquisitions | (0.6) | (135.6) |
Proceeds from employee stock purchase plan | 7.8 | |
Proceeds from exercise of stock options | 1.5 | 2.5 |
Cash paid for shares withheld to cover taxes | (6.4) | (4.2) |
Net cash provided by financing activities | 1,394.8 | 163.2 |
Net increase (decrease) in cash and restricted cash | 20 | (3.5) |
Cash and restricted cash, beginning of period | 22.2 | 431.8 |
Cash and restricted cash, end of period | 42.2 | 428.3 |
Debt assumed through finance lease obligations | 35.7 | 28.9 |
Purchases of property, plant and equipment, financed | 0.2 | |
Non-cash issuance of PFG stock in exchange for Core-Mark stock | 1,008 | |
Interest | 11.8 | 10.8 |
Income tax payments, net | 0.6 | $ 0.7 |
4.250% Notes due 2029 [Member] | ||
Cash flows from financing activities: | ||
Borrowing of Notes due 2029 | 1,000 | |
5.500% Notes due 2024 [Member] | ||
Cash flows from financing activities: | ||
Repayment of Notes due 2024 | $ (350) |
Reconciliation of Cash and Rest
Reconciliation of Cash and Restricted Cash - USD ($) $ in Millions | Oct. 02, 2021 | Jul. 03, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |||
Cash | $ 35.1 | $ 11.1 | |
Restricted cash | [1] | 7.1 | 11.1 |
Total cash and restricted cash | $ 42.2 | $ 22.2 | |
[1] | Restricted cash represents the amounts required by insurers to collateralize a part of the deductibles for the Company’s workers’ compensation and liability claims. |
Summary of Business Activities
Summary of Business Activities | 3 Months Ended |
Oct. 02, 2021 | |
Accounting Policies [Abstract] | |
Summary of Business Activities | 1. Summary of Business Activities Business Overview Performance Food Group Company, through its subsidiaries, markets and distributes primarily national and company-branded food and food-related products to customer locations across the United States and Canada. The Company serves both of the major customer types in the restaurant industry: (i) independent customers, and (ii) multi-unit, or “Chain” customers, which include some of the most recognizable family and casual dining restaurant chains, as well as schools, business and industry locations, healthcare facilities, and retail establishments. The Company also specializes in distributing candy, snacks, beverages, cigarettes, other tobacco products, health and beauty care products and other items within the United States and Canada to vending distributors, big box retailers, theaters, convenience stores, drug stores, grocery stores, liquor stores, travel providers, and hospitality providers. On September 1, 2021 Performance Food Group Company completed the acquisition of Core-Mark. As a result, the Company expanded its convenience business within the Vistar segment, which now includes operations in Canada. Refer to Note 5. Business Combinations for additional details regarding the acquisition of Core-Mark. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Estimates | 3 Months Ended |
Oct. 02, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Estimates | 2. Summary of Significant Accounting Policies and Estimates Basis of Presentation The consolidated financial statements have been prepared by the Company, without audit, with the exception of the July 3, 2021 consolidated balance sheet, which was derived from the audited consolidated financial statements included in the Form 10-K. The financial statements include consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of shareholders’ equity, and consolidated statements of cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income, shareholders’ equity, and cash flows for all periods presented have been made. The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates used by management are related to the accounting for the allowance for doubtful accounts, reserve for inventories, impairment testing of goodwill and other intangible assets, acquisition accounting, reserves for claims and recoveries under insurance programs, vendor rebates and other promotional incentives, bonus accruals, depreciation, amortization, determination of useful lives of tangible and intangible assets, leases and income taxes. Actual results could differ from these estimates. The results of operations are not necessarily indicative of the results to be expected for the full fiscal year. Therefore, these financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K. Certain footnote disclosures included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to applicable rules and regulations for interim financial statements. Foreign Currency Translation As a result of the Core-Mark acquisition on September 1, 2021, PFG now has operations in Canada. The operating assets and liabilities of the Company’s Canadian operations, whose functional currency is the Canadian dollar, are translated to U.S. dollars at exchange rates in effect at period-end. Translation gains and losses are recorded in Accumulated Other Comprehensive Income (“AOCI”) as a component of stockholders’ equity. Revenue and expenses from Canadian operations are translated using the monthly average exchange rates in effect during the period in which the transactions occur. The Company also recognizes gains or losses on foreign currency exchange transactions between its Canadian and U.S. operations, net of applicable income taxes, in the consolidated statements of operations. The Company currently does not hedge Canadian foreign currency cash flows. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Oct. 02, 2021 | |
Accounting Changes And Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements | 3. Recently Issued Accounting Pronouncements Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-1 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Oct. 02, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | 4. Revenue Recognition The Company markets and distributes primarily national and company-branded food and food-related products to customer locations in the United States and Canada. The Foodservice segment supplies a “broad line” of products to its customers, including the Company’s performance brands and custom-cut meats and seafood, as well as products that are specific to each customer’s menu requirements. Vistar distributes candy, snacks, beverages, cigarettes, other tobacco products and other products to various customer channels. The Company disaggregates revenue by product offerings and determined that disaggregating revenue at the segment level achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 14. Segment Information for external revenue by reportable segment. The Company has customer contracts in which incentives are paid upfront to certain customers. These payments have become industry practice and are not related to financing the customer’s business, nor are they associated with any distinct good or service to be received from the customer. These incentive payments are capitalized and amortized over the life of the contract or the expected life of the customer relationship on a straight-line basis. The Company’s contract asset for these incentives totaled $20.8 million and $19.9 million as of October 2, 2021 and July 3, 2021, respectively. |
Business Combinations
Business Combinations | 3 Months Ended |
Oct. 02, 2021 | |
Business Combinations [Abstract] | |
Business Combination | 5 . Business Combinations During the first quarter of fiscal 2022, the Company made one acquisition in a cash and stock transaction valued at $2.4 billion. There were no acquisitions in the first quarter of fiscal 2021. On September 1, 2021 , the Company acquired Core-Mark in a transaction valued at $2.4 billion, net of cash received. (In millions, except shares, cash per share, exchange ratio, and closing price) Core-Mark shares outstanding at August 31, 2021 45,201,975 Cash consideration (per Core-Mark share) $ 23.875 Cash portion of purchase price $ 1,079.2 Core-Mark shares outstanding at August 31, 2021 45,201,975 Exchange ratio (per Core-Mark share) 0.44 Total PFGC common shares issued 19,888,869 Closing price of PFGC common stock on August 31, 2021 $ 50.22 Equity issued $ 998.8 Equity compensation (1) $ 9.2 Total equity portion of purchase price $ 1,008.0 Debt assumed, net of cash $ 303.4 Total purchase price $ 2,390.6 (1) Represents the portion of replacement share-based payment awards that relates to pre-combination vesting. The $1.1 billion cash portion of the acquisition was financed using borrowings from the ABL Facility (as defined in Note 6. Debt). The Core-Mark acquisition strengthens the Company’s business diversification and expands its presence in the convenience store channel. The Core-Mark acquisition is reported in the Vistar segment. Assets acquired and liabilities assumed are recognized at their respective fair values as of the acquisition date. The following table summarizes the preliminary purchase price allocation for each major class of assets acquired and liabilities assumed for the fiscal 2022 acquisition: (In millions) Fiscal 2022 Net working capital $ 982.5 Goodwill 865.9 Intangible assets with definite lives: Customer relationships 370.0 Trade names 140.0 Technology 7.0 Property, plant and equipment 387.4 Operating lease right-of-use assets 218.8 Other assets 20.9 Deferred tax liabilities (235.7 ) Finance lease obligations (102.1 ) Operating lease obligations (217.6 ) Other liabilities (46.5 ) Total purchase price $ 2,390.6 Intangible assets consist primarily of customer relationships, trade names, and technology with useful lives of 11 years, 5 years, and 5 years, respectively, and a total weighted-average useful life of 9.3 years. The excess of the estimated fair value of assets acquired and the liabilities assumed over consideration paid was recorded as $865.9 million of goodwill on the acquisition date. The goodwill reflects the value to the Company associated with the expansion of geographic reach and scale of our distribution footprint and enhancements to the Company’s customer base. The Company is in the process of determining the amount of goodwill that is deductible for income tax purposes. The net sales and net income related to Core-Mark recorded in the Company’s Consolidated Statements of Operations since the acquisition date of September 1, 2021 are $1.6 billion and $1.0 million, respectively. The following table summarizes the unaudited pro-forma consolidated financial information of the Company as if the acquisition had occurred on June 28, 2020. Three Months Ended (in millions) October 2, 2021 September 26, 2020 Net sales $ 13,464.6 $ 11,549.4 Net income (loss) 37.2 (50.6 ) These pro-forma results include nonrecurring pro-forma adjustments related to acquisition costs incurred, including the amortization of the step up in fair value of inventory acquired. The pro-forma net income for the three months ended September 26, 2020 includes $55.8 million, after-tax, of acquisition costs assuming the acquisition had occurred on June 28, 2020. The recurring pro-forma adjustments include estimates of interest expense for the Notes due 2029 and estimates of depreciation and amortization associated with fair value adjustments for property, plant and equipment and intangible assets acquired. These unaudited pro-forma results do not necessarily represent financial results that would have been achieved had the acquisition actually occurred on June 28, 2020 or future consolidated results of operations of the Company. The acquisition of Eby-Brown Company LLC (“Eby-Brown”) in fiscal 2019 included contingent consideration, including earnout payments in the event certain operating results are achieved during a defined post-closing period. In the first quarter of fiscal 2021, the Company paid the first earnout payment of $185.6 million, which included $68.3 million as a financing activity cash outflow and $117.3 million as an operating activity cash outflow in the consolidated statement of cash flows for the three months ended September 26, 2020. As of October 2, 2021 the Company has accrued $7.0 million related to additional earnout payments. Earnout liabilities are measured using unobservable inputs that are considered a Level 3 measurement. |
Debt
Debt | 3 Months Ended |
Oct. 02, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 6 . Debt The Company is a holding company and conducts its operations through its subsidiaries, which have incurred or guaranteed indebtedness as described below. Debt consisted of the following: (In millions) As of October 2, 2021 As of July 3, 2021 ABL Facility $ 1,373.2 $ 586.3 5.500% Notes due 2024 - 350.0 6.875% Notes due 2025 275.0 275.0 5.500% Notes due 2027 1,060.0 1,060.0 4.250% Notes due 2029 1,000.0 - Less: Original issue discount and deferred financing costs (38.5 ) (30.8 ) Long-term debt 3,669.7 2,240.5 Less: current installments - - Total debt, excluding current installments $ 3,669.7 $ 2,240.5 Credit Agreement PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, was a party to the Fourth Amended and Restated Credit Agreement dated December 30, 2019 (as amended by the First Amendment to Fourth Amended and Restated Credit Agreement dated as of April 29, 2020, and the Second Amendment to Fourth Amended and Restated Credit Agreement dated as of May 15, 2020, the “Prior Credit Agreement”). The Prior Credit Agreement had an aggregate principal amount of $3.0 billion under the revolving loan facility and was scheduled to mature on December 30, 2024. On September 17, 2021, PFGC and Performance Food Group, Inc. entered into the Fifth Amended and Restated Credit Agreement (the “ABL Facility”) with Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent, and the other lenders party thereto, which amends the Prior Credit Agreement. The ABL Facility, among other things, (i) increases the aggregate principal amount available under the revolving loan facility from $3.0 billion under the Prior Credit Agreement to $4.0 billion under the ABL Facility, (ii) extends the stated maturity date from December 30, 2024 under the Prior Credit Agreement to September 17, 2026 under the ABL Facility, and (iii) includes an alternative reference rate, which provides mechanisms for the use of the Secured Overnight Financing Rate as a replacement rate upon a LIBOR cessation event. Performance Food Group, Inc., a wholly-owned subsidiary of PFGC, is the lead borrower under the ABL Facility, which is jointly and severally guaranteed by, and secured by the majority of the assets of, PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than the captive insurance subsidiary and other excluded subsidiaries). Availability for loans and letters of credit under the ABL Facility is governed by a borrowing base, determined by the application of specified advance rates against eligible assets, including trade accounts receivable, inventory, owned real properties, and owned transportation equipment. The borrowing base is reduced quarterly by a cumulative fraction of the real properties and transportation equipment values. Advances on accounts receivable and inventory are subject to change based on periodic commercial finance examinations and appraisals, and the real property and transportation equipment values included in the borrowing base are subject to change based on periodic appraisals. Audits and appraisals are conducted at the direction of the administrative agent for the benefit and on behalf of all lenders. Borrowings under the ABL Facility bear interest, at Performance Food Group, Inc.’s option, at (a) the Base Rate (defined as the greater of (i) the Federal Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus 1.0%) plus a spread or (b) LIBOR plus a spread. The ABL Facility also provides for an unused commitment fee rate of 0.25% The following table summarizes outstanding borrowings, availability, and the average interest rate under the Prior Credit Agreement and the ABL Facility: (Dollars in millions) As of October 2, 2021 As of July 3, 2021 Aggregate borrowings $ 1,373.2 $ 586.3 Letters of credit under ABL Facility 200.8 161.7 Excess availability, net of lenders’ reserves of $107.5 and $55.1 2,426.0 2,252.0 Average interest rate 1.59 % 2.32 % S enior Notes due 2029 On July 26, 2021, Performance Food Group, Inc. issued and sold $1.0 billion aggregate principal amount of its Initially the Company expected to use the proceeds from the Notes due 2029 to finance the cash consideration payable in connection with the Core-Mark acquisition, to redeem the 5.500% Notes due 2024, and to pay the fees, expenses, and other transaction costs incurred in connection with the Notes due 2029. However, since there was no requirement to hold the funds in escrow until the Core-Mark Acquisition closed, a portion of the net proceeds from the Notes due 2029 were used to pay down the outstanding balance of the Prior Credit Agreement on July 26, 2021. The Notes due 2024 were redeemed in full on July 27, 2021. The Company then funded the cash consideration for the Core-Mark Acquisition with borrowings under the Prior Credit Agreement. The Notes due 2029 were issued at 100.0% of their par value. The Notes due 2029 mature on August 1, 2029, and bear interest at a rate of 4.250% per year, payable semi-annually in arrears. Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2029 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2029 at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. may redeem all or a part of the Notes due 2029 at any time prior to August 1, 2024, at a redemption price equal to 100% of the principal amount of the Notes due 2029 being redeemed plus a make-whole premium and accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, at any time prior to August 1, 2024, Performance Food Group, Inc. may redeem up to 40% of the Notes due 2029 from the proceeds of certain equity offerings at a redemption price equal to 104.250% of the principal amount thereof, plus accrued and unpaid interest. The indenture governing the Notes due 2029 contains covenants limiting, among other things, PFGC’s and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes due 2029 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2029 to become or be declared due and payable. Senior Notes due 2024 On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of its 5.500% Senior Notes due 2024 (the “Notes due 2024”), pursuant to an indenture dated as of May 17, 2016. As described above, Performance Food Group, Inc. issued and sold $1.0 billion aggregate principal of its Notes due 2029 and used a portion of the proceeds to redeem the Notes due 2024 in full. A significant portion of this redemption was considered an extinguishment, resulting in a $3.2 million loss on extinguishment of debt within interest expense from the write-off of the pro-rata portion of the unamortized original issue discount and deferred financing costs related to the debt extinguishment. A portion of this redemption was considered a modification in accordance with FASB ASC 470-50, Debt-Modifications and Extinguishments |
Leases
Leases | 3 Months Ended |
Oct. 02, 2021 | |
Leases [Abstract] | |
Leases | 7 . Leases The Company determines if an arrangement is a lease at inception and recognizes a financing or operating lease liability and right-of-use asset in the Company’s consolidated balance sheet. Right-of-use assets and lease liabilities for both operating and finance leases are recognized based on present value of lease payments over the lease term at commencement date. Since the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. This rate was determined by using the yield curve based on the Company’s credit rating adjusted for the Company’s specific debt profile and secured debt risk. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The lease expenses for these short-term leases are recognized on a straight-line basis over the lease term. The Company has several lease agreements that contain lease and non-lease components, such as maintenance, taxes, and insurance, which are accounted for separately. The difference between the operating lease right-of-use assets and operating lease liabilities primarily relates to adjustments for deferred rent, favorable leases, and prepaid rent . Subsidiaries of the Company have entered into numerous operating and finance leases for various warehouses, office facilities, equipment, tractors, and trailers. 1 year 19 years 10 years Certain of the leases for tractors, trailers, and other vehicles and equipment provide for residual value guarantees to the lessors. Circumstances that would require the subsidiary to perform under the guarantees include either (1) default on the leases with the leased assets being sold for less than the specified residual values in the lease agreements, or (2) decisions not to purchase the assets at the end of the lease terms combined with the sale of the assets, with sales proceeds less than the residual value of the leased assets specified in the lease agreements. Residual value guarantees under these operating lease agreements typically range between 6% and 16% of the value of the leased assets at inception of the lease. These leases have original terms ranging from 5 to 7 years and expiration dates ranging from 2021 to 2027. As of October 2, 2021, the undiscounted maximum amount of potential future payments for lease residual value guarantees totaled approximately $18.7 million, which would be mitigated by the fair value of the leased assets at lease expiration. The following table presents the location of the right-of-use assets and lease liabilities in the Company’s consolidated balance sheet as of October 2, 2021 and July 3, 2021 (in millions), as well as the weighted-average lease term and discount rate for the Company’s leases: Leases Consolidated Balance Sheet Location As of October 2, 2021 As of July 3, 2021 Assets: Operating Operating lease right-of-use assets $ 650.8 $ 438.7 Finance Property, plant and equipment, net 437.1 294.6 Total lease assets $ 1,087.9 $ 733.3 Liabilities: Current Operating Operating lease obligations—current installments $ 105.8 $ 77.0 Finance Finance lease obligations—current installments 71.5 48.7 Non-current Operating Operating lease obligations, excluding current installments 560.5 378.0 Finance Finance lease obligations, excluding current installments 355.0 255.0 Total lease liabilities $ 1,092.8 $ 758.7 Weighted average remaining lease term Operating leases 8.5 years 8.6 years Finance leases 6.2 years 6.2 years Weighted average discount rate Operating leases 3.9 % 4.6 % Finance leases 3.9 % 4.5 % The following table presents the location of lease costs in the Company’s consolidated statement of operations for the periods reported (in millions): Three Months Ended Lease Cost Statement of Operations Location October 2, 2021 September 26, 2020 Finance lease cost: Amortization of finance lease assets Operating expenses $ 12.9 $ 7.2 Interest on lease liabilities Interest expense 3.9 3.0 Total finance lease cost $ 16.8 $ 10.2 Operating lease cost Operating expenses 29.6 27.8 Short-term lease cost Operating expenses 10.9 5.1 Total lease cost $ 57.3 $ 43.1 Supplemental cash flow information related to leases for the periods reported are as follows (in millions): (In millions) Three Months Ended October 2, 2021 Three Months Ended September 26, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 28.7 $ 24.6 Operating cash flows from finance leases 3.9 3.0 Financing cash flows from finance leases 15.0 8.0 Right-of-use assets obtained in exchange for lease obligations: Operating leases 19.7 26.8 Finance leases 35.7 28.9 Future minimum lease payments under non-cancelable leases as of October 2, 2021 are as follows (in millions): Fiscal Year Operating Leases Finance Leases Remainder of 2022 $ 102.7 $ 63.3 2023 122.2 80.9 2024 99.2 79.4 2025 81.1 74.3 2026 67.0 70.5 Thereafter 328.5 113.2 Total future minimum lease payments $ 800.7 $ 481.6 Less: Interest 134.4 55.1 Present value of future minimum lease payments $ 666.3 $ 426.5 As of October 2, 2021, the Company has additional operating and finance leases that have not yet commenced which total $33.3 million in future minimum lease payments. These leases relate primarily to vehicle and warehouse leases and are expected to commence in fiscal 2022 with lease terms of 2 to 10 years. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Oct. 02, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 8 . Fair Value of Financial Instruments The carrying values of cash, accounts receivable, trade accounts payable and outstanding checks in excess of deposits, and accrued expenses approximate their fair values because of the relatively short maturities of those instruments. The derivative assets and liabilities are recorded at fair value on the balance sheet. The fair value of long-term debt, which has a carrying value of $3,669.7 million and $2,240.5 million, is $3,773.2 million and $2,346.2 million at October 2, 2021 and July 3, 2021, respectively, and is determined by reviewing current market pricing related to comparable debt issued at the time of the balance sheet date and is considered a Level 2 measurement. |
Income Taxes
Income Taxes | 3 Months Ended |
Oct. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9 . Income Taxes The determination of the Company’s overall effective tax rate requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. The effective tax rate reflects the income earned and taxed in various United States federal, state, and foreign jurisdictions. Tax law changes, increases and decreases in temporary and permanent differences between book and tax items, tax credits, and the Company’s change in income in each jurisdiction all affect the overall effective tax rate. It is the Company’s practice to recognize interest and penalties related to uncertain tax positions in income tax expense. The Company’s effective tax rate was 14.7% for the three months ended October 2, 2021 and 64.7% for the three months ended September 26, 2020. The effective tax rate varied from the 21% statutory rate primarily due to state taxes, federal credits and other permanent items. The excess tax benefit of exercised and vested stock awards is treated as a discrete item. The effective tax rates for three months ended October 2, 2021 differed from the prior year period due to the decrease of state taxes, non-deductible expenses, and discrete items as a percentage of book income, which was significantly higher than the book income for the same period of fiscal 2021. As of October 2, 2021 and July 3, 2021, the Company had net deferred tax assets of $265.7 million and $159.2 million, respectively, and deferred tax liabilities of $641.7 million and $299.6 million, respectively. As of October 2, 2021 and July 3, 2021, the Company had established a valuation allowance of $1.3 million and $0.7 million, respectively, net of federal benefit, against deferred tax assets related to certain net operating losses which are not likely to be realized due to limitations on utilization. The change in the deferred tax balances and the valuation allowance relates primarily to the acquisition of Core-Mark’s deferred tax assets and deferred taxes established in purchase accounting . The Company believes that it is more likely than not that the remaining deferred tax assets will be realized. The Company records a liability for uncertain tax positions in accordance with FASB ASC 740-10-25, Income Taxes – General – Recognition |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Oct. 02, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10 . Commitments and Contingencies Purchase Obligations The Company had outstanding contracts and purchase orders of $121.1 million related to capital projects and services including purchases of compressed natural gas for its trucking fleet at October 2, 2021. Amounts due under these contracts were not included on the Company’s consolidated balance sheet as of October 2, 2021. Guarantees The Company from time to time enters into certain types of contracts that contingently require it to indemnify various parties against claims from third parties. These contracts primarily relate to: (i) certain real estate leases under which subsidiaries of the Company may be required to indemnify property owners for environmental and other liabilities and other claims arising from their use of the applicable premises; (ii) certain agreements with the Company’s officers, directors, and employees under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship; and (iii) customer agreements under which the Company may be required to indemnify customers for certain claims brought against them with respect to the supplied products. Generally, a maximum obligation under these contracts is not explicitly stated. Because the obligated amounts associated with these types of agreements are not explicitly stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, the Company has not been required to make payments under these obligations and, therefore, no liabilities have been recorded for these obligations in the Company’s consolidated balance sheets. Litigation The Company is engaged in various legal proceedings that have arisen but have not been fully adjudicated. The likelihood of loss arising from these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible to probable. When losses are probable and reasonably estimable, they have been accrued. Based on estimates of the range of potential losses associated with these matters, management does not believe that the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect upon the consolidated financial position or results of operations of the Company. However, the final results of legal proceedings cannot be predicted with certainty and, if the Company failed to prevail in one or more of these legal matters, and the associated realized losses were to exceed the Company’s current estimates of the range of potential losses, the Company’s consolidated financial position or results of operations could be materially adversely affected in future periods. JUUL Labs, Inc. Marketing Sales Practices, and Products Liability Litigation. In October 2019, a Multidistrict Litigation action (“MDL”) was initiated in order to centralize litigation against JUUL Labs, Inc. (“JUUL”) and other parties in connection with JUUL’s e-cigarettes and related devices and components in the United States District Court for the Northern District of California. On March 11, 2020, counsel for plaintiffs and the Plaintiffs’ Steering Committee filed a Master Complaint in the MDL naming, among several other entities and individuals including JUUL, Altria Group, Inc., Philip Morris USA, Inc., Altria Client Services LLC, Altria Group Distribution Company, Altria Enterprises LLC, certain members of management and/or individual investors in JUUL, various e-liquid manufacturers, and various retailers, including the Company’s subsidiaries Eby-Brown and Core-Mark, as defendants. The Master Complaint also named additional distributors of JUUL products (collectively with Eby-Brown the “Distributor Defendants”). The Master Complaint contains various state law claims and alleges that the Distributor Defendants: (1) failed to disclose JUUL’s nicotine contents or the risks associated; (2) pushed a product designed for a youth market; (3) engaged with JUUL in planning and marketing its product in a manner designed to maximize the flow of JUUL products; (4) met with JUUL management in San Francisco, California to further these business dealings; and (5) received incentives and business development funds for marketing and efficient sales. Individual plaintiffs may also file separate and abbreviated Short Form Complaints (“SFC”) that incorporate the allegations in the Master Complaint. JUUL, and Eby-Brown are parties to a Domestic Wholesale Distribution Agreement dated March 10, 2020, and JUUL has agreed to defend and indemnify Eby-Brown under the terms of that agreement and is paying Eby-Brown’s outside counsel fees directly. In addition, Core-Mark and JUUL have entered into a March 8, 2021 Defense and Indemnity Agreement pursuant to which JUUL has agreed to defend and indemnify Core-Mark, and JUUL is paying Core-Mark’s outside counsel fees directly. On May 29, 2020, JUUL filed a motion to dismiss on the basis that the alleged state law claims are preempted by federal law and a motion to stay/dismiss the litigation based on the Food and Drug Administration’s (“FDA”) primary jurisdiction to regulate e-cigarette and related vaping products and pending FDA review of JUUL’s Pre-Market Tobacco Application (“PMTA”). On June 29, 2020, Eby-Brown and Core-Mark, along with the other Distributor Defendants, filed similar motions incorporating JUUL’s arguments. The court denied these motions on October 23, 2020. The court has also entered an order governing the selection of bellwether plaintiffs and setting key discovery and other deadlines in the litigation. Bellwether trials are test cases generally intended to try a contested issue common to several plaintiffs in mass tort litigation. The results of these proceedings are used to shape the litigation process for the remaining cases and to aid the parties in assessing potential settlement values of the remaining claims. Here, the court authorized a pool of 24 bellwether plaintiffs, with plaintiffs selecting six cases, the combined defendants selecting six cases, and the court selecting 12 cases at random. The court and the parties have completed the bellwether selection process, and the first of four bellwether trials has been set for April 18, 2022, with the remaining three trials set for the third and fourth calendar quarters of 2022. Eby-Brown and Core-Mark have been dismissed from each of the bellwether cases and will not be parties or participants to those trials. The Distributor Defendants and the retailers do, however, remain named defendants in various SFCs that were not selected as bellwether trial plaintiffs. The litigation of those claims is not scheduled to occur until after the bellwether trials conclude. In the meantime, discovery related to the claims in the Master Complaint continues as to the Distributor Defendants. On September 3, 2020, the Cherokee Nation filed a parallel lawsuit in Oklahoma state court against several entities including JUUL, e-liquid manufacturers, various retailers, and various distributors, including Eby-Brown and Core-Mark, alleging similar claims to the claims at issue in the MDL (the “Oklahoma Litigation”). The defendants in the Oklahoma Litigation attempted to transfer the case into the MDL, but a federal court in Oklahoma remanded the case to Oklahoma state court before the Judicial Panel on Multidistrict Litigation effectuated the transfer of the MDL, which means the Oklahoma Litigation is no longer eligible for transfer to the MDL. The Oklahoma Litigation is in the middle of discovery. Trial is tentatively set to start in or after October 2022. The indemnity JUUL has provided to Eby-Brown and Core-Mark also applies to the Oklahoma Litigation. On March 29, 2021, the Cherokee Nation dismissed Eby-Brown from the Oklahoma Litigation. At this time, the Company is unable to predict whether FDA will approve JUUL’s PMTA, nor is the Company able to estimate any potential loss or range of loss in the event of an adverse finding against it in the MDL or any subsequent litigation which may occur related to the individual SFCs. The Company will continue to vigorously defend itself. Merger Litigation. The Company and Core-Mark were subject to litigation arising out of the anticipated acquisition of Core-Mark. On July 6, 2021, Matthew Whitfield, who alleged that he was a shareholder of Core-Mark, filed a civil action in the United States District Court for the Southern District of New York naming as defendants Core-Mark, the individual directors of Core-Mark (together, the “Core-Mark Defendants”), Performance Food Group Company, and two subsidiaries the Company established in connection with its anticipated acquisition of Core-Mark, captioned ., No. 1:21-cv-05803 (the “Whitfield Litigation”). In addition, related litigation was filed against the Core-Mark Defendants only. On June 28, 2021, Shiva Stein, who alleged that she was a shareholder of Core-Mark, filed a civil action in the United States District Court for the Southern District of New York, captioned Stein v. Core-Mark Holding Company, Inc. et al. Ram v. Core-Mark Holding Company, Inc. et al Lawrence v. Core-Mark Holding Company, Inc. et al Walker v. Core-Mark Holding Company, Inc. et al Justice v. Core-Mark Holding Company, Inc. et al Jones v. Core-Mark Holding Company, Inc. et al The plaintiffs in the Merger Actions alleged that the Registration Statement filed with the Securities and Exchange Commission omitted material information related to the acquisition, namely certain (1) financial projections the Company and Core-Mark performed and the basis for those projections and (2) information regarding the analysis Barclay’s performed on behalf of Core-Mark. The plaintiffs sought to enjoin the consummation of the acquisition and requests that the court order the defendants to issue an amended Registration Statement and declare that the defendants violated certain U.S securities laws. In the event the acquisition is consummated, the plaintiffs sought an award of damages. The Company denied that it or Core-Mark violated any laws in connection with the proposed acquisition and believed that the claims were without merit. However, in order to avoid the risk of the Merger Actions delaying or adversely affecting the acquisition and to minimize the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, Core-Mark and the Company determined that Core-Mark would voluntarily supplement the public disclosures filed in connection with the acquisition in exchange for plaintiffs’ agreement to dismiss all claims in the Merger Actions with prejudice. The parties reached such agreement on August 12, 2021. On August 13, 2021, Core-Mark filed the supplemental disclosures on Form 8-K and Schedule 14A. On August 16, 2021, plaintiff in the Stein Litigation voluntarily dismissed her complaint. On August 19, 2021, plaintiffs in the Whitfield Litigation and the Justice Litigation voluntarily dismissed their complaints. On September 13, 2021, plaintiff in the Ram Litigation voluntarily dismissed his complaint. On October 13, 2021, plaintiffs in the Lawrence Litigation, the Walker Litigation and the Jones Litigation voluntarily dismissed their complaints. Tax Liabilities The Company is subject to customary audits by authorities in the jurisdictions where it conducts business in the United States and Canada, which may result in assessments of additional taxes. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Oct. 02, 2021 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 1 1 . Related-Party Transactions The Company participates in and has an equity method investment in a purchasing alliance that was formed to obtain better pricing, to expand product options, to reduce internal costs, and to achieve greater inventory turnover. The Company’s investment in the purchasing alliance was $7.7 million as of October 2, 2021 and $6.0 million as of July 3, 2021. For the three-month periods ended October 2, 2021 and September 26, 2020, the Company recorded purchases of $465.7 million and $243.7 million, respectively, through the purchasing alliance. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Oct. 02, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | 1 2 . Earnings Per Common Share Basic earnings per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is calculated using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. The Company’s potential common shares include outstanding stock-based compensation awards and expected issuable shares under the employee stock purchase plan. In computing diluted earnings per common share, the average closing stock price for the period is used in determining the number of shares assumed to be purchased with the assumed proceeds under the treasury stock method. Potential common share of 0.3 million for the three months ended October 2, 2021 were not included in computing diluted earnings per common share because the effect would have been antidilutive. For the three months ended September 26, 2020 the diluted loss per common share is the same as basic loss per common share because the inclusion of potential common shares would have been antidilutive. A reconciliation of the numerators and denominators for the basic and diluted earnings (loss) per common share computations is as follows: (In millions, except per share amounts) Three Months Ended October 2, 2021 Three Months Ended September 26, 2020 Numerator: Net income (loss) $ 4.7 $ (0.7 ) Denominator: Weighted-average common shares outstanding 139.7 131.7 Dilutive effect of potential common shares 1.5 - Weighted-average dilutive common shares outstanding 141.2 131.7 Basic earnings (loss) per common share $ 0.03 $ (0.01 ) Diluted earnings (loss) per common share $ 0.03 $ (0.01 ) |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Oct. 02, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | 13. Stock-Based Compensation In connection with the Core-Mark acquisition, the Company assumed the outstanding stock-based compensation awards from Core-Mark’s 2010 Long-Term Incentive Plan and 2019 Long-Term Incentive Plan. On September 1, 2021, each outstanding time-based restricted stock unit (“RSU”) held by a non-employee director of Core-Mark was cancelled and converted into the right to receive 0.44 shares of PFGC common stock (“Exchange Ratio”) and $23.875 in cash, without interest (“Per-Share Cash Amount”). Time-based RSUs held by Core-Mark employees were converted to PFG RSUs based on the prescribed ratio in the merger agreement. The ratio was calculated as the sum of the Exchange Ratio plus the quotient of the Per-Share Cash Amount divided by the volume weighted average sale price of PFGC common stock for the ten full consecutive trading days ending on August 31, 2021 (“Stock Award Exchange Ratio”). Each performance-based restricted stock unit (“PSU”) of Core-Mark was converted into a PFG RSU based on the greater of the actual performance as of the acquisition date or the target performance level multiplied by the Stock Award Exchange Ratio. The pro-rata actual level of performance for the applicable performance metrics were greater than target, therefore, the PSUs were converted based on actual performance. The PFG RSUs granted as a result of the conversion are subject to the same terms and conditions, such as vesting schedule and termination related vesting provisions, as the Core-Mark awards were subject to prior to their conversion. On September 1, 2021, the Company granted 614,056 RSUs with a grant date fair value of $49.55 per share. With the assistance of a specialist, the total $30.4 million grant date fair value was bifurcated with $9.2 million recognized as pre-combination vesting within the purchase price as consideration transferred and $21.2 million is post-combination expense to be recognized over the weighted average remaining vesting period of 1.80 years. |
Segment Information
Segment Information | 3 Months Ended |
Oct. 02, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 1 4 . Segment Information The Company has two reportable segments: Foodservice and Vistar. The Foodservice segment markets and distributes food and food-related products to independent restaurants, chain restaurants, and other institutional “food-away-from-home” locations. Foodservice offers a “broad line” of products, including custom-cut meat and seafood, as well as products that are specific to our customer’s menu requirements. The Vistar segment distributes candy, snacks, beverages, cigarettes, other tobacco products, and other products to customers in the vending, office coffee services, theater, retail, hospitality, convenience store and other channels. Intersegment sales represent sales between the segments, which are eliminated in consolidation. Management evaluates the performance of each operating segment based on various operating and financial metrics, including total sales and EBITDA. Corporate & All Other is comprised of corporate overhead and certain operations that are not considered separate reportable segments based on their size. This includes the operations of the Company’s internal logistics unit responsible for managing and allocating inbound logistics revenue and expense. Corporate & All Other may also include capital expenditures for certain information technology projects that are transferred to the segments once placed in service. (In millions) Foodservice Vistar Corporate & All Other Eliminations Consolidated For the three months ended October 2, 2021 Net external sales $ 6,357.7 $ 4,021.0 $ 7.6 $ — $ 10,386.3 Inter-segment sales 4.3 0.5 109.2 (114.0 ) — Total sales 6,362.0 4,021.5 116.8 (114.0 ) 10,386.3 Depreciation and amortization 64.3 28.8 5.6 — 98.7 Capital expenditures 16.3 5.9 2.2 — 24.4 For the three months ended September 26, 2020 Net external sales $ 5,034.7 $ 2,005.8 $ 6.3 $ — $ 7,046.8 Inter-segment sales 1.7 0.5 94.6 (96.8 ) — Total sales 5,036.4 2,006.3 100.9 (96.8 ) 7,046.8 Depreciation and amortization 61.8 11.7 8.6 — 82.1 Capital expenditures 7.1 29.9 3.8 — 40.8 EBITDA for each reportable segment and Corporate & All Other is presented below along with a reconciliation to consolidated income (loss) before taxes. Three Months Ended October 2, 2021 September 26, 2020 Foodservice EBITDA $ 159.9 $ 156.2 Vistar EBITDA 68.4 11.7 Corporate & All Other EBITDA (80.1 ) (49.0 ) Depreciation and amortization (98.7 ) (82.1 ) Interest expense (44.0 ) (38.8 ) Income (loss) before taxes $ 5.5 $ (2.0 ) Total assets by reportable segment, excluding intercompany receivables between segments, are as follows: (In millions) As of October 2, 2021 As of July 3, 2021 Foodservice $ 5,823.9 $ 5,791.7 Vistar 5,463.9 1,759.1 Corporate & All Other 293.9 294.9 Total assets $ 11,581.7 $ 7,845.7 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Estimates (Policies) | 3 Months Ended |
Oct. 02, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared by the Company, without audit, with the exception of the July 3, 2021 consolidated balance sheet, which was derived from the audited consolidated financial statements included in the Form 10-K. The financial statements include consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of shareholders’ equity, and consolidated statements of cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income, shareholders’ equity, and cash flows for all periods presented have been made. The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates used by management are related to the accounting for the allowance for doubtful accounts, reserve for inventories, impairment testing of goodwill and other intangible assets, acquisition accounting, reserves for claims and recoveries under insurance programs, vendor rebates and other promotional incentives, bonus accruals, depreciation, amortization, determination of useful lives of tangible and intangible assets, leases and income taxes. Actual results could differ from these estimates. The results of operations are not necessarily indicative of the results to be expected for the full fiscal year. Therefore, these financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K. Certain footnote disclosures included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to applicable rules and regulations for interim financial statements. |
Foreign Currency Translation | Foreign Currency Translation As a result of the Core-Mark acquisition on September 1, 2021, PFG now has operations in Canada. The operating assets and liabilities of the Company’s Canadian operations, whose functional currency is the Canadian dollar, are translated to U.S. dollars at exchange rates in effect at period-end. Translation gains and losses are recorded in Accumulated Other Comprehensive Income (“AOCI”) as a component of stockholders’ equity. Revenue and expenses from Canadian operations are translated using the monthly average exchange rates in effect during the period in which the transactions occur. The Company also recognizes gains or losses on foreign currency exchange transactions between its Canadian and U.S. operations, net of applicable income taxes, in the consolidated statements of operations. The Company currently does not hedge Canadian foreign currency cash flows. |
Revenue Recognition | 4. Revenue Recognition The Company markets and distributes primarily national and company-branded food and food-related products to customer locations in the United States and Canada. The Foodservice segment supplies a “broad line” of products to its customers, including the Company’s performance brands and custom-cut meats and seafood, as well as products that are specific to each customer’s menu requirements. Vistar distributes candy, snacks, beverages, cigarettes, other tobacco products and other products to various customer channels. The Company disaggregates revenue by product offerings and determined that disaggregating revenue at the segment level achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 14. Segment Information for external revenue by reportable segment. The Company has customer contracts in which incentives are paid upfront to certain customers. These payments have become industry practice and are not related to financing the customer’s business, nor are they associated with any distinct good or service to be received from the customer. These incentive payments are capitalized and amortized over the life of the contract or the expected life of the customer relationship on a straight-line basis. The Company’s contract asset for these incentives totaled $20.8 million and $19.9 million as of October 2, 2021 and July 3, 2021, respectively. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-1 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Oct. 02, 2021 | |
Business Combinations [Abstract] | |
Summary of Purchase Price for Acquisition | August 31, 2021. The following table summarizes the purchase price for the acquisition: (In millions, except shares, cash per share, exchange ratio, and closing price) Core-Mark shares outstanding at August 31, 2021 45,201,975 Cash consideration (per Core-Mark share) $ 23.875 Cash portion of purchase price $ 1,079.2 Core-Mark shares outstanding at August 31, 2021 45,201,975 Exchange ratio (per Core-Mark share) 0.44 Total PFGC common shares issued 19,888,869 Closing price of PFGC common stock on August 31, 2021 $ 50.22 Equity issued $ 998.8 Equity compensation (1) $ 9.2 Total equity portion of purchase price $ 1,008.0 Debt assumed, net of cash $ 303.4 Total purchase price $ 2,390.6 (1) Represents the portion of replacement share-based payment awards that relates to pre-combination vesting. |
Summary of Preliminary Purchase Price Allocation of Major Class of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary purchase price allocation for each major class of assets acquired and liabilities assumed for the fiscal 2022 acquisition: (In millions) Fiscal 2022 Net working capital $ 982.5 Goodwill 865.9 Intangible assets with definite lives: Customer relationships 370.0 Trade names 140.0 Technology 7.0 Property, plant and equipment 387.4 Operating lease right-of-use assets 218.8 Other assets 20.9 Deferred tax liabilities (235.7 ) Finance lease obligations (102.1 ) Operating lease obligations (217.6 ) Other liabilities (46.5 ) Total purchase price $ 2,390.6 |
Summary of Unaudited Pro-Forma Consolidated Financial Information | The following table summarizes the unaudited pro-forma consolidated financial information of the Company as if the acquisition had occurred on June 28, 2020. Three Months Ended (in millions) October 2, 2021 September 26, 2020 Net sales $ 13,464.6 $ 11,549.4 Net income (loss) 37.2 (50.6 ) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Oct. 02, 2021 | |
Schedule of Debt | Debt consisted of the following: (In millions) As of October 2, 2021 As of July 3, 2021 ABL Facility $ 1,373.2 $ 586.3 5.500% Notes due 2024 - 350.0 6.875% Notes due 2025 275.0 275.0 5.500% Notes due 2027 1,060.0 1,060.0 4.250% Notes due 2029 1,000.0 - Less: Original issue discount and deferred financing costs (38.5 ) (30.8 ) Long-term debt 3,669.7 2,240.5 Less: current installments - - Total debt, excluding current installments $ 3,669.7 $ 2,240.5 |
ABL Facility [Member] | |
Summary of Outstanding Borrowings, Availability, and Average Interest Rate under ABL Facility | The following table summarizes outstanding borrowings, availability, and the average interest rate under the Prior Credit Agreement and the ABL Facility: (Dollars in millions) As of October 2, 2021 As of July 3, 2021 Aggregate borrowings $ 1,373.2 $ 586.3 Letters of credit under ABL Facility 200.8 161.7 Excess availability, net of lenders’ reserves of $107.5 and $55.1 2,426.0 2,252.0 Average interest rate 1.59 % 2.32 % |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Oct. 02, 2021 | |
Leases [Abstract] | |
Summary of Right-of-Use Assets and Lease Liabilities in Consolidated Balance Sheet | The following table presents the location of the right-of-use assets and lease liabilities in the Company’s consolidated balance sheet as of October 2, 2021 and July 3, 2021 (in millions), as well as the weighted-average lease term and discount rate for the Company’s leases: Leases Consolidated Balance Sheet Location As of October 2, 2021 As of July 3, 2021 Assets: Operating Operating lease right-of-use assets $ 650.8 $ 438.7 Finance Property, plant and equipment, net 437.1 294.6 Total lease assets $ 1,087.9 $ 733.3 Liabilities: Current Operating Operating lease obligations—current installments $ 105.8 $ 77.0 Finance Finance lease obligations—current installments 71.5 48.7 Non-current Operating Operating lease obligations, excluding current installments 560.5 378.0 Finance Finance lease obligations, excluding current installments 355.0 255.0 Total lease liabilities $ 1,092.8 $ 758.7 Weighted average remaining lease term Operating leases 8.5 years 8.6 years Finance leases 6.2 years 6.2 years Weighted average discount rate Operating leases 3.9 % 4.6 % Finance leases 3.9 % 4.5 % |
Summary of Location of Lease Costs in Consolidated Statement of Operations | The following table presents the location of lease costs in the Company’s consolidated statement of operations for the periods reported (in millions): Three Months Ended Lease Cost Statement of Operations Location October 2, 2021 September 26, 2020 Finance lease cost: Amortization of finance lease assets Operating expenses $ 12.9 $ 7.2 Interest on lease liabilities Interest expense 3.9 3.0 Total finance lease cost $ 16.8 $ 10.2 Operating lease cost Operating expenses 29.6 27.8 Short-term lease cost Operating expenses 10.9 5.1 Total lease cost $ 57.3 $ 43.1 |
Summary of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases for the periods reported are as follows (in millions): (In millions) Three Months Ended October 2, 2021 Three Months Ended September 26, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 28.7 $ 24.6 Operating cash flows from finance leases 3.9 3.0 Financing cash flows from finance leases 15.0 8.0 Right-of-use assets obtained in exchange for lease obligations: Operating leases 19.7 26.8 Finance leases 35.7 28.9 |
Summary of Future Minimum Lease Payments Under Non-Cancelable Leases | Future minimum lease payments under non-cancelable leases as of October 2, 2021 are as follows (in millions): Fiscal Year Operating Leases Finance Leases Remainder of 2022 $ 102.7 $ 63.3 2023 122.2 80.9 2024 99.2 79.4 2025 81.1 74.3 2026 67.0 70.5 Thereafter 328.5 113.2 Total future minimum lease payments $ 800.7 $ 481.6 Less: Interest 134.4 55.1 Present value of future minimum lease payments $ 666.3 $ 426.5 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Oct. 02, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Numerators and Denominators for Basic and Diluted Earnings (Loss) Per Share Computations | A reconciliation of the numerators and denominators for the basic and diluted earnings (loss) per common share computations is as follows: (In millions, except per share amounts) Three Months Ended October 2, 2021 Three Months Ended September 26, 2020 Numerator: Net income (loss) $ 4.7 $ (0.7 ) Denominator: Weighted-average common shares outstanding 139.7 131.7 Dilutive effect of potential common shares 1.5 - Weighted-average dilutive common shares outstanding 141.2 131.7 Basic earnings (loss) per common share $ 0.03 $ (0.01 ) Diluted earnings (loss) per common share $ 0.03 $ (0.01 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Oct. 02, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Corporate & All Other is comprised of corporate overhead and certain operations that are not considered separate reportable segments based on their size. This includes the operations of the Company’s internal logistics unit responsible for managing and allocating inbound logistics revenue and expense. Corporate & All Other may also include capital expenditures for certain information technology projects that are transferred to the segments once placed in service. (In millions) Foodservice Vistar Corporate & All Other Eliminations Consolidated For the three months ended October 2, 2021 Net external sales $ 6,357.7 $ 4,021.0 $ 7.6 $ — $ 10,386.3 Inter-segment sales 4.3 0.5 109.2 (114.0 ) — Total sales 6,362.0 4,021.5 116.8 (114.0 ) 10,386.3 Depreciation and amortization 64.3 28.8 5.6 — 98.7 Capital expenditures 16.3 5.9 2.2 — 24.4 For the three months ended September 26, 2020 Net external sales $ 5,034.7 $ 2,005.8 $ 6.3 $ — $ 7,046.8 Inter-segment sales 1.7 0.5 94.6 (96.8 ) — Total sales 5,036.4 2,006.3 100.9 (96.8 ) 7,046.8 Depreciation and amortization 61.8 11.7 8.6 — 82.1 Capital expenditures 7.1 29.9 3.8 — 40.8 |
Schedule of EBDITA and Reconciliation to Consolidated Income (Loss) Before Taxes | EBITDA for each reportable segment and Corporate & All Other is presented below along with a reconciliation to consolidated income (loss) before taxes. Three Months Ended October 2, 2021 September 26, 2020 Foodservice EBITDA $ 159.9 $ 156.2 Vistar EBITDA 68.4 11.7 Corporate & All Other EBITDA (80.1 ) (49.0 ) Depreciation and amortization (98.7 ) (82.1 ) Interest expense (44.0 ) (38.8 ) Income (loss) before taxes $ 5.5 $ (2.0 ) Total assets by reportable segment, excluding intercompany receivables between segments, are as follows: (In millions) As of October 2, 2021 As of July 3, 2021 Foodservice $ 5,823.9 $ 5,791.7 Vistar 5,463.9 1,759.1 Corporate & All Other 293.9 294.9 Total assets $ 11,581.7 $ 7,845.7 |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements - Additional Information (Detail) - ASU 2019-12 [Member] | Oct. 02, 2021 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in accounting principle, accounting standards update, adopted | true |
Change in accounting principle, accounting standards update, adoption date | Oct. 2, 2021 |
Change in accounting principle, accounting standards update, immaterial effect | true |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | Oct. 02, 2021 | Jul. 03, 2021 |
Revenue From Contract With Customer [Abstract] | ||
Contract assets | $ 20.8 | $ 19.9 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) $ / shares in Units, $ in Millions | Sep. 01, 2021USD ($)$ / shares | Oct. 02, 2021USD ($) | Oct. 02, 2021USD ($)Acquisition | Sep. 26, 2020USD ($)Acquisition | Jul. 03, 2021USD ($) |
Business Acquisition [Line Items] | |||||
Number of acquisitions | Acquisition | 1 | 0 | |||
Business combination, cash and stock transaction value | $ 2,400 | ||||
Cash portion of the acquisition | $ 1,100 | ||||
Goodwill | $ 2,220.5 | 2,220.5 | $ 1,354.7 | ||
Net sales | 10,386.3 | $ 7,046.8 | |||
Net income | 4.7 | (0.7) | |||
Acquisition costs, after tax | 55.8 | ||||
Core-Mark [Member] | |||||
Business Acquisition [Line Items] | |||||
Business combination, cash and stock transaction value | $ 2,390.6 | ||||
Business combination share price in cash | $ / shares | $ 23.875 | ||||
Business combination, share exchange ratio | 0.44 | ||||
Cash portion of the acquisition | $ 1,079.2 | ||||
Intangible assets estimated useful life | 9 years 3 months 18 days | ||||
Goodwill | $ 865.9 | ||||
Net sales | 1,600 | ||||
Net income | 1 | ||||
Core-Mark [Member] | Customer Relationships [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets estimated useful life | 11 years | ||||
Core-Mark [Member] | Trade Names [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets estimated useful life | 5 years | ||||
Core-Mark [Member] | Technology [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets estimated useful life | 5 years | ||||
Eby-Brown [Member] | |||||
Business Acquisition [Line Items] | |||||
Payments of earnout | 185.6 | ||||
Payments of earnout, financial activity | 68.3 | ||||
Payments of earnout, operating activity | $ 117.3 | ||||
Accrued earnout payments | $ 7 | $ 7 |
Business Combinations - Summary
Business Combinations - Summary of Purchase Price for Acquisition (Detail) $ / shares in Units, $ in Millions | Sep. 01, 2021USD ($)$ / sharesshares | Oct. 02, 2021USD ($) | |
Business Acquisition [Line Items] | |||
Cash portion of purchase price | $ 1,100 | ||
Total purchase price | $ 2,400 | ||
Core-Mark [Member] | |||
Business Acquisition [Line Items] | |||
Core-Mark shares outstanding at August 31, 2021 | shares | 45,201,975 | ||
Cash consideration (per Core-Mark share) | $ / shares | $ 23.875 | ||
Cash portion of purchase price | $ 1,079.2 | ||
Exchange ratio (per Core-Mark share) | 0.44 | ||
Total PFGC common shares issued | shares | 19,888,869 | ||
Closing price of PFGC common stock on August 31, 2021 | $ / shares | $ 50.22 | ||
Equity issued | $ 998.8 | ||
Equity compensation | [1] | 9.2 | |
Total equity portion of purchase price | 1,008 | ||
Debt assumed, net of cash | 303.4 | ||
Total purchase price | $ 2,390.6 | ||
[1] | Represents the portion of replacement share-based payment awards that relates to pre-combination vesting. |
Business Combinations - Summa_2
Business Combinations - Summary of Preliminary Purchase Price Allocation of Major Class of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Millions | Oct. 02, 2021 | Sep. 01, 2021 | Jul. 03, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 2,220.5 | $ 1,354.7 | |
Core-Mark [Member] | |||
Business Acquisition [Line Items] | |||
Net working capital | $ 982.5 | ||
Goodwill | 865.9 | ||
Intangible assets with definite lives: | |||
Property, plant and equipment | 387.4 | ||
Operating lease right-of-use assets | 218.8 | ||
Other assets | 20.9 | ||
Deferred tax liabilities | (235.7) | ||
Finance lease obligations | (102.1) | ||
Operating lease obligations | (217.6) | ||
Other liabilities | (46.5) | ||
Total purchase price | 2,390.6 | ||
Customer Relationships [Member] | Core-Mark [Member] | |||
Intangible assets with definite lives: | |||
Customer relationships | 370 | ||
Trade Names [Member] | Core-Mark [Member] | |||
Intangible assets with definite lives: | |||
Customer relationships | 140 | ||
Technology [Member] | Core-Mark [Member] | |||
Intangible assets with definite lives: | |||
Customer relationships | $ 7 |
Business Combinations - Summa_3
Business Combinations - Summary of Unaudited Pro-Forma Consolidated Financial Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Business Combinations [Abstract] | ||
Net sales | $ 13,464.6 | $ 11,549.4 |
Net income (loss) | $ 37.2 | $ (50.6) |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Detail) - USD ($) $ in Millions | Oct. 02, 2021 | Jul. 03, 2021 | May 17, 2016 |
Debt Instrument [Line Items] | |||
Less: Original issue discount and deferred financing costs | $ (38.5) | $ (30.8) | |
Long-term debt | 3,669.7 | 2,240.5 | |
Total debt, excluding current installments | 3,669.7 | 2,240.5 | |
ABL Facility [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 1,373.2 | 586.3 | |
5.500% Notes due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 350 | ||
Less: Original issue discount and deferred financing costs | $ (0.5) | ||
6.875% Senior Notes due 2025 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 275 | 275 | |
5.500% Senior Notes due 2027 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 1,060 | $ 1,060 | |
4.250% Senior Notes due 2029 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 1,000 | ||
Less: Original issue discount and deferred financing costs | $ (0.5) |
Debt - Schedule of Debt (Parent
Debt - Schedule of Debt (Parenthetical) (Detail) | Jul. 26, 2021 | May 17, 2016 | Oct. 02, 2021 |
5.500% Notes due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instruments amount, interest rate | 5.50% | 5.50% | 5.50% |
Debt instruments maturity year | 2024 | 2024 | 2024 |
6.875% Senior Notes due 2025 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instruments amount, interest rate | 6.875% | ||
Debt instruments maturity year | 2025 | ||
5.500% Senior Notes due 2027 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instruments amount, interest rate | 5.50% | ||
Debt instruments maturity year | 2027 | ||
4.250% Senior Notes due 2029 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instruments amount, interest rate | 4.25% | 4.25% | |
Debt instruments maturity year | 2029 | 2029 | 2029 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Millions | Sep. 17, 2021 | Jul. 26, 2021 | May 17, 2016 | Oct. 02, 2021 | Jul. 03, 2021 |
Debt Instrument [Line Items] | |||||
Loss on extinguishment of debt | $ (3.2) | ||||
Unamortized deferred financing costs | $ 38.5 | $ 30.8 | |||
ABL Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instruments face amount | $ 4,000 | $ 3,000 | |||
Credit facility, maturity date | Sep. 17, 2026 | Dec. 30, 2024 | |||
Debt instrument description of variable rate | (a) the Base Rate (defined as the greater of (i) the Federal Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus 1.0%) plus a spread or (b) LIBOR plus a spread. | ||||
ABL Facility [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facility, commitment fee rate | 0.25% | ||||
ABL Facility [Member] | Federal Funds Effective Swap Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
ABL Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
4.250% Senior Notes due 2029 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instruments face amount | $ 1,000 | $ 1,000 | |||
Debt instruments maturity year | 2029 | 2029 | 2029 | ||
Debt instruments amount, interest rate | 4.25% | 4.25% | |||
Issue price of notes as a percentage of par value | 100.00% | ||||
Debt Instrument maturity date | Aug. 1, 2029 | ||||
Debt Instrument, description of redemption | Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2029 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2029 at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. | ||||
Percentage price of principal amount at which debt can be redeemed | 100.00% | ||||
Unamortized deferred financing costs | $ 0.5 | ||||
4.250% Senior Notes due 2029 [Member] | Change of Control Triggering Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage price of principal amount at which debt can be redeemed | 101.00% | ||||
4.250% Senior Notes due 2029 [Member] | Case of Asset Sale [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage price of principal amount at which debt can be redeemed | 100.00% | ||||
4.250% Senior Notes due 2029 [Member] | Beginning on August 1, 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage price of principal amount at which debt can be redeemed | 102.125% | ||||
4.250% Senior Notes due 2029 [Member] | On August 1, 2025 [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage price of principal amount at which debt can be redeemed | 101.163% | ||||
4.250% Senior Notes due 2029 [Member] | On August 1, 2026 [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage price of principal amount at which debt can be redeemed | 100.00% | ||||
4.250% Senior Notes due 2029 [Member] | Prior to August 1, 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage price of principal amount at which debt can be redeemed | 104.25% | ||||
4.250% Senior Notes due 2029 [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Early debt redemption percentage | 40.00% | ||||
5.500% Notes due 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instruments face amount | $ 350 | ||||
Debt instruments maturity year | 2024 | 2024 | 2024 | ||
Debt instruments amount, interest rate | 5.50% | 5.50% | 5.50% | ||
Loss on extinguishment of debt | $ (3.2) | ||||
Unamortized deferred financing costs | $ 0.5 |
Debt - Summary of Outstanding B
Debt - Summary of Outstanding Borrowings, Availability, and Average Interest Rate under ABL Facility (Detail) - ABL Facility [Member] - USD ($) $ in Millions | Oct. 02, 2021 | Jul. 03, 2021 |
Debt Instrument [Line Items] | ||
Aggregate borrowings | $ 1,373.2 | $ 586.3 |
Letters of credit under ABL Facility | 200.8 | 161.7 |
Excess availability, net of lenders’ reserves of $107.5 and $55.1 | $ 2,426 | $ 2,252 |
Average interest rate | 1.59% | 2.32% |
Debt - Summary of Outstanding_2
Debt - Summary of Outstanding Borrowings, Availability, and Average Interest Rate under ABL Facility (Parenthetical) (Detail) - USD ($) $ in Millions | Oct. 02, 2021 | Jul. 03, 2021 |
ABL Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt amount reserve by lender | $ 107.5 | $ 55.1 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 3 Months Ended |
Oct. 02, 2021USD ($) | |
Lessee Lease Description [Line Items] | |
Operating lease renewal term | 10 years |
Operating lease, Option to extend | true |
Operating lease, Option to extend description | options to extend the leases for up to 10 years |
Operating lease, Option to terminate description | options to terminate the leases within 1 year |
Operating lease, Option to terminate | true |
Finance lease renewal term | 10 years |
Finance lease, Option to extend | true |
Finance lease, Option to extend description | options to extend the leases for up to 10 years |
Finance lease, Option to terminate description | options to terminate the leases within 1 year |
Finance lease, Option to terminate | true |
Undiscounted maximum amount for guarantees | $ 18.7 |
Future minimum operating lease and finance lease payments, not yet commenced | $ 33.3 |
Lessee, operating lease, lease not yet commenced, description | These leases relate primarily to vehicle and warehouse leases and are expected to commence in fiscal 2022 with lease terms of 2 to 10 years. |
Minimum [Member] | |
Lessee Lease Description [Line Items] | |
Operating lease remaining term | 1 year |
Finance lease remaining term | 1 year |
Percentage of residual value guarantee under operating lease | 6.00% |
Operating lease expiration term | 5 years |
Operating lease expiration year | 2021 |
Operating leases, not yet commenced, lease term | 2 years |
Maximum [Member] | |
Lessee Lease Description [Line Items] | |
Operating lease remaining term | 19 years |
Finance lease remaining term | 19 years |
Percentage of residual value guarantee under operating lease | 16.00% |
Operating lease expiration term | 7 years |
Operating lease expiration year | 2027 |
Operating leases, not yet commenced, lease term | 10 years |
Leases - Summary of Right-of-Us
Leases - Summary of Right-of-Use Assets and Lease Liabilities in Consolidated Balance Sheet (Detail) - USD ($) $ in Millions | Oct. 02, 2021 | Jul. 03, 2021 |
ASSETS | ||
Operating | $ 650.8 | $ 438.7 |
Finance | 437.1 | 294.6 |
Total lease assets | 1,087.9 | 733.3 |
Current liabilities: | ||
Operating | 105.8 | 77 |
Finance | 71.5 | 48.7 |
Non-current | ||
Operating | 560.5 | 378 |
Finance | 355 | 255 |
Total lease liabilities | $ 1,092.8 | $ 758.7 |
Weighted average remaining lease term | ||
Operating leases | 8 years 6 months | 8 years 7 months 6 days |
Finance leases | 6 years 2 months 12 days | 6 years 2 months 12 days |
Weighted average discount rate | ||
Operating leases | 3.90% | 4.60% |
Finance leases | 3.90% | 4.50% |
Leases - Summary of Location of
Leases - Summary of Location of Lease Costs in Consolidated Statement of Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Finance lease cost: | ||
Amortization of finance lease assets | $ 12.9 | $ 7.2 |
Interest on lease liabilities | 3.9 | 3 |
Total finance lease cost | 16.8 | 10.2 |
Operating lease cost | 29.6 | 27.8 |
Short-term lease cost | 10.9 | 5.1 |
Total lease cost | $ 57.3 | $ 43.1 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information related to Leases (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 28.7 | $ 24.6 |
Operating cash flows from finance leases | 3.9 | 3 |
Financing cash flows from finance leases | 15 | 8 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 19.7 | 26.8 |
Finance leases | $ 35.7 | $ 28.9 |
Leases - Summary of Future Mini
Leases - Summary of Future Minimum Lease Payments Under Non-Cancelable Leases (Detail) $ in Millions | Oct. 02, 2021USD ($) |
Operating Leases | |
Remainder of 2022 | $ 102.7 |
2023 | 122.2 |
2024 | 99.2 |
2025 | 81.1 |
2026 | 67 |
Thereafter | 328.5 |
Total future minimum lease payments | 800.7 |
Less: Interest | 134.4 |
Present value of future minimum lease payments | 666.3 |
Finance Leases | |
Remainder of 2022 | 63.3 |
2023 | 80.9 |
2024 | 79.4 |
2025 | 74.3 |
2026 | 70.5 |
Thereafter | 113.2 |
Total future minimum lease payments | 481.6 |
Less: Interest | 55.1 |
Present value of future minimum lease payments | $ 426.5 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions | Oct. 02, 2021 | Jul. 03, 2021 |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Long-term debt | $ 3,669.7 | $ 2,240.5 |
Reported Value Measurement [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Long-term debt | 3,669.7 | 2,240.5 |
Fair Value Inputs Level 2 [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair value of long term debt | $ 3,773.2 | $ 2,346.2 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Jul. 03, 2021 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 14.70% | 64.70% | |
U.S. federal corporate income tax rate | 21.00% | ||
Net deferred tax assets | $ 265.7 | $ 159.2 | |
Net deferred tax liabilities | 641.7 | 299.6 | |
Valuation allowance | 1.3 | 0.7 | |
Unrecognized tax benefits | $ 0.3 | $ 0.3 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Oct. 02, 2021USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Outstanding contracts and purchase orders for capital projects and services | $ 121.1 |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Detail) - Purchasing Alliance [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Jul. 03, 2021 | |
Related Party Transaction [Line Items] | |||
Equity method investments | $ 7.7 | $ 6 | |
Purchases from related party | $ 465.7 | $ 243.7 |
Earnings Per Common Share - Add
Earnings Per Common Share - Additional Information (Detail) shares in Millions | 3 Months Ended |
Oct. 02, 2021shares | |
Earnings Per Share [Abstract] | |
Potential common shares not included in computing diluted earnings per common share due to antidilutive effect | 0.3 |
Earnings Per Common Share - Sch
Earnings Per Common Share - Schedule of Reconciliation of Numerators and Denominators for Basic and Diluted Earnings (Loss) Per Common Share Computations (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Numerator: | ||
Net income (loss) | $ 4.7 | $ (0.7) |
Denominator: | ||
Weighted-average common shares outstanding | 139.7 | 131.7 |
Dilutive effect of potential common shares | 1.5 | |
Weighted-average dilutive common shares outstanding | 141.2 | 131.7 |
Basic earnings (loss) per common share | $ 0.03 | $ (0.01) |
Diluted earnings (loss) per common share | $ 0.03 | $ (0.01) |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Detail) - Core-Mark [Member] $ / shares in Units, shares in Millions, $ in Millions | Sep. 01, 2021USD ($)$ / sharesshares | Aug. 31, 2021TradingDay |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Business combination share price in cash | $ / shares | $ 23.875 | |
Business combination, share exchange ratio | 0.44 | |
Consecutive trading days | TradingDay | 10 | |
RSUs [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares, granted | shares | 614,056 | |
Weighted average grant date fair value per share | $ / shares | $ 49.55 | |
Total grant date fair value of stock vested | $ 30.4 | |
Weighted average remaining vesting period | 1 year 9 months 18 days | |
Pre-Combination Vesting [Member] | RSUs [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total grant date fair value of stock vested | $ 9.2 | |
Post-Combination Vesting [Member] | RSUs [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total grant date fair value of stock vested | $ 21.2 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended |
Oct. 02, 2021Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information, by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 10,386.3 | $ 7,046.8 |
Depreciation and amortization | 98.7 | 82.1 |
Capital expenditures | 24.4 | 40.8 |
Foodservice [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 6,357.7 | 5,034.7 |
Depreciation and amortization | 64.3 | 61.8 |
Capital expenditures | 16.3 | 7.1 |
Vistar [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 4,021 | 2,005.8 |
Depreciation and amortization | 28.8 | 11.7 |
Capital expenditures | 5.9 | 29.9 |
Corporate & All Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 7.6 | 6.3 |
Depreciation and amortization | 5.6 | 8.6 |
Capital expenditures | 2.2 | 3.8 |
Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | (114) | (96.8) |
Eliminations [Member] | Foodservice [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 4.3 | 1.7 |
Eliminations [Member] | Vistar [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 0.5 | 0.5 |
Eliminations [Member] | Corporate & All Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 109.2 | 94.6 |
Operating Segments [Member] | Foodservice [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 6,362 | 5,036.4 |
Operating Segments [Member] | Vistar [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 4,021.5 | 2,006.3 |
Operating Segments [Member] | Corporate & All Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 116.8 | $ 100.9 |
Segment Information - Schedul_2
Segment Information - Schedule of EBDITA and Reconciliation to Consolidated Income (Loss) Before Taxes (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Segment Reporting Information [Line Items] | ||
Depreciation and amortization | $ (98.7) | $ (82.1) |
Interest expense | (44) | (38.8) |
Income (loss) before taxes | 5.5 | (2) |
Foodservice [Member] | ||
Segment Reporting Information [Line Items] | ||
EBITDA | 159.9 | 156.2 |
Depreciation and amortization | (64.3) | (61.8) |
Vistar [Member] | ||
Segment Reporting Information [Line Items] | ||
EBITDA | 68.4 | 11.7 |
Depreciation and amortization | (28.8) | (11.7) |
Corporate & All Other [Member] | ||
Segment Reporting Information [Line Items] | ||
EBITDA | (80.1) | (49) |
Depreciation and amortization | $ (5.6) | $ (8.6) |
Segment Information - Summary A
Segment Information - Summary Assets by Reportable Segment, Excluding Intercompany Receivables (Detail) - USD ($) $ in Millions | Oct. 02, 2021 | Jul. 03, 2021 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 11,581.7 | $ 7,845.7 |
Foodservice [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 5,823.9 | 5,791.7 |
Vistar [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 5,463.9 | 1,759.1 |
Corporate & All Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 293.9 | $ 294.9 |