01—Abstract
Summary
Summary of the 10-K filed February 15, 2024. Cited figures are marked; the original filing is the authoritative source.
US Foods Holding Corp. (NYSE: USFD) reported net sales of $35,597 milliona for fiscal year 2023, up $1,540 million, or 4.5%, from $34,057 million in fiscal 2022, driven by case volume growth.
Total case volume increased 4.4%, with independent restaurant case volume up 6.9%, healthcare up 7.2% and hospitality up 8.9%, while chain volume decreased 2.1%. Gross profit rose 11.9% to $6,148 millionb (17.3% of net sales, versus 16.1% in 2022), and operating income more than doubled to $1,017 million from $594 million. Net income was $506 million, compared with $265 million in fiscal 2022, and diluted EPS was $2.02 versus $1.01.
Adjusted EBITDA increased $249 millionc, or 19.0%, to $1,559 million, with Adjusted EBITDA margin of 4.4% of net sales. Cash flow from operating activities rose to $1,140 million and Free Cash Flow reached $831 million, compared with $500 million in fiscal 2022. The company repurchased 7,396,224 shares for approximately $294 million during the year, leaving about $192 million remaining under its $500 million authorization.
Total debt was $4,674 milliond at year end, and the company reported approximately $2.0 billion in cash and available liquidity. Investors should note the company's indebtedness of $4.7 billion, of which approximately 30% bears floating rates, and its dependence on fuel, labor and customer concentration risks, including GPOs that accounted for about 23% of net sales. The company made two 2023 acquisitions, Renzi Foodservice ($142 million purchase price) and Saladino's ($56 million), and does not pay dividends on its common stock.
02—Key points
Key Highlights
- Net sales rose 4.5% to $35,597 million, driven by a 4.4% increase in total case volume and a 6.9% increase in independent restaurant case volume.
- Gross profit increased 11.9% to $6,148 million, lifting gross margin to 17.3% of net sales from 16.1% in fiscal 2022.
- Operating income was $1,017 million, or 2.9% of net sales, compared with $594 million (1.7%) in fiscal 2022; net income was $506 million versus $265 million.
- Adjusted EBITDA increased 19.0% to $1,559 million; Free Cash Flow was $831 million versus $500 million in fiscal 2022.
- The company repurchased 7,396,224 shares for about $294 million under its Share Repurchase Program, with approximately $192 million remaining authorized at December 30, 2023.
- Total indebtedness was $4.7 billion at December 30, 2023, with approximately 30% of debt at variable rates; a hypothetical 1% rate change would move annual floating-rate interest expense by about $16 million.
- Acquired Renzi Foodservice (New York, $142 million purchase price) and Saladino's Foodservice (California, $56 million) in fiscal 2023.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, US Foods Holding kept $0.01.
- Revenue$35.60B100.0%
- Cost of revenue−$29.45B82.7%
- Gross profit$6.15B17.3%
- Operating costs−$5.13B14.4%
- Operating income$1.02B2.9%
- Interest, other & tax−$511.0M1.4%
- Net income$506.0M1.4%
Where FY2023 revenue went
$35.60B- Cost of revenue: $29.45B, 83% of revenue
- SG&A: $5.12B, 14% of revenue
- Net income: $506.0M, 1.4% of revenue
- Interest, other & tax: $511.0M, 1.4% of revenue
Kept 1.4% as net incomeNet income $506.0M · 1.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 15, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $35.60B$34.06B | +4.5% |
| Cost of Revenue | $29.45B$28.57B | +3.1% |
| Gross Profit | $6.15B$5.49B | +11.9% |
| SG&A Expenses | $5.12B$4.89B | +4.7% |
| Operating Expenses | $5.13B$4.90B | +4.8% |
| Operating Income | $1.02B$594.00M | +71.2% |
| Interest Expense | $324.00M$213.00M | +52.1% |
| Net Income | $506.00M$265.00M | +90.9% |
| EPS (Basic) | $2.09$1.02 | +104.9% |
| EPS (Diluted) | $2.02$1.01 | +100.0% |
| Shares Outstanding (Basic) | 239.00M224.00M | +6.7% |
| Shares Outstanding (Diluted) | 250.00M226.00M | +10.6% |
05—Questions
Frequently Asked Questions
How did US Foods perform financially in fiscal 2023?
Net sales grew 4.5% to $35,597 million, gross profit rose 11.9% to $6,148 million, and net income increased to $506 million from $265 million. Adjusted EBITDA grew 19.0% to $1,559 million, or 4.4% of net sales.
What drove the increase in sales and profitability?
The filing attributes sales growth primarily to case volume gains, including a 6.9% increase in independent restaurant case volume, a 7.2% increase in healthcare volume and an 8.9% increase in hospitality volume. Gross margin improved due to higher case volume, cost of goods sold optimization, increased freight income and optimized pricing, and a lower LIFO expense of $1 million gain versus a $147 million expense in fiscal 2022.
How strong is the company's balance sheet and liquidity?
Total debt was $4,674 million at December 30, 2023, and the company had approximately $2.0 billion in cash and available liquidity, including $1,733 million of remaining capacity under its ABL Facility. Management believes operating cash flow and borrowing capacity will meet obligations for at least the next 12 months.
What are the main risks highlighted for investors?
Key risks include sensitivity to economic conditions and consumer spending on food away from home, low-margin economics exposed to product cost inflation and deflation, intense competition, dependence on suppliers, and labor relations, with about 6,300 associates in union locals. The company also cites its $4.7 billion of indebtedness, roughly 30% of which is floating-rate, and fuel price volatility, with fiscal 2023 outbound delivery fuel costs of about $191 million.
Does US Foods pay dividends or return capital to shareholders?
The company has not paid dividends on its common stock since trading began publicly in 2016 and has no plans to do so in the foreseeable future. It did repurchase common stock, buying 7,396,224 shares for about $294 million in fiscal 2023 under its $500 million authorization.
06—Continue