Q2 2021 Performance Food Group Co Earnings Call
Good day and welcome to Pfg's fiscal year, Q2, 'twenty 'twenty, one earnings conference call.
If you would like to ask a question at the conclusion of the prepared remarks. Please press the star key followed by the number one on your telephone keypad at any time I would now like to turn the call over to Bill Marshall Vice President Investor Relations for PFG. Please go ahead Sir.
Thank you Lori and good morning, we're here with George Holm, Pfg's, CEO and Jim Hope Pfg's.
Vice President.
Our beliefs regarding our 'twenty 'twenty, one fiscal second quarter and first half results. This morning.
In vascular Lori and good morning.
Morning, Investor Relations section of our website at <unk> Dot.
Pfg's CFO.
Com today unless otherwise.
Regarding our 2021 fiscal second quarter and first half results. This morning.
They did in first.
Morning found on the Investor Relations section of our website at <unk> Dot.
Half results adjusted for certain.
Com unless otherwise stated.
<unk> mission of these non-GAAP measures to the corresponding GAAP measures.
<unk> 'twenty fiscal second quarter and first half for us.
As discussed on this call will include GAAP.
<unk> contained forward looking statements and projections of future rig.
GAAP a reconciliation of these non-GAAP measures to the corresponding GAAP measure.
These earnings release.
<unk> to back of the earnings release.
Release filings for various factors that could cause our actual results.
Release release contain forward looking statements and projections of future result.
<unk> and projects.
To review the cautionary forward looking statements section in today's earnings release, and our SEC filings for various factors that could cause our actual results.
<unk> I'm excited to share PFG.
Forward looking statements and projections.
Good morning.
<unk> now I'd like to.
Morning to say that our company has continued to weather the challenging market conditions.
Everyone and thank you for joining our call today.
<unk> on the food distribution industry.
Today for PFG.
Our hope that we will soon be able to gather together.
I am proud to say that our company has continued to weather the challenging market conditions.
Other lives resume a more normal pattern.
<unk> is in the food distribution industry.
Pattern shifts have been working hard to position our business for long term success.
On our favorite restaurant with friends and family.
Say, we are humbled.
<unk> for the day, when our lives resume a more normal pattern.
<unk> at Citi and resilience of our customers of share.
Working hard to position our business for long term.
Shown king individuals' in the restaurant industry.
So want to say we are humbled.
Each of.
<unk> surprised by the creativity tenacity and resilience of our customers have shown.
Of them and like the rest of the industry our business.
Individuals in the restaurant industry.
<unk> December.
Our partner.
And while January.
Part.
Typically a seasonally softer.
Since you brought.
On Monday.
<unk> challenges.
Months, we're encouraged by <unk>.
<unk> is the industry our business.
<unk> recently.
<unk>.
That slowdown.
Sweet.
December on.
And while January.
<unk>.
Fully a seasonally softer.
We do not.
Months.
Not to return to a more normal operating run.
On the food sales trends.
On rate for once the public feels comfortable gathering in groups, we anticipate a surge of volume.
Medically.
Therefore, we are prepared.
With more normal operating run.
Third we at levels.
Right.
Levels of inventory.
For once the public feels comfortable gathering in groups, we anticipate a surge of volume at rest.
Jim will share.
Strong, but we are prepared for this acceleration with the appropriate levels.
More on equation of Brian.
Levels.
Heart continues to meet our.
<unk> got our capabilities.
Truly a great feat considering the external challenge.
X will share more.
<unk>.
<unk> financial position in a moment.
Vacation of bar soap.
Integration of Brian Heart continues to meet our original.
Sure.
<unk> patients.
After the cost synergies.
<unk> great feat considering.
<unk>.
The external challenges that could have been.
<unk>.
The 50 million.
On a dismiss speaks to the dedication of our associates.
For full.
<unk> diligently to accelerate growth and capture our targeted.
<unk> is one.
Announced we have completed our.
Costs continue to believe that we will achieve the roughly 50 million.
We are pleased to see that.
Dollars.
This is recovery.
Full fiscal year following the close.
Coverage.
And Furthermore, we are pleased to announce that we have completed our transition services agreement.
Net.
Thanks, Brian.
Importantly.
See the pace of sales recovery.
<unk>.
Coverage, while still not quite.
Lined on all plans.
Quite at the growth level of legacy.
Plans.
C perform.
<unk>.
<unk> service Reinhart sales trend.
At the beginning of our fiscal third quarter.
The sales compensation structures.
<unk> of the lapping the acquisition.
<unk> been pushing ahead on all plans.
On the line by color.
Two of them on.
Color on how this will impact from modeling of our.
Do you know at the beginning of our fiscal third quarter of 2021.
Business many of this.
From the acquisition of relying.
Darcy.
On a moment Jim will provide color.
And environment.
Color on this will impact on modeling Bob.
<unk>.
Business quarters.
On the convenience stores Val.
But over the past several quarters many of the Starz channels continue to.
<unk>.
I think Liam.
Pass it by the current environment.
That's the work begin to travel and once again gathering.
Ironman, including convenience stores value retail and correction.
And we continue to expect a much.
Hum.
We have kept.
Much theater in Austria.
FX.
<unk> co.
People returned to work begin to travel and once again gathering group.
Coffee some modest rebound in some of these areas.
<unk>.
Areas of 2021.
This was expected.
One well evident that we should.
Theater in on.
Not for the vaccine.
<unk>.
In Asia.
It's more fully.
And hopeful there would be a modest rebound in some of these areas.
Excellent.
Areas fully in 2021.
See in movie theaters and professional.
Offices.
One.
On the pickup until the vaccination plan.
Offices, so we do expect these.
Plant.
Fine.
Do.
This improved from where they are currently.
Got to prove.
<unk> screams as a business.
For occupancy and movie theaters and professional.
She is focused on.
Often turn to normal levels. However, we do expect these lines of business.
Our next finding new channels and lines up.
Lee and remain profitable streams of business for <unk>.
Business areas as our Eby Brown continues.
So.
These.
On executing on the plan that has made it.
In our segment.
Decades.
Testament to the.
Gate panels and lines of business to provide long term profitable.
<unk> opened.
One of these areas as our eby Brown convenience store business, which has been a price.
And.
Bright spot for our Vista.
On the.
Testament to the team's hard work on the resilience of that channel.
Channel really pleased with how our organization has responded to current headwinds.
Panel two new distribution centers.
Winds Reinhart, our total case.
Centers of the.
Case volume increased.
Creased eight 4%.
Yes.
Net our entire business on.
And our independent case volume.
<unk>.
<unk> 20.
This was current headroom.
Six.
Including the benefit of Reinhart, our total case volume.
Net.
Kris.
Case on.
The percent in the quarter and importantly, our independent case volume.
<unk> <unk> nine.
<unk> six five.
9% only.
$5, excluding the rhinehart acquisition.
And we enjoyed the margin.
<unk>.
Dennis.
ACM.
Nick.
We believe that these results.
All per day.
Our strategy around.
600.
9%.
Around the.
<unk> only.
We feel extremely well positioned.
<unk> ended channel.
<unk> co.
Channel, we enjoyed the margin benefit from.
Now I would like to briefly address the.
On the mix these results validate our strategy around investing for growth in the independent chair.
Currently industry.
Channel extremely well positioned.
Our food.
<unk> full recovery.
<unk> modest slowdown in December.
Now I would like to briefly address the current operating environment.
And fewer holiday parties.
I think earlier along with the total.
<unk>.
Linda.
<unk> group.
Services.
The weather.
This experience.
With that said with.
<unk> slowdown in December.
With modest rebound in January more in line.
Simple Pedro restrictions fewer holiday parties.
<unk> with experience.
Some impact outdoor dining and colder.
So remember that we.
The other stat said.
We had a.
On the clean.
<unk>.
Free interest rebound in January more in line with year over year comparisons.
<unk> 2020 results.
Since October and November.
Salt to reflect the impact of the Panther.
Remember.
<unk> carried late.
We had a challenging 2020.
<unk> year ago quarter also benefited from the acquisition of Reinhart.
<unk>.
Which.
1020 resolve.
Which was.
<unk> only began to reflect the impact of the pandemic.
As for the long.
Then Nick.
Launch.
Long term debt as.
Mark for the year ago quarter also benefit.
Could you.
The position of Reinhart.
<unk>.
<unk>.
The spirit and strive.
Yeah.
To keep the momentum.
As always our intention is to run our business for the long term net.
On PFG.
Debt towards sustainable growth.
Associated.
Pleased with how the strategy has played out over the past year and strive to continue our momentum.
Our past many of our operating companies reached out into their local communities, making domains.
That has helped us do more for our company.
Co workers and families in need.
Our past history.
Needs actions with local the generosity.
These it's many of our operating companies reached out into their local communities, making day.
<unk>.
<unk>.
For the elderly.
From last quarter PMT publish.
On these <unk>.
<unk> ESG report.
Can you on local the generosity.
Two.
<unk> care and commitment.
<unk>.
Net to some others our universe.
It's been improving.
So cross our families.
Day support these efforts we have developed.
CFT publish.
And.
<unk> first annual ESG report.
We continue to address.
And social responsibility have long been important focus areas for our organization.
Addressed we also celebrated.
Efforts with developed an internal governance.
Our cash dedicated.
<unk>.
<unk>.
Restart ESG efforts.
So something our customers.
To address.
Dress shoes that are most important to our busy.
If we were so.
So proud of our drivers.
We also celebrated our customer service professionals, who along with our dedicated.
<unk>.
<unk> sales.
<unk>.
Sales.
Some of our countries.
Team is helping our customers.
Countries.
So.
<unk>.
Some difficult times.
Last quarter 21 of our drivers.
On a driver.
For adjusted into the if the hall of Fame.
Drivers.
Same on one of our drivers.
And so for our business.
Rivers.
And keeping our countries.
After more than 40.
42 years with zero.
This quarter 21 of our drivers were officially inducted into the Hall of Fame.
<unk> in the second.
<unk> drivers.
Net.
Oh boy.
It is.
<unk> recently retired after more.
More than two years with neuro.
Yes.
Commercial air shows.
<unk>.
Fitbit and our commitment to deliver.
And our other ways.
And second to none.
Ways the occasion, both for our business.
We accomplished.
Competition.
<unk> because we serve.
Bottomline is supporting our local communities from our customers with.
Serve detail on our second quarter and our finance.
As such for all the ways our people have risen to the occasion, both for our business and other stakeholders.
<unk> overview of our result.
<unk> over to Jim.
<unk> quarter of fiscal 2020.
Jim on our second quarter.
On the straight the resilience.
<unk> our business.
<unk>.
Thank you George and good morning, everyone.
As Leslie mentioned otherwise.
One.
The full 2021 results include the acquisition benefit.
On <unk>.
<unk>.
One which demonstrates the resilience of our.
Volume increased eight 4% in the second quarter compared to the prior.
Business in 'twenty. One results include the acquisition benefit from Rins.
Sure Youre, putting the impact of the Reinhart acquisition case volume declined.
4% in the second quarter compared to the prior year period.
As George mentioned.
<unk> acquisition of Ryan.
<unk>.
Excluding the impact.
5% in the quarter, including right.
<unk> clients.
And we're down.
<unk> interest in the center.
Just the impact of the Rhinehart acquisition.
You mentioned independent cases were.
As acknowledging December.
We're up six five.
Sent in the quarter, including Reinhart.
<unk> volume declines.
Hart.
<unk>.
This 10%.
The impact of the Rhinehart acquisition.
Italy.
Is excluded.
Even with a more challenging December.
Italy in the second quarter.
Remember over year independent case volume declines.
Other assumption of Reinhart contributed approximately $1 3 billion to net sales in the quarter.
And from 12, 8% in the second quarter of fiscal 2021%.
Quarter.
Six.
<unk> in the second quarter driven by cheese.
<unk> contributed approximately $1 3 billion to.
Moving on a quick word about.
Net overall food cost inflation was approximately two.
<unk>.
Persist in the second quarter driven by cheese.
Corporate at this point in time, we're confident in our ability to pass inflation on quick.
<unk>.
Without any major disruption to the business.
Asian inflation of late particularly.
Ted we know.
Right.
It's a dynamic time in the mall.
Segment from time, we're confident in our ability to pass inflation on quickly.
And months ahead.
Major disruption to the business.
For the second quarter of fiscal 2021 increased 14%.
At a time in the market.
<unk> 11.
The team will continue to monitor the situation closely in the weeks and months ahead.
Gross profit per case.
Second quarter of fiscal 2021 increased 14%.
Profit margin as a percentage of sales was 11 eight.
<unk> fair to the prior year peer.
<unk> compared to 11, 7% from the prior.
<unk> 26 from the second quarter versus the prior year peer.
Higher year mix.
<unk> profit margin as a percentage of sales was 11, 8%.
Shift and the addition of <unk>.
Net here to 11, 7% from the prior year period.
So by 18, 9% in the second quarter.
Period relative mix.
<unk> prior year.
Shift performance at our independent restaurant channel.
<unk> was primarily due to the rhinehart acquisition.
<unk> operating expenses rose by 18, 9% in the second quarter.
<unk> compared to the prior year period.
<unk> improved.
<unk> expenses.
<unk>.
It's fairly due to the rhinehart acquisition.
<unk> and lower insured.
So on a highlight a positive development.
Sure it through a smaller and more.
More experienced works.
Second quarter, driven by an improved medic.
Force 12.
<unk> experience.
Great.
Rate resulted in lower <unk>.
Second quarter net income declined 57, 3% year over year to 17.
This resulted in about 12 million.
Points Rose 10, 6% compared to the prior year peer.
In the second quarter net income declined 57, 3% year over year to $17 six.
<unk> presenting a 60.
EBITDA Rose 10, 6% compared to the prior year peer.
Adjusted diluted EPS.
<unk>.
With five in the second.
Earnings per share was <unk> 13 in the second quarter, representing a 66, 7% decline.
Second second quarter results.
Five year period.
<unk> segments.
Periods adjusted diluted EPS.
The segment's fiscal second quarter net sales grew 27%.
<unk> was <unk>, 7% year over.
By the acquisition of <unk>.
A year from our second quarter results for our two <unk>.
Iron ore increased $36 seven in the second quarter to $155 three.
Segment, 1% to $4 9 billion.
Decreased 11, 9% in the second quarter to $2 billion.
EBITDA.
Second quarter EBITDA.
Yeah.
Seven in the second quarter to $155 three.
The.
Sales service Star decreased 11, 9% in the second quarter to 2 billion.
Line and cash flow profile.
Adopter vis star was $38 7 million.
<unk>.
On a 31.
<unk> gains we saw in late.
Six of the prior year period.
Late 'twenty began to rip.
Briefly discuss our liquidity and cash.
<unk>.
Cash flow profile.
Okay.
As we mentioned on our last earnings conference call working capital gains we saw in <unk>.
Other cash outflow.
Late 40 began to reverse.
However, this was partially offset by $118 7 million income tax refund.
We continue to work down our payables, resulting in another cash outflow.
<unk>.
On that line item.
As a result cash from operations.
$118 seven.
<unk> was million.
Income tax refunds.
<unk> months of the fiscal.
Fund created from lower levels of inventory and.
Years continued management.
<unk> as a result cash from operations was just $24 4 million negative.
But $3 million in capital.
<unk> fiscal.
Its first six months of fish.
<unk> pleased with our organization's continued.
<unk> three 4 million over last.
<unk> and capital position.
Year continue to spin.
<unk> PFG invested $83 million in capital expenditures during the first six months of fiscal 2021.
In to new lines of.
$34 million over last.
Did the quarter with another.
Year continue.
<unk> total liquidity.
To support future growth opportunities, including increased capacity.
Quiddity quarter.
City churn into new lines of business.
<unk> 417 million.
This quarter was another strong.
$1 5 billion of availability on our ABL facility.
<unk> liquidity at the end of the fiscal second quarter consisted of approximately.
<unk> continued to.
$217 million of cash.
As George mentioned earlier in the call, we expect to ramp up our inventory position as the market begins to return to a more normal rate of say.
<unk> positioned to continue to invest in the business.
Sales certain.
As George mentioned earlier in the call, we expect to ramp up our inventory position as the market begins to return to a more normal rate.
Also <unk> remains well positioned to take advantage of M&A opportunities that may arise.
Right are still allow us to use our balance sheet at the appropriate.
So, yes, we intend to be disciplined with our capital allocation.
Time also PFG remains well positioned to take advantage of M&A opportunities that may arise.
<unk>.
Rise over the intermediate term.
In summary.
As always we intend to be disciplined with our capital allocation.
Marie it's performing well on the current environment.
Actions that we believe.
<unk> robust recovery.
Their value.
Covered the highly successful Reinhart acquisition is meaningfully contributing to our organization.
On this.
<unk>, we have completed the transition support.
And prepared for a robust recovery.
<unk> invested in our sales.
<unk> vessel Reinhart acquisition is meaningfully contributing to our organization.
Force encouraging.
<unk> completed the transition support.
<unk> shortly and the independents.
<unk> distantly invested in our sales.
Channel recovery in several of his start channels.
Force has driven.
<unk> will see avenues for growth over the long term.
On a volume.
Term all of this is supported by our liquidity position and capital position.
While we expect a slower recovery in several of the star channels.
<unk> from success.
<unk> see avenues for growth over the long term.
And the financial flexibility to do so.
Term liquidity position and capital position.
So proud of our organization and how our associates have risen to the challenges of the past 12 months.
And feel that we have the people.
On the effects of the pandemic in a few.
<unk> sales.
Weeks and while we recognize there.
So very proud of our organization and how our associates have risen to the challenges of the past 12 months.
And look forward to a robust.
But from the effects of the pandemic in a few weeks.
Above your interest.
While we recognize there is still some time.
Interest we'd be happy to take your questions.
<unk> will resume fully.
Question. Thank you.
<unk>.
I would like to remind everyone if.
Baird covering.
My question.
We appreciate your interest.
Please go on one on Europe.
Your telephone keypad.
Interest.
Just at we'd be happy to take your questions.
Pat.
To remove.
Question. Thank you.
George.
At this time I would like to remind everyone if you'd like to.
George.
Ask.
George.
Two questions.
Please.
On the number one on your.
Our hands on.
Hello.
<unk>.
Ask your question.
Sure.
And you wish to remove George.
Okay.
Our sales Q press the pound key.
So George I want to start.
Key question that you.
With the site.
Please.
I look at the margin.
That's it or.
Scott.
The warm as stripe the ones that are the most open.
John Heimbach <unk> of Guggenheim part.
Open versus that minus five.
George I want to start with the two things on the independent side.
Five.
If you look at the markets.
Five minus five.
<unk>.
In terms.
So they are the most <unk>.
So from accounts.
Are you actually seeing growth there.
Existing accounts new accounts.
<unk> five.
Accounts lines for existing account kind of break that out for us if you can.
Five segregate out the minus five right in terms of.
On.
King accounts.
We have several markets were actually.
Let's pick.
Really more.
For existing accounts kind of break that out for us.
Total company.
And I would say debt right now there.
Okay.
They're mostly in warm weather era.
For actually.
He is.
Our really.
Lee.
<unk> both on the previous year in sum total company.
<unk> Metro new.
Company I would say that right now there.
New England.
Where are we in warm weather areas.
<unk> co.
He is.
Listen to.
Our real.
The west.
<unk> challenged markets.
West.
Our metro.
Our new account growth is pretty consistent.
<unk>.
With what it's always been.
I'll go Minneapolis.
<unk> are a little bit better.
The normal.
<unk>.
This is Paul.
We are running less line.
Our new account growth.
On the quarter.
<unk> is consistent with what it's always been.
Last quarter, a little bit better.
But we're running more.
<unk>.
More.
We are running less.
Less lines.
Per order, but more dollars per order.
And more case.
Okay.
And we're running more.
That obviously should trends.
Sure.
Right.
Per account.
Your just your drop size.
Count as well.
As for higher price, the economics being better soon.
Assume that is having a positive impact.
Well on that right.
Obviously should translate.
Do you think that continues.
Right.
But what happens in a recovery.
I guess drop sizes or higher.
Let's see.
Right.
<unk> size.
On Opex.
Just from that is having a positive impact on profitability of the business.
When you kind of answered that I don't have a crystal ball.
<unk> is in a recovery.
I would change that.
Okay.
That.
What do you think.
I would hope that it would get better because the average customers should be doing more business.
I don't have a crystal ball.
<unk>.
I see what would change that.
People reduce their menu and.
That I would hope that it would get better because the average customers should be doing more business.
And.
<unk>.
That's affected our line.
But.
And we've seen.
But actually helped.
<unk> venue.
Our third line.
And.
So it's just a different environment than we're used to.
Kind of affected our lines.
Two.
And.
Yes.
Actually helped our sales.
Any big.
<unk> to that other than we should.
<unk>.
It's different environment than we're used to.
See some of these menu.
Two.
We will go back to <unk>.
<unk>.
I don't see any big change to that other than we should see volumes increase and I would imagine some of these menus.
Good.
We'll go back to being expanded.
Hey, Thanks, good morning.
Okay.
On the Star business.
Okay.
Business to EBITDA contribution improved a good.
John Kim.
The first quarter levels and wondered if you could comment a bit more on the moving pieces in that business.
Company.
And change first.
The net star business, the EBITDA contribution to net debt versus the first quarter levels and wondered if you could comment a bit more.
That's mean gradual improvement in <unk>.
And what changed versus.
Sales, so I mean, we dialed the biz.
Business back as much as we're comfortable dialing it back.
Yes, there's a.
Very.
Ari gradual and I mean gradual improvement in sales.
And then eby Brown has done very.
And we dialed the business back as much as we're comfortable dialing it back.
Well.
<unk> is on our convenience part.
Back.
Our.
We've got a little a little help on the expense line.
<unk>.
<unk> then eby Brown has done very.
Got it like in other.
Well that's the.
The bulk of the.
Driving that delta between the sales and the case growth.
Just wondering if you could provide a little more.
<unk>.
Sure.
And just broadly it looks like in other.
On the same magnitude you start Ted.
Contribution driving that delta between the sales of the case growth.
Ted what your thoughts are.
Little more.
Yes, I think that's going to really depend on.
We continue to the same magnitude interest start.
<unk> got a great benefit from.
Third quarter.
Mix.
Barry.
Didn't see much of a change in margin.
I think that's going to really depend on.
<unk> for convenience markets.
Mix, we've got we've got a great benefit from.
<unk> shipping in.
Mix.
Laughter.
And Ah.
Kind of one.
The change in margin.
One of them.
<unk> area.
Ship.
Adding two more convenience market.
Shifting.
<unk>.
Shifting that's going to add volume to the tobacco area, which is extremely.
Which.
<unk> gross margin.
Bose.
<unk>.
And day parts have been shifting.
So.
<unk>.
For us.
Early January we've had both shifting.
Unit impact as we get in.
Shifting volume to the tobacco area, which is extremely.
It's great incremental business.
<unk>, albeit good.
Business.
Gross.
I'm, probably not comfortable to.
So that could have some impact as we get into the third quarter.
To get from <unk>.
But.
Mix I don't see us having.
The business.
Any margin issues.
Probably not comfortable too.
But we're at now or versus the previous year than any other.
Two benefits, we'll get from mix.
The business Okay.
Mix don't see us having.
Great.
<unk> any margin issues.
Thanks.
Yes.
From the line of.
Edward Kelly of.
<unk>.
Right now versus the previous year in any of that.
Hey, guys good morning.
Okay great. Thank.
So question is really around sort of like the investor.
Thank you.
<unk>.
It comes from.
Net recovery, you've had an outstanding history on sort of managing the business for the long.
Term.
That.
Edward.
Can you provide a bit more color around how you're positioning for.
The investor.
Sure Great from an investment standpoint, and I ask this because your peers.
I think yesterday on sort of managing the business for the long term.
I guess it seems like with your.
Color around how you are positioning for.
Number is think about the next quarter or two how do we think about the progression of <unk>.
The cost.
Sure.
<unk> had issues.
<unk>.
<unk> recently that.
There is some temporary mismatch.
That.
Match on that.
You've pointed to day.
That does that impact the way, we should be thinking about the progression of EBITDA.
How do we think about the progression of sort of the cost.
EBITDA.
<unk> is revenue.
Puts and takes there I think there's some things that are going to help.
<unk> around that.
US never really managed.
That the way, we should be thinking about.
Managed short term.
And.
We were we didn't panic and we were really.
Okay.
Through this.
We've never really managed.
This.
Managers.
<unk> had a lot of disruption and we didn't want to add.
<unk>.
Add to that disruption so we've been real consistent.
Food, we're really consistent gone through.
Tension, where we're exceeding last year in sales from some market.
This option and we didn't want to add to that disruption. So we've been real consist.
That's it.
Distance, but we have markets as I mentioned, where we're exceeding last year in sales in some markets.
Where we now have more employees from the previous share and have had.
That's it.
Add back fairly significantly those same issues.
<unk> performing well and we were having labor.
<unk>.
So I think theres a potential for some disruption we're trying as best we tend to be ahead.
Issues add back fairly significantly.
Does it best.
<unk> same issues have come right back.
Income any consolidation of distributions.
I think theres a potential for some disruption we're trying as best we can to be ahead.
<unk> <unk>.
Of it we've continued to invest in.
<unk> I think that's going to help.
<unk> on any consolidation of distributions.
US we don't want to add disruption in the recovery either.
<unk>, because we don't want to give up any capacity.
Either.
<unk>.
So I think that's going to help us.
Moving forward, because we don't want to add disruption in the recovery either.
Down I mean, we're going to be.
<unk>.
Sponsel, but we only wanted to dial down so far.
The.
And most all of the.
We downsized our business we were careful I mean, we had to dial it down I mean, we're going to be responsible.
So we had an easier.
Ansible dialed down so far.
<unk> a way of getting them back because we really wanted.
And the people that we reduce.
Some of them work.
<unk> the furloughs with.
Works and we have some that are still doing.
<unk> easier.
I think what's going to help us is as we bring people back we're not going to have to train those people.
We will too.
People and maybe some retraining would be involved particularly with the salespeople I mean, it was such a long learning curve.
I think what's going to help us is as we bring people back we're not going to have to train those people.
Maybe some retraining would be involved particularly with the salespeople I mean, there is such a long learning.
It's not going to be easy.
Kurt on the only salespeople that we furloughed.
As you go but I don't think it's going to be an enormous issue.
Yes.
Hugh.
I do have concerns that people want to come back to work you know you always worry about that right.
And you got to have people ready to go but I don't think.
It's an enormous.
As people as people.
<unk>.
People got paid not to.
Was that people want to come back to work you always worry about.
To work probably way too long an answer.
That we've had that issue.
But the level of comfort that we're ready to go.
<unk> is people.
No.
People basically got paid not to work we did have some issues with.
So labour market.
So I'm, giving you probably way too long an answer.
Market, which on on the other side of this right.
But we're ready to go.
Seem like as volumes.
<unk> come back.
No.
<unk>.
But.
It's not going to be easy I guess to the match sort of like inventory.
But the other side of this right.
Oriented you obviously.
It does seem like as volumes.
There's a large portion of the industry.
<unk>.
That has been a really short term focused.
I.
Okay.
I guess on <unk>.
She is sort of like inventory and expenses on all against that and you obviously.
Call it like.
The right way, but theres, a large portion of the industry.
Your peers.
<unk> really short term focused.
Attempting to sort of ramp up against that.
The opportunity.
It looks like there would be.
<unk> has call it like.
The opportunity for you than what there was.
Your peers.
Dan.
Are attempting to sort of ramp up against that.
Got in working capital, but generating cash in.
Maybe not having as many problems.
<unk> opportunity for you then on what their wives Wang.
Tipping point is when people do have to invest more in receivables.
Everybody wishes cut in working capital, but generating cash in.
<unk> caught up on their payable so I think I think that's an issue out there in the.
The tipping point.
History.
Because people do have to invest more in receivable.
<unk> balance sheet.
<unk> inventory and quite frankly to get caught up on they are payable. So I think I think that's an issue out there in <unk>.
As for some support from.
History.
Our suppliers and we got.
Free if you look at our at.
The debt repurchase.
At RMP.
Obviously.
We don't have.
That concern from our liquidity.
Sleep.
The panic around anything, but we did ask for some support from our suppliers and we got.
We will see when it comes back I think another advantage.
Got it.
<unk> half.
So we don't have that concern from a liquidity to standard standpoint the deal.
Yeah.
With.
Customer.
So we'll see when it comes back I think another advantage.
Mix certainly in this store, but I think we had an advantage.
<unk>.
We have an excellent pizza business.
We grew.
<unk> that hasn't suffered as much.
Great from MX to <unk>.
Much has where the sit down restaurants.
Deal, particularly in Vista.
<unk> history.
But we've had an advantage.
And the ability to deliver but some of them have done well.
That hasn't suffered as much.
Well to the non commercial biz.
Much sit down restaurants that didn't have.
Sorry.
Have a good history.
Sure.
And take out an ability to deliver but some of them have done well.
It'll little.
Well and then.
<unk> contracts.
To the non commercial biz.
On tract.
Excluding.
Suffered.
<unk> This star.
And the <unk>.
Little.
Astronomers.
<unk>.
But then the flip side of that is debt.
<unk>.
<unk>.
National account business has suffered more because we're so big.
Little.
<unk> and casual dining and we.
Think.
Then the restaurant.
Think of a real strong comeback.
On the flip side of that is debt.
So we're in a good position.
Our non business has suffered more because we're so big in.
<unk>.
Dining and we think that that's going to.
If it.
Have a real strong comeback.
Sure.
So a lot of puts and.
Sure.
<unk>.
Taste.
<unk> in a good position.
<unk> ability.
<unk> be ready for it.
<unk>.
On inventory and receivables will certainly be as opportunistic there as we can be.
And if theres acquisition opportunities.
<unk>.
<unk>.
Because.
Thanks.
The ability to to reload.
Thanks, Ed.
On on inventory.
Kelly.
Receivables will certainly be as opportunistic there as we can.
Thanks for taking our questions.
George I just wanted to ask about about this start.
It sounds like.
Play Danielle.
Full recovery there eventually maybe.
Some parts do take a little longer.
Can you just remind.
Us.
George just wanted to ask about about this start.
And is there.
Back to full recovery there eventually maybe.
Part.
Do you take a little longer.
Channel is longer term.
Find.
Term and impact.
Our debt or the same profitability by channel is there.
<unk>.
Just thinking if we do end up with a little bit of a different mix in terms of channel so longer term.
Yes.
How that could impact.
<unk>.
As flagship business has been the whole time.
The margins in that channel.
<unk>.
Yes.
Okay.
First of all I think we've made a lot of progress surprisingly interest.
It's always been our best it's kind.
Our flagship business has been the whole time.
Kind of a big broad liners, followed by Vista.
<unk> it.
Star.
Level.
See that continuing once it comes back I did mentioned Theres two channels that I do have concerns with.
Will a profitable places are.
With that.
Our big broad liners, followed by Vista.
Makeup of.
Star.
See that continuing once it comes back I didn't mentioned Theres two channels that they do have concerns with.
So a lot.
With that office coffee service.
Lot of from the shelf.
This is Ben.
So we're going to see really good movies coming out one after another when things come back.
To do taxes negatively.
Back there and then.
<unk>, that's going to take a while because theres a lot of great products sitting on the shelf.
Then.
Good.
Shelf.
We're going to see really good movies coming out one after another when things come.
Net.
First of all.
Back.
Back share there and then.
Offices, that's going to have a negative impact on our office coffee.
Then face to look at.
Service, but the flip side of that is in our micro market business we've had.
First of all.
Pete.
People come back to offices, that's going to have a negative impact on our.
Good day.
Our office business.
They have.
Flip side of that is in our micro market business we've had.
I'm not going to have as many.
Had.
Any.
Bob.
<unk>.
And I mean net.
<unk>.
Any debt.
Yes.
<unk> carriers today.
It was.
And we.
We want on micro Mark.
Day, and said look.
Market and we've got some.
We're not going to have as many.
Some really effective.
And.
Putting those micro markets in.
And cafeteria.
I think that could benefit us I also feel very.
Mark.
About the vending area.
<unk> got some.
From a topline standpoint, that's still our biggest business in <unk>.
Some micro markets in.
Star.
So I think that could benefit us I also feel very good about the vending area.
The heavy users.
<unk> standpoint.
<unk> are mostly in jobs that you have to be there.
That's <unk>.
From that job, it's not something you can do from your home.
And I do feel.
Our most.
That shrink which.
Most of the users.
<unk> of that.
<unk> are mostly in <unk>.
Business going to see more manufacturing come back to the U.
<unk>.
On a short term.
Got it from your home.
Term benefit, but I think that's going to be a benefit for us.
Home factoring which is the biggest part of that.
So all those things together.
Business, we're going to see more manufacturing come back to the U.
<unk>.
It's not a short term.
Have fun at Vista and <unk>.
Term, if thats going to be a benefit.
Doing well.
Benefits.
Well we've made some.
Yes.
Some management changes there.
And together.
Are you just put additions.
Other and some of the things that our people have.
<unk> Patrick catcher, there who has been both the CFO and our senior VP of <unk>.
Hum.
Sales as the President and Chief operating officer are still reporting into.
And that changes put additions.
And to run that Bill.
I've appointed.
<unk>.
Patrick catcher there who has been both the CFO and our senior VP of sales.
Sure.
<unk> is the president and Chief operating officer are still reporting into.
Or you think they're going to really help.
And to run that.
In.
<unk>.
The.
On the future and then fairly near future.
<unk> had more time to spend in the convenience area.
Future fit today.
On these projects that we have going on that we think we're going to really help.
Good day and just to follow.
<unk>.
You did.
And then fairly near <unk>.
About M&A.
Future, that's kind of where we sit today.
As it is.
Good.
Clearly, but I was just curious what are you looking for today what is the right fit is there a geographical fit or capability.
Okay.
Our or PFS, just would love to hear what you are seeing and ideally.
What is the right fit is there a geographical fed or capability.
<unk> <unk>.
Star or PFS.
<unk> from the past.
Just what youre seeing and ideally what would be the right fit.
Past or deals where more.
Right.
Chip.
Non.
I feel that we've done.
Driven.
<unk> approach there were.
We're in the <unk>.
It gives.
Past kind of more opportunistic.
In both the <unk> side of our business and.
<unk> relationship.
In the foodservice.
Service.
Chip.
Chip.
But nothing that we could say today is actionable.
What we think is a pretty robust.
<unk>.
Above baseline.
When some normalcy.
Side of our business and.
Comes opportunities.
In the foodservice.
<unk> present.
From that we could say today.
So I think I'd also add that what we're looking for.
He is.
<unk>.
Phil.
Something similar to a REIT or maybe grow there was a strong cultural fit.
Debt maturities.
Fifth.
<unk>.
The focus of our organization, well and we embraced each other quickly.
Got it.
We're going to put in for of course.
The value and.
So orion or lumpy growth over a strong cultural fit.
No.
They are.
Can make decisions and our distribution chain.
Folks we embraced each other quickly added.
Very hard to culture.
<unk>.
Just.
Okay.
Bill.
Some spots on the supply chain.
Trying hard.
And our distribution channel.
<unk> well run company.
And we look.
Truly it would be a good fit new a lot of other <unk>.
Look the way we are.
People and it ended up exactly that actually.
Bill with Reinhart.
<unk> extremely well run.
Heart or uncomfortable.
<unk> co.
We felt like culturally it would be a.
So pleased with the growth that.
Good day.
Ended up exactly.
Or.
<unk> actually.
In fiscal January is over for us.
<unk> just needed to grow.
And it's we had overlapping.
We are pleased with the growth.
<unk>.
Growth that they are starting to show.
Moving from very very little not even not even.
And for Us and that's the first.
They had an excellent January.
Real encouraged.
Month business, there we haven't moved.
<unk> just gives us more.
Moved a little bit of business from very very low if not even not even.
Thank you.
And they had an excellent January.
Real encouraged.
Your line of Jeffrey.
<unk>.
It gives us more confidence to be acquisitive.
Great. Thank you very much.
Two questions the first one.
As we look through.
The current pandemic and thank the other side.
Good morning.
Here.
And do you expect the largest foodservice distributors.
Thank you very much.
<unk>.
<unk>.
Our questions the first one.
With greater benefit on revenue.
Other expense so I'm just wondering.
And I can think the other side here.
Your specific sales gains.
Just foodservice distributors, including yourselves.
And similar on preferred.
Yes.
Not particularly itemize, it maybe not seeing to the same magnitude.
On.
Well, it's in terms of the.
On your some of your peers have noted specific sales gains.
On your largest peer.
Thanks.
Tears Covid and then I had one follow.
Although I would prefer not to specifically itemized, there maybe not seeing the same magnitude.
But the share gains that we believe.
Revenue or expense for yourself and your largest peers.
Leave over the entire market.
One follow.
Yes.
You took.
Benefits have been on the on the revenue.
Took gains that we believe we made based on the information that we do get it doesn't cover the entire market.
<unk> okay.
But.
If we go back to 2019 industry.
From the on the revenue side.
Great.
Syed.
If things come back.
Similar.
Get back to normal.
To the.
Emel.
If we go back to 2019 industry size.
Expense.
So we're going to get it.
Jos.
Great benefit, particularly if things come.
<unk> always.
Similar.
<unk>.
Pre COVID-19.
<unk>.
<unk>.
Vista.
I think we learned going through this that we werent.
Our expense.
Arent as far.
Jos.
But.
I like to believe that we were always.
But wanted to continue to really invest.
<unk>.
<unk> and people.
<unk>.
I think we learned going through this that we werent as good as we thought we were.
People side is where we're going to get there.
We're also.
The best.
We continue to really invest.
<unk>.
Debt to people.
We will benefit.
So I would.
I do.
Say.
<unk>.
The revenue side as.
We're going to get the best bet.
Amount I think we know.
When I say, we got to see what things are likely.
It comes.
It.
I know we will benefit.
Can't begin to.
And then as you think about the <unk>.
Small to midsized players, whether it's on the restaurant industry or in your own foodservice distribution industry.
<unk>.
I'm just wondering.
I think it was hit harder.
I mean, how much capacity was likely removed it seems like on.
Size players, whether it's on the restaurant industry are in euro and foodservice distribution industry.
Both initially fear just trying to get your perspective.
Was hit hard.
On fees in terms of how the small and mid sized players are fairing versus yourselves.
Other distributions.
I'm going to preface that because.
Some had initially fear just trying to get your perspective.
Because fortunate we're a large company, but we don't have a huge.
On to Ferring versus yourselves.
Sure.
Yes.
On a preference that.
On the business that we have.
Because we don't have.
We're seeing that the independent.
<unk> company, but we don't have a huge share.
I mean amazingly.
Sure.
And where may be mid.
Terry what we.
Mid.
We see based on the business that we have.
It just.
But we're seeing that the independent.
Many of them have been hit hard from.
Amazingly.
Standpoint.
So and where may be mid.
But not really gone away.
As far as number of customers that are.
Some of them have retrenched, the ones that we do business.
Just many of them have been hit hard from from a volume.
Swift.
Think theyre going to.
<unk>.
Get big benefit.
Really gone away.
<unk> or for whatever reason in our business.
Hey have retrenched, the ones that we do business with.
Most hardest effect that had been the regional chain.
And I think theyre going to get a big benefit.
Change looks like.
<unk>, where for whatever reason in our business.
Not small enough to get the PPP not big enough to.
<unk>.
To be able to go to the public markets.
Most regional chain.
Redo your capital structure and that seems to be.
King.
Where the more difficult.
Small enough to get the PPP not big.
It's very hard for.
On the public markets.
Finally in the lab.
Redo your capital structure and that seems to be.
<unk>.
For the more difficult.
<unk>.
Ben.
With our competitors, it's very hard for us to see.
Okay.
Finally in the other.
Big once again I'll use the same word they've just been really resilient.
Last went out a bit.
<unk>.
<unk>.
We just don't know.
But.
No.
But that's new.
Much on sheet.
<unk>, they're not real big.
Sheet affected.
Big So once again I'll use the same word they've just been really resilient.
Capital.
<unk> and.
To dial back.
And we just don't know how much.
Up.
Much.
<unk> balance sheet.
Has been affected.
And one just last clarification.
<unk>.
To get the capital to.
The holiday season challenge.
<unk>.
<unk> just to clarify that.
On the Wildcat.
The weakness it seems like I think you mentioned that January was maybe back to October November levels.
Commendation.
<unk>.
I know in your prepared remarks, you talked.
About the holiday season challenges.
From a factual in terms.
<unk>.
Lapping strength through late March last year, and you did fully lap reinhart, but.
To October November levels.
To be aware of I think.
What was your question around the near term.
Labor shortage or anything along those lines, maybe something around inventory or.
<unk> share and you did fully lap reinhart, but.
Factual strength of what Youre lapping at the Reinhart GAAP.
Dressed.
Sure I think.
Major labor shortage or anything along those lines, maybe something around inventory or.
Two more short term one longer term.
The factual strength of what Youre lapping at the Reinhart Gasser.
But immediately.
I think.
Lee.
<unk> three <unk>.
Stimulus money comes.
Things from packages.
We see.
Just two more short term one longer term.
<unk> really quite.
But when restrictions get lifted you'll see a benefit immediately.
Quite right I mean, as the vaccine gets out there more.
Lee do as money comes.
More going to be a big.
Out be a positive.
Helps.
<unk>.
Ability to get product, we went through some pretty difficult times.
But the big one is the vaccine.
Our side, we're still run.
Z it's out there more I think that's going to be a big.
Running.
Helped as far.
<unk> inbound.
<unk> ability to get product, we went through some pretty difficult times.
<unk> proved.
<unk>.
And.
Side, we're still running.
<unk>.
Running.
It's clearly.
Historically.
Poor.
Virus issues within there.
Service has improved.
So they tend to be short term.
Issues.
Term.
It's quickly.
I'm pretty good.
Lee.
Good on.
As far as our suppliers go and I think a lot of the issues that we're dealing with in this star is just.
Facilities.
Many of those.
Short term.
<unk>.
<unk>.
Our retail.
Im pretty good.
Dale.
Good.
On as far as our suppliers go and I think a lot of the issues that we're dealing with in this star is just.
Pension I would say.
Just a few of those.
And our channel.
<unk>.
<unk> and.
Our retail.
Many of.
<unk>.
And.
Could sell everything.
Yes.
They didn't want to change their lines is off.
I would say.
Often.
Then maybe our channels.
I have a an item they want maybe to the.
<unk> <unk>.
Many of them.
So.
Because they could sell everything they could produce.
We continue to order.
<unk> is often so.
If they used to.
Order.
To have 15 flavors of an item they werent maybe to the.
<unk> to whether or not when things recover if those items will come back.
<unk> customers in our buyers continue to order and.
In.
It shows on.
And out of stock, but actually it's a discontinued.
<unk>.
Item as to whether or not when things recover if those items will come back.
In the.
That we don't know.
Great. Thanks.
I want to come back on the conversation around.
Stimulus.
Thanks.
Clearly there was a little bit of a benefit in the month of January from the stimulus.
Thanks.
Yes.
So the conversation started.
Hi.
On the weeks or months ahead so.
There was a little bit of a benefit in the month of January from.
In terms of.
Stimulus.
After that how are you guys thinking about the benefits of stimulus.
So that's yet to come.
The weeks or months ahead so.
So on the investment side to capture.
Fast to plan on terms of inventory to capture that.
I was thinking about the benefits of stimulus.
That and the <unk>.
Perishable area.
How do you prepare.
But we are doing.
So on the investment side to capture.
And when it gets announced.
That.
And then it comes out.
Just trying to run heavier inventories.
Fast.
It's really tricky in the perishable areas.
But that's what we're doing.
<unk> is a trend.
Doing stimulus when it gets enel.
<unk> get eased.
Now from.
<unk> being an immediate.
It was really difficult.
Prepared.
Because.
Baird.
Would it be starving for prop.
Now we have seen as a trend.
Talking from <unk>.
And when restrictions get east of it not being an immediate.
<unk>.
Even like in New York situation.
Media because.
<unk>.
Because it's <unk>.
It's 25% and they give.
Wood.
Give it to you that.
Good.
It's Valentine's day, I mean I'd rather.
And in time.
Other ways to be immediate.
So even like in New York situation.
<unk>.
And they are to these customers and find out.
When it is.
What their plan is are they going to.
Day, I mean I'd rather.
For those.
Rather.
Type of.
But that's when we can get on.
So I would just say we're as prepared as we can be.
On the DAU.
The high service.
Are they going to.
<unk>.
Have a reduced menu for it those type.
<unk>.
<unk> type of.
We're on.
This industry was really fine tuned.
But as we can be.
<unk> learned that going through.
<unk>.
This and.
Not the kind of service levels that we would like to.
And the really short lead times from our customer.
It was really fine tuned.
<unk> times from our manufacturers.
<unk> going through.
<unk> I mean, we're turning on that product very quickly.
This we operate.
Well the disruption.
With lead times from our customer.
<unk>.
<unk>, we try to get a shorter lead times from our manufacturers.
It is not back to normal yet.
<unk> product.
Net.
Very quickly and that level of disruption.
But.
On last question on.
<unk> <unk> and.
Hum.
And it's not back to normal yet.
Maybe.
Independence has maybe gone away.
Anything surprised you on how you said it also they are fairly.
Net.
But.
But.
But I'm surprised you on the markets that are maybe a little bit more open.
For business. These days on any sort of key learnings takeaways.
Okay.
I think surprised you on how you can also on they are fairly resilient.
Yes.
But I'm surprised you on the markets that are maybe a little bit more open.
Josh.
Our business day.
Any key learnings or takeaways.
T zero on with 50% means.
Okay sounds they reopen.
Chicago on West Coast.
Versus type of customer.
We can.
There probably isn't a situation that we haven't had to deal.
<unk> means versus zero on with 50% means.
With.
Pretty extreme amount.
Versus by type of customer.
Vince.
<unk>.
And let me add.
<unk>.
On the situation that we haven't had to deal.
<unk> talked to that's.
With.
Had similar.
<unk>.
Pretty extreme amount of.
<unk> for the most part have company.
Autonomy.
Congrats on product if they need to grab some products. So we've.
I know who to talk to the Tad similar circumstances.
<unk> had years than norm.
<unk> day.
For the most part have companies close.
It's <unk>.
Congrats on product that they need to grab some products. So we've.
But.
<unk> had more of that kind.
And.
Kind of intercompany transfers than normal.
<unk>.
I think that's the biggest thing we've learned is that we want to be extremely consistent.
It's really the ability.
Not for disruption.
And to react.
<unk> you.
You can't plan well enough for you.
I think thats. The biggest thing we've learned is that we want to be extremely consistent and not be disruptive with all the other disruption.
Thank you very much.
<unk>.
Okay.
You can't plan, well enough and you're.
Comes from.
Just trying to get these things done without the customer being affected.
Your line of Hey, guys. Good morning, it's actually Fred Wightman on for Greg I wanted to circle back on the Reinhart commentary. The comments that you had made on the top on a really positive just as far as.
At closing the gap with that legacy PFG business, but how should we think about the delta as we move through the next few quarters and sort of get close.
Got it.
Prepayments that you had made on the top on a really positive just as far as.
Closing the gap with that legacy PFG business, but how should we think about the delta as we move through the next few quarters on sort of get closer.
Sure.
A more normalized.
There are numbers and like I said it doesn't follow the entire industry.
<unk>.
History.
We would.
That's a good quest.
Get.
<unk>.
It's from versus the previous year and market share of course information.
When we get our numbers and like I said it doesn't follow the entire industry.
Asian industry Thats the only two.
<unk>.
Two things yes.
Yeah.
We don't necessarily.
Sure.
No, but we.
Versus the previous year and market share of course information.
Yes, it's foodservice.
The partnership.
Service the first.
And then we get rest of the industry. That's the only two things that we.
Year legacy Reinhard or wood.
Yes.
Ever.
We asked to get Brian Hart's numbers.
About.
From its food services.
<unk> to the industry.
<unk> and we want to see.
Tree right after shelter in place.
Stopped legacy, Brian Clark or whatever.
<unk> about midway between how we do.
They were about.
<unk>.
At the same as the rest of the industry.
Mt.
Free early.
Owned and.
Lee it after shelter in place.
Place.
On that are growing are actually doing better than last year.
Midway between how we do.
Year, because they are very heavy in the north.
New ground.
North.
<unk>.
We have several that are there.
That have.
We are actually doing better than last year.
For a period of time, it's a good market for.
Year, because they are very heavy in the north.
It will call for a period of time then.
And then when you get to.
North pretty shut down.
And once.
<unk>.
<unk> is not doing as well, but a really closing the gap quickly.
These are these are good experienced people that have been around in the industry.
It's different.
<unk> a long time.
At the time.
Jim.
And then when you get to.
Hey to day very much.
One.
Much but they do like what few chain.
<unk> really closing the gap.
<unk> is a subjective.
<unk>.
<unk> I think that's important.
These are these are good.
They're as well about the fact.
Good <unk>.
That we think about on Delta.
St.
Of the 200 and the rest of the business.
And then Chi.
<unk>, what they do day to day very much.
Soon really come into B.
Much.
It's just one business.
Just.
<unk> food distribution company.
That's in <unk>.
And to start letting that go.
Well about the fact that.
Goodbye.
But on Delta.
About 4 million company performing well on that one company.
As it's happening right now and it's really come into B.
He is on.
Just one bit.
All of the day, even think of themselves.
<unk> <unk> company.
Sales or PFG.
Any anything that go we will think about adult that we'll think.
You called out a $12 million benefit from lower medical costs on the Opex line.
At a one time.
<unk> will fit so well that I'm not sure they even think of them.
<unk>.
Any help there would be.
Gina.
Great.
I can give you some color on.
Great and then Jim I think you'd called out $12 million benefit.
And we actually paid our operators paid a lot of attention.
So is that a one time.
And workers' comp and health and welfare of our employees.
<unk> forward.
And so did our employees of course, everyone.
I can give you some color on.
Was on how they went about their job.
I think there's a combination of things that happened, we actually paid our operators paid a lot of attention to safety.
Job painful part of the business.
Up in health and welfare of our employees.
<unk> less employees in the workplace.
<unk> force everyone was.
On the frequency and.
About their job.
Risks.
Job.
So those two things combined nicely our attention in the number of <unk>.
Net.
Folks combined nicely to give.
It's a simple part of the business.
As a.
As well as the fact that we.
If it transparent and make sure that folks knew that and at the same time, we're pleased.
<unk> to see that.
Had frequency on risk.
I would think that.
Risk.
It's.
So those two things combined nicely our attention in the number of.
<unk> sort of growth.
Folks nicely to give us.
Growth that will happen on inevitable.
As a.
We'll have more people in the workplace.
Transparent and make sure that folks knew that and at the same time, we're pleased.
Place keep taking care of our employees, it's really important.
<unk> probable that as we return to a robust period of growth.
To us as a possibility.
Growth that will happen on inevitable.
On the magnitude.
People in the workplace.
<unk>.
Place, we're going to continue to focus on safety.
Thank.
And care of our employees is really important to.
Our next question.
I wouldn't see it as a onetime.
Hum.
<unk>.
Morgans.
But I think there is a possibility.
Good morning.
Wanted to ask about digital.
On that over.
And may be evolving or not evolving.
I understand you have a different go to market strategy with respect to your sales force, but your key competitor is now raising the bar on Digi.
<unk>.
A lot of businesses that are more fully digitizing.
Wayne.
From this.
I wanted to ask.
It's about digital and how your thoughts on maybe evolving or not evolved.
This opportunity our consumers our customers are getting younger more digitally savvy and therefore.
The key competitors not raising the bar on digital.
We need each other as a percentage of sales.
But a more fully digitizing.
Sales line business and <unk> different than maybe.
From this.
Maybe the buying hard had a different approach you could learn from or is there something you could teach them.
Customers are getting younger more digitally savvy and therefore, we need to keep pace.
Them.
And can you talk about digital penetration as a percentage of <unk>.
Among the big businesses.
Digital business.
Thus far is one different.
This call just the customer.
Maybe you could learn from is there something you could teach them. How do you think about all of that combined.
<unk>.
<unk> phone.
After quarter its always been something that has gone up.
Yes.
On particularly early in the shelf.
Phil business.
Their input.
Alright.
That actually went down for.
Facing the order themselves.
For Us I think.
<unk> has.
Just.
<unk>.
So from there has had any more questions.
Louise after quarter, its always been something that's gone.
And issues to deal with.
On a purely early and the shelter in place.
Up to.
Place.
Some cases, they furloughed the person.
<unk> down for.
On the orders and they did anybody else knew how to do it is that simple.
For us, it's just a simple thing.
Simple.
Thing of customers have any more questions in.
<unk>.
More issues to deal with.
On <unk>.
Somebody.
100% of our Biz.
In some cases, they furloughed the person.
It's done.
The orders and there isn't anybody else knew how to do it it was that simple.
Star is very close to 100 <unk>.
Simple stall there.
<unk> almost all.
That digitally.
On hit outside of our independent.
Italy <unk> foodservice.
Of our <unk>.
Brian Hart.
<unk> foodservice.
Similar.
<unk> hand know the percentages because they have gone down.
<unk> is very close to 100%.
So.
Almost all.
Thanks from Reinhart.
Of that.
We felt like.
The remote order entry system.
Yes.
Brian Hart.
Performance food service.
On.
And know the percentages because they have gone down.
This study will have the same.
<unk>.
We did get learnings from Ryan.
One.
We felt like.
It's come in it will really be effect.
Like.
<unk>.
Better than what performance foodservice.
<unk>.
Service.
We will continue to adopt.
Add boon.
Yes.
And.
Has the same one.
And Lee careful debt.
And we feel.
Of.
It's good system and it will really be effect.
Debt, we're going to it at the rate in which our customers want.
<unk> that people continue to adopt.
So it's not 100% the case.
And.
But.
And really careful debt.
But and that's what.
Debt force adoption.
We're continue to.
So I'd like to thank debt that we're going to it at the rate in which our customers want that.
Look.
Your next comes from the line.
That's not 100% the case.
Line on mute.
But but.
Thanks for the question.
That's.
But right now at the end.
Net.
And of its share.
We continue.
How your strategy on a post Covid era.
Look.
Ore from the composition of that growth across new business, while share expansion.
Question.
On a.
From.
He can explain organic.
The lineup.
Gannett growth levels.
Brendan.
Levels relative to what we saw pre COVID-19.
A question right now at the end of the channel can you share.
So we took a lot of pride in going many years many quarters.
How do you split across in your business.
Orders the independent side, we grew our case.
Thank you.
<unk>.
Organic case growth levels.
60 fell off.
We saw two income.
Of that quarters.
Okay.
Pre COVID-19.
Well, we took a lot of pride in going many years many quarters.
We went into this.
Orders independent side, we grew our cases.
This call on track.
The 6% to 10%.
Track.
<unk> and we fell off of that.
I think.
For a few quarters.
Think come out.
<unk>.
Of it on track.
<unk>.
We were back to.
Can throw numbers more than 19% to 20, because obviously those would be extremely soft.
Two.
Soft persons.
Kind of back on track.
When you get outside of our independent foodservice.
<unk>.
Services I think.
Come out.
Maria.
Of it.
We've got some good wins.
We will compare on numbers more than 19% to 20, because obviously those would be extremely.
<unk> pretty deep in the discussion.
Soft when you get outside of our independent.
<unk>.
On to foodservice.
Really aggressive like from an RFP standpoint, or that I mean, what we.
Service good wins.
We can.
Negotiate I think will be really important to us we've always.
<unk> are.
Been a company that does a significant amount.
Our period.
Spain business.
I don't see.
On the <unk> side.
See us like from an RFP standpoint, or that I mean, what we.
Syed from good plans.
We can negotiate I think will be really important to us we've always been.
Round.
Been a company that does a significant amount.
Getting.
Mt Athene business.
Net.
Then on on the <unk> side.
Syed.
Close to world.
Okay.
But I think.
<unk> got some good plans around.
<unk>.
Round.
Types of business.
To above the numbers that were pre COVID-19 like I said, we've got two categories. There, we worry a little bit about.
<unk>.
And then M&A like I said, we've got.
Got a pretty good pipeline right now nothing.
Posted.
Net sales.
We'll continue to.
We're encouraged.
On the grow above the numbers that were pre COVID-19 like I said, we've got two categories. There, we worry a little bit about.
<unk> tore but.
About.
And then M&A like I said, we've got.
Sure.
We've got a pretty good pipeline right now nothing that I would say is today actionable.
Or that you expect.
But we're encouraged.
Other that's an increased willingness to have a smaller.
But it won't be.
I know.
Different than we were before.
I guess any color on now.
Plenty.
But.
Got it.
I was talking about income.
There have been any changes on restaurant customer behavior.
Yes.
Yes.
Jack.
Field.
Great.
Debt.
Firstly on distributors.
The restaurant tours should buy from.
Less people, it's more efficient.
Any.
<unk>.
Yeah.
So like that as long as we're one of the ones they buy from.
Oh yeah.
From.
Sure.
Sleep.
But there.
Oh.
There is just I would say I think take out is going to be.
Louise.
Certainly not what it is today, but takeout is going on.
And part of the busy.
<unk>.
<unk> and.
So we like that as long as we're one of the ones they buy from.
And disposable program.
From.
And being really tuned in.
See I mean, I think take out is going to be.
To what.
Certainly not what it is today, but take out is going to be an important part of the business.
With that I think.
Food.
Get Boston.
Often will have winners and losers in.
Program.
On that stay.
And.
<unk> really tuned into.
Day.
What the Mers needs are there I think is going to be real important.
The purchasing behaviors of a restaurant.
The free goes.
Strong.
Ranked <unk> in hand with that I can get going on.
On.
Drop off in.
They've changed.
We will lose in.
<unk>.
On that it's here.
<unk> on period of time now.
<unk> that's a change.
Our debt to the new habit.
<unk>.
It may.
That's.
Seeing behaviors of a restaurant.
I really.
Definitely changed.
I got to think they've changed.
Bob on.
<unk>.
January.
<unk> for such a long period of time now.
Good day, perhaps.
<unk> debt.
I'm on for restaurant.
Strong pricing and it's been volatile.
But maybe that's.
On <unk>.
It's just.
GAAP analysis.
<unk> from weather.
Definitely changed.
It's been a little volatile.
I'm just hoping for help on.
Total.
Yes.
On desktop on January.
Just to be careful.
Any color you can share guidance.
Flow because.
Perhaps a.
Does it's a soft month.
Non hearing kind of from volatility.
<unk>, it's really good.
Thank you Allison.
Good.
On profit.
Our fiscal third quarter calendar first quarter ends.
Theyre a little volatile.
Ends up all about Mark.
It'll.
<unk> channel.
They always to be careful.
<unk> is a long time.
For January because.
<unk> had some really good third quarters on ice had really.
It's really good.
Good and not so good third quarter.
Good a fiscal third quarter calendar first quarter.
So.
Quarter.
So it's been improved.
It's up about March.
<unk> and it has been.
<unk>.
<unk> been at this a long time.
Great. Thanks, so much for the.
Good third quarters <unk> had really.
Comments on if.
Good.
If you'd.
<unk> as a good third quarter.
My question on.
So.
Your next year.
You just mind.
William Reuter.
But it's improved.
Okay.
<unk> and it has been volatile.
This is Mary on for Bill Thanks for taking our question.
Great. Thanks, so much for the comments.
<unk> flavor inflation and what percent increase in wages.
Comments on that you'd like to.
You too.
The plaintiffs.
Asking please press star one.
Yes.
Income from the line of William Reuter of Bank of America.
We are seeing some labor inflation.
Thanks for taking our questions.
When a project in the future.
Labor inflation and what percent increase in wages.
<unk> helped us.
Are you at some point.
As mentioned, we furloughed people with benefits and we brought them back as quick as we possibly can.
Based on excuse me, yes, we are seeing some labor inflation I'm not prepared to give a number and I certainly don't want to project in the future.
Could.
And I think I will leave the answer it.
Sure.
It's too soon to predict.
As we.
We furloughed people with benefits and we brought them back as quick as we pause.
<unk> the operators will be able.
Possibly here of the business and to take care of them of course.
On it smooth.
So we'll manage we'll manage it well.
Okay.
Got it and.
Well.
I think I'll leave you to answer it.
Do you.
It's a tough one to predict.
And if so how.
<unk> before.
I am confident that our operators will be able.
Inflation rate, we have right now we're very in tune with with inflation and the cost of product daily.
And.
Daily.
Do you expect food cost inflation will contribute to gross margin expansion and if so how.
And we'll be ready.
It typically does and we talked about the current inflation rate we have right now we're very in tune.
<unk> question.
With patient in the <unk>.
Comes.
Cost of product daily.
Comes from.
<unk>.
Difficult to predict where it will go.
Have you changed your lever.
But.
Average.
And it will be.
<unk> get below four times.
Thank you so.
I guess the target would be by mid next year.
How much.
Year, given what the original loss is that.
Check casella of Jpmorgan.
Correct, Yeah, we haven't changed our thinking around.
Adam.
Have you changed your plan.
Rich talked about.
But you can get below four times.
<unk> run rate in a normal economy in a normal environment anywhere between two and a half and three and a half absent.
Is that.
On a major act.
Acquisition.
Crafted our thinking around leverage.
Ascension do make.
<unk>, we've talked about.
Okay, great and.
I'll be in a typical run rate in a normal economy on a normal environment anywhere between two five and three other half apps.
And then from the pandemic.
On the Asia.
I kind of understand how.
On your position.
Big.
That's still where we like to be in the numbers you just mentioned do make sense.
So for that.
Okay, great and.
We haven't actually disclosed that number.
And then.
But foot.
If you have Ryan on in for a full year.
I guess theres a pandemic.
It isn't.
And how big.
<unk>.
Big the theaters and office segments, where the band as a percentage of revenue can you give us any.
<unk> I may have missed it did you provide what reinhart's organic growth would have been.
<unk>.
Before but.
On the.
But we like that business. We appreciate it it's helpful, but it isn't.
Can you say what.
<unk>.
Sorry in terms of trend with any of your existing.
It's one less day do you I may have missed it did you provide what reinhart's organic growth would have been in the quarter.
Business with share numbers and like I said that the information we get.
<unk>.
Net inside of our company is not the entire industry.
Uh huh.
But.
On MLR in terms of fresh.
But its option.
Gary existing businesses.
They've gone from trending the same as the rest of the industry.
This is the best we can determine with share numbers and like I said.
<unk> doing in.
Shouldn't we get its outside of our company.
On the rest and some.
But the entire industry.
Good.
But it's.
The industry is.
It's up.
Debt they've gone from trending the same as the rest of the industry.
Fine.
<unk> two about halfway between.
<unk>.
And.
I think you can kind of figure it out from there.
On the rest of that Theyre, making.
There really <unk>.
It appears as.
Helpful.
As if the rest of the industry.
As for last quarter, we're somewhere in the low 20% declines.
Question for today.
<unk>.
I'll return the call to Bill Marsh.
So.
Marshall.
I think you can kind of figure it out from there.
Thank you for joining our call today.
There would be helpful.
Today questions. Please contact us at Investor relation.
Paul.
<unk>.
Hey, Matt.
Thank you for participating in Pfg's fiscal.
Our final question for today I will now return the call to Bill Mark.
Yeah.
Marshall closing comment.
Thanks, and have a wonderful day.
Thank you for joining our call today.
Day.
[music].
Today disconnect your lines and have a wonderful day.
Okay.
Sure.
Okay.