Segment Information

9 Months Ended

Apr. 02, 2022

Segment Reporting [Abstract]

Segment Information

14. Segment Information

In the second quarter of fiscal 2022, the Company changed its operating segments to reflect the manner in which the chief operating decision maker (“CODM”) manages the business. Based on the Company’s organization structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company now has three reportable segments: Foodservice, Vistar, and Convenience.

The Foodservice segment distributes a broad line of national brands, customer brands, and our proprietary-branded food and food-related products, or “Performance Brands.” Foodservice sells to independent and multi-unit “Chain” restaurants and other institutions such as schools, healthcare facilities, business and industry locations, and retail establishments. Our Chain customers are multi-unit restaurants with five or more locations and include some of the most recognizable family and casual dining restaurant chains. Our Vistar segment specializes in distributing candy, snacks, beverages, and other items nationally to vending, office coffee service, theater, retail, hospitality, and other channels. Our Convenience channel distributes candy, snacks, beverages, cigarettes, other tobacco products, food and foodservice products, and other items to convenience stores across the United States and Canada. Intersegment sales represent sales between the segments, which are eliminated in consolidation. Management evaluates the performance of each operating segment based on various operating and financial metrics, including total sales and EBITDA.

Corporate & All Other is comprised of corporate overhead and certain operations that are not considered separate reportable segments based on their size. This includes the operations of the Company’s internal logistics unit responsible for managing and allocating inbound logistics revenue and expense. Beginning in the second quarter of fiscal 2022, this also includes the operating results from certain recent immaterial acquisitions. Corporate & All Other may also include capital expenditures for certain information technology projects that are transferred to the segments once placed in service.

The presentation and amounts for the three and nine months ended March 27, 2021 and as of July 3, 2021 have been restated to reflect the segment changes described above.

(In millions)	Foodservice		Vistar		Convenience		Corporate & All Other			Eliminations			Consolidated
For the three months ended April 2, 2022
Net external sales	$	6,600.4	$	891.6	$	5,574.6	$	12.4		$	—		$	13,079.0
Inter-segment sales		4.5		0.6		—		122.3			(127.4	)		—
Total sales		6,604.9		892.2		5,574.6		134.7			(127.4	)		13,079.0
Depreciation and amortization		67.3		13.3		37.3		6.2			—			124.1
Capital expenditures		49.2		9.1		10.3		3.7			—			72.3
For the three months ended March 27, 2021
Net external sales	$	5,184.2	$	589.9	$	1,418.9	$	9.5		$	—		$	7,202.5
Inter-segment sales		2.3		0.4		-		90.5			(93.2	)		—
Total sales		5,186.5		590.3		1,418.9		100.0			(93.2	)		7,202.5
Depreciation and amortization		57.9		12.5		3.6		6.8			—			80.8
Capital expenditures		29.9		6.2		2.1		(2.3	)		—			35.9

(In millions)	Foodservice		Vistar		Convenience		Corporate & All Other		Eliminations			Consolidated
For the nine months ended April 2, 2022
Net external sales	$	19,168.1	$	2,644.3	$	14,455.8	$	35.9	$	—		$	36,304.1
Inter-segment sales		13.2		1.7		-		340.8		(355.7	)		—
Total sales		19,181.3		2,646.0		14,455.8		376.7		(355.7	)		36,304.1
Depreciation and amortization		192.3		39.5		89.0		18.5		—			339.3
Capital expenditures		95.9		14.4		20.3		10.2		—			140.8
For the nine months ended March 27, 2021
Net external sales	$	15,104.6	$	1,737.5	$	4,228.4	$	24.0	$	—		$	21,094.5
Inter-segment sales		5.7		1.6		-		275.1		(282.4	)		—
Total sales		15,110.3		1,739.1		4,228.4		299.1		(282.4	)		21,094.5
Depreciation and amortization		182.4		33.8		7.8		23.1		—			247.1
Capital expenditures		49.9		41.3		21.5		6.2		—			118.9

EBITDA for each reportable segment and Corporate & All Other is presented below along with a reconciliation to consolidated income before taxes.

	Three Months Ended						Nine Months Ended
	April 2, 2022			March 27, 2021			April 2, 2022			March 27, 2021
Foodservice EBITDA	$	169.6		$	138.3		$	487.5		$	449.8
Vistar EBITDA		48.0			14.9			126.9			42.0
Convenience EBITDA		42.7			2.0			119.4			25.0
Corporate & All Other EBITDA		(56.3	)		(49.4	)		(208.5	)		(144.9	)
Depreciation and amortization		(124.1	)		(80.8	)		(339.3	)		(247.1	)
Interest expense		(45.9	)		(37.1	)		(135.1	)		(114.0	)
Income before taxes	$	34.0		$	(12.1	)	$	50.9		$	10.8

Total assets by reportable segment, excluding intercompany receivables between segments, are as follows:

(In millions)	As of April 2, 2022		As of July 3, 2021
Foodservice	$	6,365.5	$	5,791.7
Vistar		1,086.7		1,049.7
Convenience		4,177.2		681.9
Corporate & All Other		350.2		322.4
Total assets	$	11,979.6	$	7,845.7

The following table presents the changes in the carrying amount of goodwill for each reportable segment:

(In millions)	Foodservice		Vistar		Convenience		Other		Total
Balance as of July 3, 2021		1,199.4		93.9		20.9		40.5		1,354.7
Acquisitions—current year		69.5		-		867.3		-		936.8
Balance as of April 2, 2022	$	1,268.9	$	93.9	$	888.2	$	40.5	$	2,291.5

The sales mix for the Company’s principal product and service categories is as follows:

	Three Months Ended				Nine Months Ended
(In millions)	April 2, 2022		March 27, 2021		April 2, 2022		March 27, 2021
Cigarettes	$	3,522.2	$	1,003.8	$	9,361.0	$	3,039.0
Center of the plate		2,671.6		2,021.3		7,947.9		5,829.7
Canned and dry groceries		1,148.5		776.4		3,260.4		2,292.1
Frozen foods		1,082.0		768.7		2,922.0		2,238.7
Refrigerated and dairy products		1,065.9		731.8		2,916.1		2,151.3
Candy/snack/theater and concession		1,001.8		366.5		2,673.6		1,104.4
Paper products and cleaning supplies		662.0		520.2		1,907.9		1,521.1
Other tobacco products		702.6		179.5		1,773.7		503.0
Beverage		619.1		352.3		1,751.0		1,039.0
Other miscellaneous goods and services		346.0		292.4		1,037.1		782.1
Produce		257.3		189.6		753.4		594.1
Total	$	13,079.0	$	7,202.5	$	36,304.1	$	21,094.5

Cigarette sales represented 26.9% and 25.8% of net sales for the three and nine months ended April 2, 2022 compared to 13.9% and 14.4% for the three and nine months ended March 27, 2021, respectively. The Company’s significant suppliers include Altria Group, Inc. (parent company of Philip Morris USA, Inc.) and R.J. Reynolds Tobacco Company, which, in the aggregate, represents approximately 20.3% of products purchased for the nine months ended April 2, 2022. Although cigarettes represent a significant portion of the Company’s total net sales and cost of goods sold, the majority of the Company's gross profit is generated from the sales of food and food-related products.