US Foods Holding (USFD) 12 Feb 192018 Q4 Earnings call transcript

Thank you. Good morning, everyone. Welcome to our Q4 and Fiscal Year 2018 Conference Call.

Joining me today are Pietro Satriano, our CEO; and Dirk Locascio, our CFO. Pietro and Dirk will provide an update on our fourth quarter and full fiscal year 2018 results and provide some perspectives on fiscal year 2019. after remarks questions your take our conclude. prepared We’ll XXXX. and stated, fiscal we’re Instructions] fiscal XXXX During our otherwise call today’s year in period and [Operator comparing unless fourth the same for year quarter

slides Our earnings release of accessed earlier this page the Relations website. can today’s Investor morning on our be and issued presentation

the potential In addition forward-looking statements latest Please those which the review certain XX-K statements. to our in Form today’s actual our these implied statements. during those differ to made historical SEC filed cause could materially with in risk factors, expressed information, considered call for factors results are or from

expect We later XX-K Form fiscal file to XXXX this week. our

All measures earnings press during the started. call, out the Lastly, I’d our refer point are schedules like to most on now, And us we today’s call to to comparable GAAP to over included reconciliations Pietro the financial in financial to turn I’ll that measures. release. will certain non-GAAP get

everyone, joining Good I’d two Melissa. earnings us topics. like to thanks Today, quarter fourth morning call. Thanks, our cover for and for

quarter overview our and March. an last investor fourth outlined report results, initiatives our of progress day second, a at on the First, brief we

page the X X Let’s begin results. sum up the on that fourth takeaways with quarter’s

customers perspective, other First, was Independent we discussed in case year with from in a we all close line volume flat. November. growth Case growth the exited to for what exceeded roughly X%.

X% of rate short However, we fell the exit health and care hospitality that expected.

private third, a achieve items, more grew the the continued our to driven in customer X.X% case, growth unanticipated gross and OpEx by we in profit per Second, grow growth few brand case because outpacing operating quarter. to EBITDA with And leverage, actions for of mix. favorable for

a contributors that earnings Dirk the as growth As these adjusted to later we growth for our XXXX outlook provided third would items explain, and quarter least are call EBITDA will the be without on X.X%. our quarter have for And main result, closer reaffirming at were unusual been nature the X%. in EBITDA will

to minutes our results, at quarter’s initiatives Before delving last of we like into you the on I’d Day Investor a spend couple March. our further progress on outlined the updating

So three with the page industry. moving and starting to

than for general in continue latest food offering, distribution, on and under Spring away excited clip to and grow chains. at food home, continue over data and home service increasing continues sustainable I'm Good food sustainable upcoming gain large to to sub-brand faster number independents expanding tailwinds shows at organic our our particular. of the focused XXX. industry share to in consumed favorable in be see from The continues will Consumer independents grow Serve to and products interest We products a Scoop from that our

chef managers. Direct penetration US stores, also impromptu grew brand Second, model including growth by and markets. gross XXXX, strategy XXXX, with on our new strategy, basis resonate opening with made of continues which the independent our profit differentiated to increased we We our XXX customers. case. multi-channel progress our private along putting adding In in supported In mix in our development introducing team-based completed place business local per of selling four we XXX points, Foods to two over customers, addition two markets

made we on side, initiatives. cost distribution the on Third, substantial progress our

markets. did to our result routes introducing of a improving year, and processes the initiative discussed improving pressure for tight our third offset Last of of we a as introduced a technologies. With distribution, However, than progress. reduce anticipated higher miles reset was market processes, and this very respect to some wage new labor our to our

a it not that technology new scanning which the roll service, only are labor scanning new as technology higher, improves time also are a operation. technology out. like and it selector, to tends further that side, experiencing. train we a we big but be receiving dynamic to scheduling dramatically tight which technology our in we've the is last new The market for misfits, piloted to improves labor year, referred both also streamlines turnover when And improves benefit On new is customer the not contemplated ready

result Lastly, continuous half distribution rollout facilities believe higher in of that complete efficiency, employee dedicated We third year. plans front, engagement. this in to about with the of overtime; been investment have and improvement improvement the on second a the continuous resources the hired our will greater by

So the level which on the toolset, platform the in footprint Shared this reduced is we reducing This and to applying great we two integration major our one cost, country. our believe enhance overall, of M&A high have improved the to Last was page, best acquire by we our Group, of for last the distributors continuous the us main processes. good a by area gives dramatically a Food chain and to few supply roadmap. readiness on on productivity Pacific to rate on that our XX% SGA agreed achieve that focus improvement we front, same used for be regional the in gives progress by and us one very the Northwest, opportunity services us, the X% other months plan. on

that And with a of our for Group, the this even we our great is over, And government is and we Combining now shutdown colleagues now second better More the FTC. join Unfortunately, outstanding and know at that the the day with platform, forces the create proposition customers as their are with we transaction have forward future Food gotten country. COP produce will company the to are quarter. every in when great time people. well re-engaged as customer impact that differentiated this partial means service to to the we platform, in conclude the part of shutdown we an estimate interaction value can in we their looking marketplace. importantly, capabilities confirms SGA over

we quarter Organic page usual X% quarter, move with year beginning at in independent the the the for highest to growth of for X.X% called quarter, January and on and with our with existing are rates persistent starting earnings for we gaining a year, quarter platform, issues with now with transitory restaurants was for issues inbound that now despite third continue Let’s the the evidence are put bill in behind with confident than headwinds to the to having X.X% the volume, service the growth this Independents continues service coming grow volumes our we at discussion strong are market prior levels. And now both believe, share sequentially above are coming with We rate also transitory back time can addressed exit X%. of well to X% higher with year. the profitably on further that third to improving, December improved to is from we with rate Penetration Independents over which and us, four. we be is customers on delivery X% call.

the hospitality you chart, quarter. Healthcare prior and As the slightly from over can improved see

are again, due now issues our was which expected of However, convert our group to X% When our some rate we a level prospects. our pipeline was combination X% of this losses, sales transitory was exit look cycle goal. around below store it due than that of at growth customers, shortfall to that longer a behind to slightly means unanticipated us, and same for service

our following we growth and line wrap of this for December with to year. I this of type healthy, very the is will X% fiscal type, quarter year CFO, case to do to our customer our we Locascio growth quarter, to with And now in all occurred sheet. balance in XXXX expect P&L flat, and the for continue roughly the flat be the targeting a exit third the we you turn customer it pipeline XXXX. large to at of down customer for Dirk with nearly lastly, fourth remember that will other, couple accelerate walk of volume did expect continue X% a exits Our for for support was over to and

good you, morning. and Thank Pietro

consistent performance Our in QX prior our business largely expectations. was with

claims is have of we unanticipated due not growth However, was the we to and costs health for been QX Adjusted to largely do expect the recur. care the X.X% quarter XXXX. up case X.X% continued quarter. diluted to that of costs. over Organic higher closer fourth from have unanticipated would EBITDA for quarter did improve to EPS without Adjusted sequentially these XX% up $X.XX some

As Pietro on month remain mentioned, for the growth with track return XXXX. had to positive we to thus and growth case fiscal of for we expectation positive case our December

the for case. row, leverage a profit operating per in our improved OpEx XXth per more grew quarter than also case as We gross

product that increase year to sales our the inflation prior mix billion, would Excluding basis. were the year-over-year in that and $X.X have adjusted experienced X.X% we XX strong Slide quarter the On was partially unanticipated on basis improvement six, deliver decline. results year. Slide earlier, with continue year-to-date billion, by We On and increase profit an case basis over above for I basis, more been our was the in increase per basis five, X.X% profit fourth XX quarter. of an point period gross and which points offset mentioned was net GAAP Gross the a XXX percent points case QX around of $X.XX results. $X on prior and costs a line

year, both basis. XX the basis higher As sales, adjusted a the XX.X% of and prior is points was both for GAAP percent on than basis. gross adjusted profit GAAP This and

freight profit driven again prior we penetration to rate as a and continuation quarter, $X.XX gross again case, freight expansion this private of strong quarter per was by year. discuss, Our the such up a per case fourth initiatives brand In optimization. was positive the

of an with depreciation year primarily as related expenses increase supply quarter fuel from of expense. benefit by a $XX Moving per a a the or case from X.X% OpEx XX result costs. higher and to higher operating expenses X.X% higher the increased costs, prior primarily increase driven over coming health increased were fuel care year $XXX chain On nearly the balance Slide in and basis, prior percentage basis operating Adjusted costs seven, on quarter to million operating of and million higher points. sales higher acquisition the adjusted a wage was expense costs of third labor XX.X% and

during vary significantly in a Our actual on and filed can quarter, basis. claims quarter-to-quarter expense healthcare the based is

discussed in to higher we We impacted by pressures, QX. costs continue to supply similar chain be and what wage fuel

such initiatives savings as are mentioned, as routing benefits. delivering administrative Pietro cost Our meaningful in shared business especially and services day-over-day

not the in fuel and higher chain. wage the supply seeing costs fully However, we're the benefits do mitigate

supply mitigate profit and wage improvement per $X.XX. our adjusted -- by growing leverage was case OpEx case a focused as of of eight, gain can number opportunities of remain We initiatives gross $X.XX than result per faster OpEx ongoing quarter increasing a believe Slide have on that expense this part very on reduce in impacts. meaningfully as We $X.XX profit operating per adjusted case On continuous operating operating we chain the increasing the gross adjusted per adjusted adjusted focus to higher case.

nine, EBITDA in up Slide the prior was X.X% year. full Now $XXX on X.X% adjusted quarter, the million for the over year, and increased fourth

adjusted approximately as change business to EBITDA and XX% to XX XX% the current increased for As prior discussed or net current non-recurring diluted The related a income net year as rate a far in the $X.XX basis Adjusted on year. to year largely million income the improved increased year. to income million basis XX% to federal full the as the lower more decreased sales, taxes consecutive income lower XX for And for a of due $XXX year-over-year EPS improved federal or is on amortization. basis. due well compared and quarter in $X.XX improved million tax decreased basis tax EBITDA tax QX $X.XX I $XXX a last than rate, percent is to the points net results. due percent for points for finally million $X.XX and XXth income the costs. Adjusted in share improved in the full or per $XX the taxes for change adjusted normalized QX benefit we quarter, as due per a This to And acquisition tax a expense quarter right, due sales as year. of higher to to X.X% business and increased XX% quarter lower more which well full results, $XXX to increased year, and income the an on share

decrease Slide year. about on I $XXX cash XXXX to flow with spoke net now to cash million Turning flow what debt compared for and the $XXX The contribution the plan, is in $XXX of during benefit call. decrease XX. million the the Operating QX million drivers this from consistent year voluntary the an are combination taxes was prior $XX increase pension and million to our Approximately, an plan. cash incremental earnings in defined of of paid

by million service approximately a of we inventory as through XXXX. $XX to the Additionally, $XX result level our to service increased vendor experienced improve million customers, to challenges levels we’ve

produce the to nearly leverage debt continues was continued billion, a end we’ve to business from year of strong at operating flow, million $XXX Our leverage the $X.X cash to end decrease improve our three at net the levels decrease end, year prior and debt and Net our the of ratio. debt times of debt the improved while year. ratio our

call. least XXXX, consistent in to XXXX, with fiscal for X% on growth QX discussed earnings adjusted XX Moving now expect we of Slide we what at EBITDA our

higher modestly in of XXXX. to to guidance. and our growth expect I’ll talk volume to case gross fuel to now OpEx We quarters quarter some costs profit and due below benefits this shifts number timing later first be

We the of X% year. expect total approximately X% case full to growth for

As independent restaurant to X% XXXX Pietro and and between exited X% expect continue of mentioned, case be X% case XXXX. customers we growth in these to we in with with growth as excess

over couple due gains. than past incur case increased we years per inflation pressure, to case not as rate respect with X% of faster seen to of case this number all given healthcare to be to the growth volatility XXXX, in appears business, rate the growth In expect to profit it’s increase to we’ve difficult flat XXXX at per For modest throughout sales the less X% part hospitality, we specific roughly expect move commodities. that in gross the gross improving the as expect it with a we and the XXXX. give other growth year. to continue wage much inflation, profit And time will and but of as however, OpEx we With

XXXX, level from we We result in expect customer independents, improved positive the chain in growth hospitality, as with again exits. not of benefits to our mix the but gross profit with per continued and case healthcare to experienced large a XXXX

and EBITDA to we result case than million our depreciation amortization growing a faster and million. of $XXX per profit gross million adjusted margins. to to to $XXX increase estimated $XXX expense of and continue expect As $XXX be Interest OpEx, is million between

$X.XX a between turn of diluted XXXX adjusted and back $XXX our We share Pietro effective million. rate finally, to and And comments to XX%. expect Q&A. per XX% before $X.XX expect to cash tax it adjusted expect CapEx million $XXX we for we to EPS go few of be now I’ll to

Thanks Dirk.

So not the and would growth expectations, good characterized I the by with penetration to while the respect year quarter brands. especially progress, was in meet summary, of independents did with private say

outlined strategy our we about progress We lastly, initiatives also OpEX platform. Investor good And the good feel very we our did on multi-channel service make at on and Day. our

least at EBITDA confident it of questions. for guidance now up for All are of our say, we is X% We’ll to open which in XXXX.

Stanley. from question of from Vincent the Instructions] Your Morgan Sinisi line first [Operator comes

Your line open. now is

very my question. Hey, terrific. morning taking folks. much Thanks Good for

side on the gross some So particularly of to wanted that expectations, look And guys puts well mix of got by of during to first internal private how how kind go you importantly, And quarter XXXX? kind you of your versus continuing any as shifts, you as we some question, change at segment in? on know just -- in as ask them ask performance. to through course and you want know factored well, the activity do particularly takes just then also then inflation kind of as the promotional label their you’ve in customer mentioned kind margin

This right, what Vinny. is, but is you’re that would there’s not puts all morning, from What expected. I think Dirk. always from I than inflation, takes ago, months say at and two Good we different least

have harder which tell. inflation margins, did behavior in I expect a on modest again some commodities, And in line largely has again, the different commodity overall continued we to some and impact with commodities expectations. obviously way it’s think behaved, the see then can in we year-over-year category the certain but an

a not we had and again, than from think what that different saw different in perspective the I what not than we and year. expected that promotional earlier such,

right. All Okay.

really to that what is So XXXX. informed

Thank ask on of Okay. a up maybe then getting follow XXXX a course we’ve a quick bunch question course just today. guidance, you. And been the that of

great So it the was expectations. guidance and certainly to see EBITDA reiteration the the of overall met

of is The question to given getting been kind reiteration like EBITDA from the one Sounds that about the of should thoughts a folks confident point. range as just are you how it. achieving of X% of at just confident kind expect I’ve or see certainly feel the opposed about something just least kind great. guys be at organic would we that this year any that goes very let’s you that, other Is

Sure. Yes.

point, this outlook. we’re play we confident outlook and the commented, But X% the we any right that in we that would differently, we’ve least If goes talked thought things accordingly. as at at Pietro growth. think do achieve out of on. the I as confident was the year we levers to X% typically would about that And order feel in update as

of All Best right. guys. Terrific. luck,

Thank you.

Heinbockel comes Guggenheim from line Your from next of Securities. question John the

line Your now open. is

Pietro, had independent of it’s couple you XXXX. months with since the part know look of numbers last case at, don’t here So you’ve if the the growth, I latter best

it, As recovery, we go an some lines more? it’s right XXX% you whether we where Where XX, we were were of geographic terms to elsewhere. back journey? know seeing you those in account, Are look Where per stop people on self-inflicted issues? are issue, from were I at that you right are

John. morning, Good

numbers, needs other of be, by test surest maybe that quite indicated the strong, our that are the exit is where a couple service which as data January say, to points. the platform also it would I So is in rate

optimizing time they’ve close expense Our journey to this back the and or we to on will more. our did and the since get is market to really about, very good than as our I into that effect rates And we into we even we is six before the we’ve And now a going causes got we this into what better as been given high platform down have that really visibility actually were that. in had the even centralization. better root fill delivery we are the embark thing goal before the think XXXX highest every just five be we years. several John, years feel are ago where rates, infill It’s now platform than

the So we And that’s mentioned numbers. growth see good your I’ve which about we from question, increasing of part in of confidence time -- feel is, are part and can year, on now I and other period it indicative other how weren’t customers, it its indication the think growth as is we of of for some the you existing of our which the last getting again customers. level the

And initiatives. those you supply about then of talked think you if some about chain, the

You percentage that are just on of of it the you number possible in so put at realization, of light think XXXX? through day. comes percentage in or you the about accelerating savings analyst of pressure through comes greater some the When driver XXXX? that a back is potential wages, And a in on the how that much

Yes.

for the on and example the initiatives but the outlined that I said, some also the the that the wage -- may the we environment initiatives impact is entire offset remember wage be gave with you one receiving so, actually we itself as it's when of delivering would that of part. summer, So starting to Dirk But manifested throughout And on, are higher we optimization thought environment. we’ve what talked we base. operating the primarily wages, I’ll you let quantification higher operating over as answer added course higher

to So it's and doing we're looking what significant been very for ways that. now is mitigate

forever, this would very The be going I we're tight thing not labor right. is market other to in say

net normal from that savings it's and to I and we think about We've kind so improve we to back freight. a And bit begin of can year. new talked a last there, get like reached

the with I would think numbers what realization the are facing. and good we morning -- the initiatives is, haven't we -- specific Day largely consistent value fuel is john, we about. add talked has which that about have some at wage piece contemplated offsetting deploying Investor and that And But last we've I the on pace talked is of the year that labor and what the impact pressures would the big to

you. Thank Okay.

Karen next question Holthouse Your Sachs. comes of from Goldman line the from

now is line Your open.

question. taking Hi. Thanks for the

chain a some have Are of trends some year. Some Are there business that some going that next -- dynamics be in talked about actual a bit a the into trying peers contrasted even to customers, in to be little chain exits, apples-to-apples bit little there bit weighing better material? for customer relative talked flat being Just your about your some growth customer to of that is terms in of still -- there? things business are think better which peers segments have down? trends in as would the from guidance all exposure not and just little about some the other offsets

Good as This what as is space, What say of is, differences you lack Sure. I Karen. or some across growth. growth I that concept-specific is think far would see Dirk. morning,

see the small change, extent customers, are things across and really or we behind that And largely then we to and chain much we then I the it's existing us growing, customers, continue going the believe are could exits not. some and but look of are for of large what to to. is really, profitable help when relate point, And what that again than believe you see, flat and behaviors good to partners the what like are if the balance that optimize so on-board some customers perspective, diversity always that just really this being. you roughly on-boarded striking that That's that continue across of to folks. more some down that's those those penetration we've -- we larger here time our think at some exited. continue From we And we've we'll also have talked, some even believe there, our to some that are are

Great. Thank you.

question comes the Ivankoe JPMorgan. line of next Your from from John

line is Your now open.

if may. I questions Two

and a obvious an First one. bit of maybe little

a The growth which in in strong independent EBITDA wasn't first is January, best restaurant words in for of below result, the the considering go XXXX of might should of be again, the why EBITDA in quarter that very strong missing a independent kind could like through X% you quarter, pieces I growth trends quarter considering first particularly other we a current considering and I'm trends expect afraid case type number "easy in restaurants, comparison" month, your a something? and

couple Dirk. Good What This morning. say impact year was an of weather. things. John. Hi, a is last I would around is One is

first in to And quarter, early still it's pretty early so tell. the

we’ve know year, significant last weather we So had throughout some quarter we early had the a some year. this

quarter. toward one hard of end the you gauge that more is So really until get to the kind of

is, gross look and throughout different so The items and softer that item. are when other different QX. for company year at or the -- little you that’s come around some just size, the the at year, you of a P&L and sometimes, benefits thus a times gains particular throughout thing the really operating things have what outlook hit points throughout that not several is There our large it it’s big the in profit expenses and our

first is of in between Or quarter fourth and slowing sequential hospitality and similar? that healthcare XXXX? you XXXX the expecting are quarter a of And

continued would expect at point. We acceleration this No.

sorry. Okay. Perfect. All ahead, right. Go

Go ahead. Fine.

Okay. didn’t No. to you want I cut off.

fourth deceleration continued I expect we quarter that's So healthcare and hospitality levels? from mean in the correct?

so growing very units large that have they’re Yes. have think we right, of is is, and at sites, looked with we customers what that facilities was this customers those large happened, That’s -- actual for been number right. with what those those of you if the those have at and X%, us, Because are we us existing a customers a what been units right. did of part and year,

pipeline leaky and that’s bucket solid top closed, then a The that’s issue, service from that's being right, foundation. that. of positive. on healthy the So it's the of And so kind is

why -- to So sequentially that’s that believe continue John? help, things it we that Does improve.

guess And be Thank of step I you in a employees at existing how what a there'll so it does. words, from normalize expectation I lot me step for expectation restaurants up is then a independent much. your that new question, terms the normal heard, new and be lot strong in in market. a in for other Yes, wage least restaurants it to costs, consistent terms strong the asked the context labor the that that people the the very driven expectation is that then there'd I a for with strength And segment in in continues up of, would industry? growth overall this independent second including of believe of a employees, there. by fact of be

if distribution happen? that without use of possibly to are you to actually other your and to to have wages one decrease with in increase of the to expecting use the I you normalization hours people people that you number possible it’s So wonder allow or that in warehousing actual

balance, unemployment low market a that's income rates, market a there's fuel, too tight low to contribute you’re right, and too that's Look, And labor a labor end high between discretionary user right, demand. soft.

happened side not we’re labor is anyhow looking for kind think same the at, the of are kind for labor which the on looking I restaurants exactly us the of the what input as looking Those markets selectors for, certain tight physical last right, A skilled particularly course we're requirements, for. are have became attributes the which over commercial license drivers, Class year. certain have of so

Okay. Thank you.

from Your Barclays. of Karen comes the next line question Short from

now is line open. Your

Thanks. Hi.

EPS level your kind end at of the as on your guidance; I guess much your looking interest question, D&A, lower model EBITDA earnings on taxes, I and getting range. a I’m the midpoint versus the of to using guidance your Just kind closer growth X% guidance of

give you be color a wondering us of range? delta end would little could just on the if what So get to the the higher to

This Karen, good is Dirk. So, morning.

separately. I you help Melissa could or think maybe without Scott

share on the that that or us falls there's I that and count think X% the talked the like again that within firmly within we've But outlook about then solidly is for range. ultimately, numbers difference. range. number a get our something And perhaps, ultimately, the non-EBITDA

then to while And for switch gave of fact guess was limbo EBITDA just you how very if transaction? wondering how deal. I announced is ended I still XXXX, obviously they little in give could SGA consistent I sure an you think kind of us should we the bit the just is given been bit. of it. an fiscal you EBITDA on positive gears they’ve us a make the to update want a when just But and kind And to or Okay. with I just contribution want calendar a mean, for little little I about that that your outlook that obviously know

Yes.

you we respect know, private with to company think that probably have have able no SGAs Karen we're this disclose not just obligation to that to performance, and and a disclose respect point. they I anything anything it’s at to

Okay. Thanks.

line Frommer Credit question Your the comes Suisse. next of Judah from from

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to with of on getting you're shutdown question. deal. them Maybe quick taking a give any closes? have Is do this there FTC first just color SGA wait or can on just conversations follow in we you're until terms for up the key the questions having Thanks Hi. from before us the the thing you

Yes.

would latter the we it's think rigorous -- your be a to wait. answered own very you question, have I part -- It process.

inappropriate don't through stage, you it. think if for through go can know it what process just -- at this tell rigorous you literally very a us comment to once It's that it would be especially and go I you think I reengaged. we've I

bit a you And growth. does you expectations sound in miss had a guidance. of than QX EBITDA Is back to be then if a you X% enough. reason came Fair the a there able to bit maybe relative like to QX the the EBITDA grow than anticipated, internal on better you little anticipated? Okay. It wouldn't lower that little

-- think morning, Good Judah. I

in unusually value costs high really the to of what claims where higher that's will item will few quarters one it -- have and about is talked you these is QX, years, around and So volume the that come harder like predominant every on happens predict. claims and are of they seems we've healthcare

And really what quarter-to-quarter. the not higher. it's again, happens healthcare drove claims that's So typically

I point modest sequential, quarter, profit But throughout year, when remember overall, a drivers remain ability again shift was is, as throughout that doesn't lot shift closer thinking it's very you're core certain of a to have Again the it just XXX year-over-year in gains, so the incur you timing of to basis little of the at gross call if we and to when think we other whole feel put you the that the a look intact. growth. The the costs our expense very, bit X.X% and so do and in that QX for you really just just operating in have when the thing business this aside to we confident XXX impact. we're particular take year X% making. QX, just

Thanks. Okay.

Your comes line question next from Capital. BMO from the Bania Kelly of

line now is Your open.

It difference XXXX. were lower I on couple between a a comments question, one just questions couple ago. your in guess of I is morning. of big than prices, maybe now XX% they seems a just about are think like which diesel November Good Hi. months

you just would was XXXX. But the of XXXX for in with I that half second So respect and can and plan thinking costs? diesel that how flows fuel maybe what's your to through a remind maybe for us be positive

morning. Sure. Good

talked fuel think or year So, roughly -- good before, locking typically we've our and out. are we about lot of portion two-thirds of as a a our more I

a were fuel do prices higher, higher XXXX at portion we locked have in good when And so rates. of

locked there, some would basis. neutral benefit portions in, stay year-over-year or a generate not So would, for to potentially closer assuming they that we the more are

of our as the commitments combination those market of is year. a a we've because as still built into commitments, our what outlook. little But So rate drive bit well does for higher outlook it a

Okay. That's the this replenishment just year. that of terms implemented in program centralized helpful. And was

you that's expect maybe update program that a color on as just going. manner? that in any from centralized buying And on complete? Just the the is savings that maybe you an have organization how Is longer-term more do

Yes.

a It's very it's essentially solid So complete. platform.

the continuing alluded category-by-category. The are flow that market-by-market through at to to, to just looking optimize, beginning we're Now P&L. or Kelly, benefits you

them respond buying at for it this truckload over the more think freight optimization You time line, opportunistic the is gross I optimized, smaller into to we are a fact were put which that and looking now whether I benefits that is were the produce things to platform turn being primarily think to the better in those it's looking around we platform in DCs, may speed profit better with the plate, think and I we place. And is center one tailwind all that platform of freight enable us. remember a operating headwinds more indicative was of -- the grocery, were was of called and able before we've the buying that to for those that out the

you. Thank

comes question the Kelly Wells from line of Fargo. next Edward from Your

Your open. line is now

just ask color obviously Good so Can Yes. the case around during quarter? you better. to Hi, then the QX to additional quarter? bit cadence to so started growth. December how during was more I morning. business just a has guys. far? the one on the can I But maybe I'm extent curious give as why wanted And mean be seem color the first little that more to choppy follow-up on you

Sure. Good It's I'll take Dirk. those. Ed. morning,

commented, saw at growth talked competitors we soft case had was closer in So in in is QX, our then [ph] -- is in November October XX as and we month had saw I one flat than that. we a December what -- we about to least, relatively And similarly choppy. growth period. what It and for think case the pretty of

not come in surprise. really for thing October overall so call, show that since what more that that I'll was but saw main caused to anomaly it has coming, that, the XXXX, big not think I a And the quarter Pietro's to flat roughly or hospitality with to right outlook. continue that all January healthcare X% independents have back roughly and point line is gain with for in case growth X% was really we -- around finished other in and and so started So more we improvement, over really

just take growth that close year? obviously for be total to QX. to of kind if the X% hard X% to that weather. So, predict I back you here the potential a is case provided you can step QX in mean, But for there on the we range it's

Yes. Yes.

depending just really it's fall the there like. think and on the I where you weather and within

last about update give for accretion? on planning you're you one Does a Could XXXX thing SGA. the all just here? you, on help And thoughts added Has follow thinking around impact Okay. us magnitude -- the up also any at delay the how synergies? started to of

Sure.

we point, this the have update at an amount of synergies. think on I don't So

we've we fact, In that our the post-close. ability that will be feel at very to synergies continue But to above levels do discussed. deliver good about or

close, do I there the planning. are about, used, as think the we has Pietro to incremental have -- more talked time from

be a will the the faster begin should we feel which system the number of we which things mean and synergies of get So gate acceleration, out to after close. conversions are enabled able until some can't although by

and to So level we what at some ready areas execute little would the means expect it can we'll synergies. higher expediting is we In other just areas, more as to a potentially expect opposed a where bit. be accelerate

Thank Okay. you.

line question Bank from Sullivan next from the of of America Your Lynch. Merrill Marisa comes

open. now is line Your

taking for question. Thanks morning. my Good

you actually quantify inflation pass ability on wanted have ask you seen customers Can our these of it at any to what And your the amount inflation? was X.X% mix to on to cost challenges Just in inflation. levels?

Good morning.

direction in grocery we've basic see when things of depending and And different a I've hurt before, period points times about the which a it's that is was help as an we about those, or impacts In when the you different either will maximizing you in execution gone see very some was as that, basis I trying seen to see of like X. or think in you mitigate about so X.X% where categories you inflation, we of through disposables, way a it's inflation number that's going there out But X%, through what modest mitigate and on losses down, is, work categories, of -- the have fact. time, ways. our your for there. gains of nonfood talked work no as up the XX what volatility mix way perspective. so it's the commodity focus on from and

improvement as a any Thank you. quantifying just And little can on When to us routing, expect see in the Got we through? as timing should the on that remaining rollout more day-over-day you you'd roll to you. about follow give up, help starting of the think this out? can benefits then just And bit the XXXX? color markets us then a give of to flow the type you on what you

Sure.

to continuing the the our the of So the continue that the year really comes year latter we And end markets more of more through to and are deploy throughout this from bulk accordingly. by part sequentially by to of and value year, markets. this

initiatives, it ongoing these. chain the also sales. just savings, with experience supply drives strong partnership as supply and a it the between so specific has has amount So, value portfolio and the And exciting about we we it's chain, day-over-day a is, haven't but deploy a routing the about because sort talked continues thing and better customer for of like that, value of begun it's of, but rest

experience. the customer in on-time provides better delivery for better we and be so And our can accuracy to continue

Got you. Thanks much. so

line from Ajay Your question Group. of Research the comes from Pivotal next Jain

open. is Your line now

morning. Hi. Yes. Good

I think EBITDA growth are the Like you now, would both XXXX the EBITDA commentary relative if to ramp first on half how I'm you of acquisition, in excluding and additional some first the wondering X% in give fiscal color quarter Thanks. how growth? just year? to impact your can expectations I the case the back-end-loaded up? you and growth any outlook, gave outlook but SGA on right be was wondering what relation split the the the and case in half back So of expect

Sure. Good morning.

the the are not the for of in balance quarters impact modest outside QX, that different. all So

ramp up as a overall EBITDA throughout year. the the significant in have we So plan, don't we go

and other of outside back would QX. -- consistent I earlier, to color perspective, is the an that we have year. only as expect relatively EBITDA to healthcare we as the accelerate the we go about that's would hospitality continue throughout to as specifically, But talked again, So

follow-up. Okay. have a And I

all were benefits QX. mentioned headwinds and in wage fuel, expenses, on as So

offsets are that wondering any for of growth, to the example. on like any chain you're So and or relief supply productivity at assuming if if looking I'm items mainly just other those you initiatives expense

on to any percentage off. So relief to benefits soon, expenses healthcare or I'm year? assuming of in But overall this roll kind in growth the some anytime going just of starts in wondering wages maybe you're see what recent expecting I'm increase you're not health

about a and you’ve pointed So, mitigate you out a identify think I wage stay to in of that in continue to we really pressure, locks that fuel onward, a latter, favorable continues inflation pressure as ago as some is pointed there first the -- supply other continuing year. -- from will higher for intact. From the Fuel opportunities the to those be is had chain. pay Obviously, challenge. year rates wage higher as half

finally is, from be in a continue to from of continue a it to some have what that the And market view really although will don't healthcare QX, closer that benefit So being headwind, we purchase then will to expect was. portion again. we point

that I've to a by new see As don't be high to quarter norm stretch you we but every like that, any imagination. is we the mentioned, often, have so of what tend expect

Okay. Thank you.

next comes Wolf Loop Andrew line from question from the Markets. of Capital Your

now is line open. Your

of executed broader go-to-market? context, it's of think how selling do set a what you in that flat? generating Thanks become capable up do up in way the and you see sort of XXXX. your quarter growth for down with of And or more or or this there any team-based I cost? territory that ask Is operating manager about variable the penetration good you've expectation wanted morning. leverage the juncture sort expectations year, at a you your the ordering, to mobile are and for still mobile for pure Is

size Elements completed investment optimization element last business last of XXXX. year we is, the kind managers was And with of with with think to specialists start add based even happy in well where I level, with last have the managers that variable to good that always the higher in XXXX the rate we're think, other selling just who to elements variable salesforce a over as new approach at of part new to customers. the The of as looking drive to a quality team-based in the there's more at and very upgrade of the entire of territory course an growth in selling are question, market. XXXX, the sellers the of addition and component the your grow in we we’re fixed nature, or territory like specialists So the of the like opportunity the nature. manager it's more done team

XX%, we’re I of terms think e-commerce, right. the closer to In

have customers or where we best So and leveraging that experience has for But the we from support you the markets platform, at best the territory growth service threshold best look to the e-commerce because and where level continue continue territory managers, obviously certain to as best see that slowed provide growth. below we’ve that’s and coaching our retention managers we gotten have get to are higher. to the the them comes higher

Okay. Thank you.

And Dirk, just a is if I could it guys sheet statement quick but any balance or all? to thing item? a just -- change. accounting there’s to think, secondly, Are of you income one adopting of Just that going a first thing I you kind there on more is lease impact be technical, income or

you in operating it’s financials as issue, But won’t balance that the go it’s balance up of are Yes, liability. on in more your sheet show we more P&L you disclosures XX-K. QX. until the leases point, and really of be so will year our a have really adopting a some that. to it And sheet less growth, There will end see

you. Thank Okay.

further it you. over at There to are this questions no back Presenters, turn time. I

and continued do day. you everyone as make today. opportunity, I Okay. Well, at the to associates our to Thank Appreciate to thank us for have customers all commitment for you good today take want helping their a questions. your it. great always XX,XXX the for our do Foods joining U.S. focus I thank

for conference you today’s Thank concludes call. This joining. all

You may disconnect. now