Segment Information

9 Months Ended

Apr. 01, 2023

Segment Reporting [Abstract]

Segment Information

14. Segment Information

Based on the Company’s organization structure and how the Company’s management reviews operating results and makes decisions about resource allocation, the Company 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 segment distributes candy, snacks, beverages, cigarettes, other tobacco products, food and foodservice related products, and other items to convenience stores across North America. 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 Adjusted EBITDA. In the first quarter of fiscal 2023, the Company changed its measure of segment profit to Adjusted EBITDA as this is the metric reported to the chief operating decision maker ("CODM") for purposes of reviewing operating results and making decisions about allocating resources. In addition, targets based on Adjusted EBITDA are among the measures used to evaluate management’s performance for purposes of determining their compensation under the Company’s incentive plans. Adjusted EBITDA is defined as net income before interest expense, interest income, income taxes, depreciation, amortization and excludes certain items that the Company does not consider part of its segments' core operating results, including stock-based compensation expense, changes in the LIFO reserve, acquisition, integration and reorganization expenses, and gains and losses related to fuel derivatives.

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

The presentation and amounts for the three and nine months ended April 2, 2022 have been restated to reflect the change to the measure of segment profit to Adjusted EBITDA described above.

(In millions)	Foodservice		Vistar		Convenience		Corporate & All Other		Eliminations			Consolidated
For the three months ended April 1, 2023
Net external sales	$	6,941.2	$	1,114.0	$	5,681.3	$	34.8	$	—		$	13,771.3
Inter-segment sales		5.0		0.8		—		149.3		(155.1	)		—
Total sales		6,946.2		1,114.8		5,681.3		184.1		(155.1	)		13,771.3
Depreciation and amortization		70.9		10.4		36.7		6.8		—			124.8
Capital expenditures		60.6		4.2		8.1		6.2		—			79.1
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

(In millions)	Foodservice		Vistar		Convenience		Corporate & All Other		Eliminations			Consolidated
For the nine months ended April 1, 2023
Net external sales	$	21,157.3	$	3,321.6	$	17,832.3	$	78.3	$	—		$	42,389.5
Inter-segment sales		15.5		2.2	$	—		412.1		(429.8	)		—
Total sales		21,172.8		3,323.8		17,832.3		490.4		(429.8	)		42,389.5
Depreciation and amortization		208.7		31.7		110.0		18.8		—			369.2
Capital expenditures		137.2		8.7		21.6		9.7		—			177.2
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

Adjusted 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 1, 2023			April 2, 2022			April 1, 2023			April 2, 2022
Foodservice Adjusted EBITDA	$	220.0		$	180.1		$	670.3		$	517.7
Vistar Adjusted EBITDA		73.1			48.0		$	239.7			127.9
Convenience Adjusted EBITDA		73.2			61.9		$	248.1			169.8
Corporate & All Other Adjusted EBITDA		(51.6	)		(52.1	)	$	(179.9	)		(152.7	)
Depreciation and amortization		(124.8	)		(124.1	)	$	(369.2	)		(339.3	)
Interest expense		(55.9	)		(45.9	)	$	(162.0	)		(135.1	)
Change in LIFO reserve		(16.5	)		(21.1	)	$	(68.3	)		(55.3	)
Stock-based compensation expense		(10.2	)		(10.6	)	$	(33.1	)		(34.9	)
(Loss) Gain on fuel derivatives		(2.7	)		10.5		$	(5.2	)		10.4
Acquisition, integration & reorganization expenses		(1.4	)		(9.7	)	$	(7.2	)		(47.0	)
Other adjustments (1)		8.6			(3.0	)	$	4.7			(10.6	)
Income before taxes	$	111.8		$	34.0		$	337.9		$	50.9

(1) Other adjustments include a $10.8 million gain on the sale of a warehouse facility for the three and nine months ended April 1, 2023, as well as asset impairments, amounts related to favorable and unfavorable leases, foreign currency transaction gains and losses, and franchise tax expense.

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

(In millions)	As of April 1, 2023		As of July 2, 2022
Foodservice	$	6,400.0	$	6,455.3
Vistar		1,225.9		1,133.7
Convenience		4,064.8		4,411.6
Corporate & All Other		498.8		377.4
Total assets	$	12,189.5	$	12,378.0