What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-02-25 compared with 2024-02-27 · 232 added, 207 removed, 767 unchanged (36% of the section changed)

9 unchanged sentences

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Operations and Comprehensive Income

Consolidated Statements of Changes in Stockholders’ Equity

7 unchanged sentences

We have audited the accompanying consolidated balance sheets of The Chefs’ Warehouse, Inc.

(the “Company”) as of December 29, 2023 and December 30, 2022, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three fiscal years in the period ended December 29, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

(the “Company”) as of December 27, 2024 and December 29, 2023, the related consolidated statements of operations and comprehensive income, stockholders’ equity, and cash flows for each of the three fiscal years in the period ended December 27, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 27, 2024 and December 29, 2023, and the results of its operations and its cash flows for each of the three fiscal years in the period ended December 27, 2024 , in conformity with accounting principles generally accepted in the United States of America.

14 unchanged sentences

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition

Revenue Transactions

As described in Note 2 to the consolidated financial statements, the Company recognizes revenue from product sales at the point at which control of each product is transferred to the customer.

The Company’s total net sales were $3.8 billion for the fiscal year ended December 27, 2024.

We identified the accuracy and existence of revenue transactions as a critical audit matter.

The principal consideration for our determination was the significant audit effort in performing procedures related to the accuracy and existence of revenue transactions given the significance of net sales and the large volume of transactions.

We identified the auditing of the accuracy and existence of revenue transactions as a critical audit matter.

Auditing the accuracy and existence of revenue was especially challenging due to the significant audit effort in performing procedures related to the accuracy and existence of revenue transactions given the significance of net sales and the large volume of transactions.

The primary procedures we performed to address this critical audit matter included:

• Testing the operating effectiveness of controls, where applicable, relating to accuracy and existence of revenue transactions.

• Evaluating the accuracy and existence of revenue transactions, on a sample basis, by obtaining and inspecting invoices, customer purchase orders, shipping documents, and cash receipts from customers, where applicable.

• Evaluating the accuracy and existence of revenue transactions, on a sample basis, by obtaining and inspecting invoices, shipping documents, and cash receipts from customers, where applicable.

• Recalculating sales prices on a sample basis, where applicable, based on the terms and conditions of underlying signed contracts.

9 unchanged sentences

Cash and cash equivalents $ 114,655 $ 49,878

Accounts receivable, net of allowance of $ 21,423 in 2023 and $ 20,733 in 2022

Accounts receivable, net of allowances ($ 22,341 in 2024 and $ 21,423 in 2023)

366,311 334,015

32 unchanged sentences

THE CHEFS’ WAREHOUSE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands, except share and per share amounts)

9 unchanged sentences

Interest expense 48,675 45,474 43,849

Income (loss) before income taxes 55,469 41,889 ( 6,776 )

Provision for income tax expense (benefit) 20,879 14,139 ( 1,853 )

Net income (loss) $ 34,590 $ 27,750 $ ( 4,923 )

Other comprehensive income (loss):

Income before income taxes 79,532 55,469 41,889

Provision for income tax expense 24,053 20,879 14,139

Net income $ 55,479 $ 34,590 $ 27,750

Other comprehensive income:

Foreign currency translation adjustments ( 1,975 ) 353 ( 163 )

Comprehensive income (loss) $ 34,943 $ 27,587 $ ( 4,894 )

Net income (loss) per share:

Comprehensive income $ 53,504 $ 34,943 $ 27,587

Net income per share:

Basic $ 1.46 $ 0.92 $ 0.75

15 unchanged sentences

Balance December 24, 2021 37,887,675 $ 380 $ 314,242 $ ( 2,022 ) $ 37,611 $ 350,211

Net loss — — — — ( 4,923 ) ( 4,923 )

Stock compensation 679,330 7 11,472 — — 11,479

Shares issued for acquisition — — 1,120 — — 1,120

Cumulative translation adjustment — — — 29 — 29

Shares surrendered to pay withholding taxes ( 66,423 ) — ( 2,084 ) — — ( 2,084 )

Balance December 24, 2021 37,887,675 $ 380 $ 314,242 $ ( 2,022 ) $ 37,611 $ 350,211

Net income — — — — 27,750 27,750

2 unchanged sentences

Warrants issued for acquisition — — 1,701 — — 1,701

Option exercises 3,407 — 69 — — 69

Cumulative translation adjustment — — — ( 163 ) — ( 163 )

Shares surrendered to pay withholding taxes ( 82,578 ) ( 1 ) ( 2,673 ) — — ( 2,674 )

Common stock issued under stock plans, net of shares surrendered to pay tax withholding ( 79,171 ) ( 1 ) ( 2,604 ) — — ( 2,605 )

Balance December 30, 2022 38,599,390 $ 386 $ 337,947 $ ( 2,185 ) $ 65,361 $ 401,509

2 unchanged sentences

Shares issued for acquisitions 75,008 1 2,494 — — 2,495

Option exercises 2,705 — 55 — — 55

Cumulative translation adjustment — — — 353 — 353

Shares surrendered to pay withholding taxes ( 64,563 ) ( 1 ) ( 2,152 ) — — ( 2,153 )

Common stock issued under stock plans, net of shares surrendered to pay tax withholding ( 61,858 ) ( 1 ) ( 2,097 ) — — ( 2,098 )

Balance December 29, 2023 39,665,796 $ 396 $ 356,157 $ ( 1,832 ) $ 99,951 $ 454,672

Net income — — — — 55,479 55,479

Stock compensation — — 15,333 — — 15,333

Conversion of debt to common stock 858,360 8 37,930 — — 37,938

Common stock retired ( 426,235 ) ( 4 ) ( 3,899 ) — ( 13,490 ) ( 17,393 )

Warrant exercises 38,904 1 ( 1 ) — — —

Cumulative translation adjustment — — — ( 1,975 ) — ( 1,975 )

Common stock issued under stock plans, net of shares surrendered to pay tax withholding 112,059 1 ( 6,409 ) — — ( 6,408 )

Balance December 27, 2024 40,248,884 $ 402 $ 399,111 $ ( 3,807 ) $ 141,940 $ 537,646

See accompanying notes to the consolidated financial statements.

6 unchanged sentences

Cash flows from operating activities:

Net income (loss) $ 34,590 $ 27,750 $ ( 4,923 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Net income $ 55,479 $ 34,590 $ 27,750

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 40,562 32,887 24,332

Amortization of intangible assets 24,372 22,719 13,913

Provision for allowance for doubtful accounts 8,078 6,048 ( 422 )

Provision (benefit) for deferred income taxes 8,114 9,601 ( 1,845 )

Provision for allowance for credit losses 11,982 8,078 6,048

Provision for deferred income taxes 1,464 8,114 9,601

Loss on debt extinguishment 685 — 14,287

9 unchanged sentences

Other assets and liabilities ( 5,713 ) ( 9,958 ) ( 1,341 )

Net cash provided by (used in) operating activities 61,639 23,134 ( 19,899 )

Net cash provided by operating activities 153,061 61,639 23,134

Cash flows from investing activities:

Capital expenditures ( 49,506 ) ( 57,427 ) ( 45,848 )

Cash paid for acquisitions, net ( 121,884 ) ( 186,175 ) ( 10,190 )

Cash paid for acquisitions, net of cash acquired ( 315 ) ( 121,884 ) ( 186,175 )

Net cash used in investing activities ( 49,821 ) ( 179,311 ) ( 232,023 )

4 unchanged sentences

Payment of deferred financing fees — ( 1,739 ) ( 19,039 )

Common stock repurchases ( 17,393 ) — —

Proceeds from exercise of stock options 175 55 69

1 unchanged sentence

Cash paid for contingent earn-out liabilities ( 3,800 ) ( 11,625 ) ( 3,788 )

Borrowings under asset-based loan facility and revolving credit facilities 60,000 42,220 —

Payments under asset-based loan facility ( 2,220 ) ( 20,000 ) ( 20,000 )

Net cash provided by (used in) financing activities 9,010 253,215 ( 9,222 )

Borrowings under asset-based loan and revolving credit facilities 46,430 60,000 42,220

Payments under asset-based loan and revolving credit facilities ( 26,430 ) ( 2,220 ) ( 20,000 )

Net cash (used in) provided by financing activities ( 38,482 ) 9,010 253,215

Effect of foreign currency on cash and cash equivalents 19 ( 260 ) ( 681 )

8 unchanged sentences

Description of Business and Basis of Presentation

The financial statements include the consolidated accounts of The Chefs’ Warehouse, Inc.

(the “Company”), and its wholly-owned subsidiaries.

The Chefs’ Warehouse, Inc.

(the “Company”), and its wholly-owned subsidiaries, is a distributor of specialty food and center-of-the-plate products in the United States, the Middle East and Canada.

The Company is focused on serving the specific needs of chefs who own and/or operate restaurants, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores.

The Company’s quarterly periods end on the thirteenth Friday of each quarter.

1 unchanged sentence

The consolidated statement of operations for the fiscal year ended December 30, 2022 contained a 53rd week, while all other years presented contain 52 weeks.

The Company’s business consists of three operating segments:

East, Midwest and West that aggregate into one reportable segment, food product distribution, which is concentrated primarily in the United States.

The Company’s customer base consists primarily of menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores.

Consolidation

1 unchanged sentence

All significant intercompany accounts and transactions have been eliminated.

Guidance Adopted in Fiscal 2024

Improvements to Reportable Segment Disclosures:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance which requires entities, including those with one reportable segment, to enhance reportable segment disclosures requirements particularly with respect to significant expenses.

The Company adopted the guidance, which is limited to financial statement disclosures, effective December 27, 2024, on a retrospective basis.

Guidance Not Yet Adopted

Induced Conversions of Convertible Debt Instruments :

In November 2024, the FASB issued guidance which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

The guidance is effective for fiscal years beginning after December 15, 2025, and interim periods within that fiscal year.

Early adoption is permitted.

The impact of this guidance is dependent on future induced conversions, if any, of the Company’s convertible debt instruments.

Disaggregation of Income Statement Expenses:

In November 2024, the FASB issued guidance to require disclosure in the notes to the financial statements of certain categories of expenses that are included on the face of the income statement, including purchases of inventory, employee compensation and depreciation and amortization, as well as additional disclosure about selling expenses.

The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 on a prospective basis.

Early adoption is permitted.

The Company expects to adopt this guidance when effective and is evaluating the impact of adoption on its consolidated financial statements, which is limited to financial statement disclosures.

Improvements to Income Tax Disclosures :

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The Company expects to adopt this guidance when effective and is evaluating the impact of adoption on its consolidated financial statements, which is limited to financial statement disclosures.

Improvements to Reportable Segment Disclosures:

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis.

Early adoption is permitted.

The Company expects to adopt this guidance when effective and is evaluating the impact of adoption on its consolidated financial statements, which is limited to financial statement disclosures.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with generally accepted accounting principles requires it to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities.

Estimates are used in determining, among other items, the allowance for doubtful accounts, inventory valuation adjustments, self-insurance reserves for group medical insurance, workers’ compensation insurance and automobile liability insurance, future cash flows associated with impairment testing for intangible assets (including goodwill) and long-lived assets, useful lives for intangible assets, stock-based compensation, contingent earn-out liabilities and tax reserves.

Estimates are used in determining, among other items, the allowance for credit losses, inventory valuation adjustments, self-insurance reserves for group medical insurance, workers’ compensation insurance and automobile liability insurance, future cash flows associated with impairment testing for intangible assets

(including goodwill) and long-lived assets, useful lives for intangible assets, stock-based compensation, contingent earn-out liabilities and income tax reserves.

Actual results could differ from estimates.

8 unchanged sentences

These sales incentives are accounted as variable consideration.

The Company estimates these amounts based on the expected amount to be provided to

customers and records a corresponding reduction in revenue.

The Company estimates these amounts based on the expected amount to be provided to customers and records a corresponding reduction in revenue.

The Company does not expect a significant reversal in the amount of cumulative revenue recognized.

49 unchanged sentences

Accounts Receivable

Accounts receivable consist of trade receivables from customers and are recorded net of an allowance for doubtful accounts.

The allowance for doubtful accounts is determined based upon a number of specific criteria, such as whether a customer has filed for or been placed into bankruptcy, has had accounts referred to outside parties for collections or has had accounts significantly past due.

Accounts receivable consist of trade receivables from customers and are recorded net of an allowance for credit losses.

The allowance for credit losses is determined based upon a number of specific criteria, such as whether a customer has filed for or been placed into bankruptcy, has had accounts referred to outside parties for collections or has had accounts significantly past due.

The allowance also covers short paid invoices the Company deems to be uncollectible as well as a portion of trade accounts receivable balances projected to become uncollectible based upon historic patterns and macro-economic factors in existence as of the balance sheet date that may impact the food-away-from-home industry and/or its customers.

8 unchanged sentences

Concentrations of Credit Risks

Financial instruments that subject the Company to concentrations of credit risk consist of cash, temporary cash investments and trade receivables.

The Company’s policy is to deposit its cash and temporary cash investments with major financial institutions.

The Company distributes its food and related products to a customer base that consists primarily of leading menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores.

Financial instruments that subject the Company to concentrations of credit risk consist of cash, cash equivalents and trade receivables.

The Company’s policy is to deposit its cash and cash equivalents with major financial institutions.

To reduce credit risk, the Company performs ongoing credit evaluations of its customers’ financial conditions.

The Company generally does not require collateral.

However, the Company,

in certain instances, has obtained personal guarantees from certain customers.

However, the Company, in certain instances, has obtained personal guarantees from certain customers.

There is no significant balance with any individual customer.

1 unchanged sentence

Property and equipment are recorded at cost and are depreciated on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.

Property and equipment are reviewed for impairment in accordance with Accounting Standards Codification (“ASC”) 360-10-35-15, “Impairment or Disposal of Long-Lived Assets ” which only requires testing whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

If any indicators are present, a recoverability test is performed by comparing the carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset.

If the net undiscounted cash flows do not exceed the carrying amount (i.e., the asset is not recoverable), an additional step is performed that determines the fair value of the asset and the Company records an impairment, if any.

The Company has no t recorded any impairment of equipment and leasehold improvements in fiscal 2023, 2022 or 2021.

The Company has no t recorded any impairment of property and equipment in fiscal 2024, 2023 or 2022.

The Company leases various distribution centers, office facilities, vehicles and equipment.

23 unchanged sentences

Convertible Debt

The Company evaluates debt instruments with embedded conversion features in accordance with ASC 815 “Derivatives and Hedging” and ASC 470 “Debt” both of which provide several criteria that determine whether a conversion feature must be

bifurcated from its debt host and accounted as a separate financial instrument.

An entity is not required to bifurcate if the conversion feature is indexed to its own stock, meets all equity classification criteria and does not contain a beneficial conversion feature.

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Intangible assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

If any indicators are present, a recoverability test is performed by comparing the carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset.

If any indicators are present, a recoverability test is performed by comparing the carrying amount of the asset or asset group to the net undiscounted cash flows expected to be generated from the asset.

Undiscounted cash flows expected to be generated by the related assets are estimated over the assets’ useful lives based on updated projections.

If the evaluation indicates that the carrying amount of the asset may not be recoverable, the potential impairment is measured based on a projected discounted cash flow model.

During fiscal 2023, the Company recognized a customer relationships intangible asset impairment charge of $ 1,838 , $ 1,333 net of tax, related to the loss of a significant customer post-acquisition.

During fiscal 2021, the Company recorded a $ 597 impairment charge, $ 433 net of tax, to fully write-down the net book value of a trademark.

These impairment charges are presented within other operating expense s on the consolidated statements of operations.

During fiscal 2023, the Company recognized a customer relationships intangible asset impairment charge of $ 1,838 , which was $ 1,333 net of tax, related to the loss of a significant customer post-acquisition.

The impairment charge is presented within other operating expense s on the consolidated statements of operations.

See Note 8 for more information.

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The Company has the option to evaluate goodwill impairment using a qualitative or quantitative analysis.

For the fiscal years ended December 29, 2023, December 30, 2022 and December 24, 2021, the Company assessed the recoverability of goodwill using a qualitative analysis and determined that it is more likely than not that the fair value of its reporting units exceeded their respective carry values.

For the fiscal year ended December 27, 2024, the Company assessed the recoverability of goodwill using a quantitative analysis and determined that the fair value of its reporting units substantially exceeded their respective carry values.

When a quantitative analysis is required, we estimate the fair value of our reporting units using a combination of income and market approaches.

The income approach incorporates the use of a discounted cash flow model that involves many management assumptions that are based upon future growth projections.

Assumptions include estimates of future revenue based upon budget projections and growth rates.

We develop estimates of future levels of gross and operating profits and projected capital expenditures.

This methodology includes the use of estimated discount rates based upon industry and competitor analysis as well as other factors.

The market approach of determining fair value, which includes the guideline public company method, is based on comparable market multiples for companies engaged in similar businesses.

For the fiscal years ended December 29, 2023 and December 30, 2022, the Company assessed the recoverability of goodwill using a qualitative analysis and determined that it is more likely than not that the fair value of its reporting units exceeded their respective carry values.

The qualitative analysis considered various factors including macroeconomic conditions, market conditions, industry trends, cost factors and financial performance, among others.

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This evaluation considers several factors, including results of recent operations, future taxable income, scheduled reversal of deferred tax liabilities, and tax planning strategies.

As of December 29, 2023 and December 30, 2022, the Company had valuation allowances of $ 2,119 and $ 1,641 , respectively, relating to certain net operating losses that may not be realizable in the future based on taxable income forecasts and certain state net operating loss limitations.

As of December 27, 2024, the Company did not have a valuation allowance.

As of December 29, 2023, the Company had valuation allowances of $ 2,119 , relating to certain net operating losses.

ASC 740, “Income Taxes” established a single model to address accounting for uncertain tax positions and clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements.

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The Company determines the fair value of contingent consideration based on future operating projections under various potential scenarios, including the use of Monte Carlo simulation models, and weighs the probability of these outcomes.

The ultimate settlement of contingent earn-out liabilities relating to business combinations may be for amounts which are materially different from the amounts initially recorded and may cause volatility in the Company’s results of operations.

The ultimate settlement of contingent earn-out liabilities relating to business

combinations may be for amounts which are materially different from the amounts initially recorded and may cause volatility in the Company’s results of operations.

Net Income per Share

4 unchanged sentences

The dilutive potential common shares for the Company’s convertible notes were determined using the if-converted method.

Under the if-converted method, the convertible notes would have a dilutive impact on net income per share when the average market price of the Company’s common stock for a given period exceeds the respective conversion price of the convertible notes.

When the Company’s convertible notes are dilutive, interest on the convertible notes, net of tax, is added back to net income in order to calculate diluted earnings available to common shareholders.

Stock-Based Compensation

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The Company measures stock-based compensation for stock awards classified as equity at the grant date based on the fair value of the award.

Restricted stock awards (“RSAs”) and performance share units are valued based on the fair value of the stock on the grant date.

Restricted stock awards (“RSAs”), restricted share units (“RSUs”) and performance share units are valued based on the fair value of the stock on the grant date.

The related compensation expense is recognized over the service period on a straight-line basis and reduced by forfeitures when they occur.

Stock-based compensation expense is presented within selling, general and administrative expenses on the Company’s consolidated statements of operations.

Compensation expense on performance share units reflects the estimated

probable outcome at the end of the performance period.

Compensation expense on performance share units reflects the estimated probable outcome at the end of the performance period.

The fair value of stock options and RSAs with market conditions is determined based on a Monte Carlo simulation model in order to simulate a range of possible future stock prices for the Company’s common stock.

For awards subject to graded vesting, the Company ensures that the compensation expense recognized is at least equal to the vested portion of the award.

Share Repurchases

The Company has a share repurchase program that is executed through purchases made from time to time either in the open market or through private market transactions.

All shares repurchased under the share repurchase program have been retired and were returned to the status of authorized and unissued shares.

When treasury shares are retired, the Company allocates the excess of the repurchase price over the par value of shares acquired between additional paid-in capital and retained earnings.

The portion allocated to additional paid-in capital is limited to the pro rata portion of additional paid-in capital for the retired treasury shares.

Any further excess of the repurchase price is allocated to retained earnings.

Self-Insurance Reserves

The Company maintains a self-insured group medical program.

The program contains individual stop loss thresholds of $ 300 per incident and aggregate stop loss thresholds based upon the average number of employees enrolled in the program throughout the year.

The program contains individual stop loss thresholds per incident and aggregate stop loss thresholds based upon the average number of employees enrolled in the program throughout the year.

The amount in excess of the self-insured levels is fully insured by third party insurers.

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Projections of future loss expenses are inherently uncertain because of the random nature of insurance claims occurrences and could be significantly affected if future occurrences and claims differ from these assumptions and historical trends.

The Company maintains an insurance program for its automobile liability and workers’ compensation insurance subject to deductibles or self-insured retentions of $ 500 per occurrence.

The Company maintains an insurance program for its automobile liability and workers’ compensation insurance subject to deductibles or self-insured retentions.

The amounts in excess of the deductibles are fully insured by third party insurers.

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Level 3 - Inputs to the valuation methodology are unobservable (i.e., supported by little or no market activity) and significant to the fair value measure, generally using pricing models or other valuation techniques that reflect management’s judgment and estimates.

Note 3 – Net Income (Loss) per Share

The following table sets forth the computation of basic and diluted net income (loss) per common share:

Note 3 – Net Income per Share

The following table sets forth the computation of basic and diluted net income per common share:

Fiscal Years Ended

December 27, 2024 December 29, 2023 December 30, 2022

Net income (loss) per share:

Net income per share:

Basic $ 1.46 $ 0.92 $ 0.75

3 unchanged sentences

Diluted 45,983,065 45,639,220 38,742,328

Reconciliation of net income (loss) per common share:

Reconciliation of net income per common share:

Fiscal Years Ended

December 27, 2024 December 29, 2023 December 30, 2022

Net income (loss) $ 34,590 $ 27,750 $ ( 4,923 )

Net income $ 55,479 $ 34,590 $ 27,750

Add effect of dilutive securities:

Interest on convertible notes, net of tax 5,234 5,399 580

Adjusted net income (loss) $ 39,989 $ 28,330 $ ( 4,923 )

Net income available to common shareholders $ 60,713 $ 39,989 $ 28,330

Weighted average basic common shares outstanding 37,914,060 37,633,672 37,094,220

3 unchanged sentences

Weighted average diluted common shares outstanding 45,983,065 45,639,220 38,742,328

Potentially dilutive securities that have been excluded from the calculation of diluted net income (loss) per common share because the effect is anti-dilutive are as follows:

Potentially dilutive securities that have been excluded from the calculation of diluted net income per common share because the effect is anti-dilutive are as follows:

Fiscal Years Ended

December 27, 2024 December 29, 2023 December 30, 2022

Restricted share awards 532,608 906 306,084

Restricted share awards and restricted share units 270,751 532,608 906

Stock options and warrants — 300,000 —

13 unchanged sentences

Balance December 29, 2023 9,765

Acquisition value 5,765

Cash payments ( 5,750 )

1 unchanged sentence

Balance December 27, 2024 $ 750

The long-term portion of contingent earn-out liabilities was $ 50 and $ 10,483 as of December 29, 2023 and December 30, 2022, respectively, and are reflected as other liabilities on the Company’s consolidated balance sheets.

The remaining short-term portion of earn-out liabilities are reflected as accrued liabilities on the Company’s consolidated balance sheets.

Contingent earn-out liability payments in excess of the acquisition date fair value of the underlying contingent earn-out liability are

classified as operating activities on the Company’s consolidated statements of cash flows and all other such payments are classified as financing activities.

The contingent earn-out liability as of December 27, 2024 is reflected in accrued liabilities on the Company’s consolidated balance sheets.

The long-term portion of contingent earn-out liability as of December 29, 2023 was $ 50 and is reflected as other liabilities on the Company’s consolidated balance sheets.

The remaining short-term portion is reflected as accrued liabilities on the Company’s consolidated balance sheets.

Contingent earn-out liability payments in excess of the acquisition date fair value of the underlying contingent earn-out liability are classified as operating activities on the Company’s consolidated statements of cash flows and all other such payments are classified as financing activities.

Fair Value of Financial Instruments

The carrying amounts reported in the Company’s consolidated balance sheets for accounts receivable and accounts payable approximate fair value due to the immediate to short-term nature of these financial instruments.

The carrying amounts reported in the Company’s consolidated balance sheets for accounts receivable and accounts payable approximate fair value due to their immediate to short-term nature.

The fair values of the asset-based loan facility and term loan approximated their book values as of December 27, 2024 and December 29, 2023 as these instruments had variable interest rates that reflected current market rates available to the Company and are classified as Level 2 fair value measurements.

The following table presents the carrying value and fair value of the Company’s convertible notes and GreenLeaf Note (more fully described in Note 9).

The fair value of the Company’s 2028 Convertible Senior Notes was based on Level 1 inputs.

In estimating the fair value of its 2024 Convertible Senior Notes and Convertible Unsecured Note, the Company utilized Level 3 inputs including prevailing market interest rates to estimate the debt portion of the instrument and a Black Scholes valuation model to estimate the fair value of the conversion options.

The fair value of the Company’s 2028 Convertible Senior Notes was based on Level 1 inputs as of December 29, 2023.

Due to lower trading volume in the fourth quarter of fiscal 2024, the fair value of the 2028 Convertible Senior Notes was based on Level 2 inputs as of December 27, 2024.

The fair value of the 2028 Convertible Senior Notes in both years was based on bid/ask quotes as of or near the balance sheet date.

In estimating the fair value of its 2024 Convertible Senior Notes as of December 29, 2023, the Company utilized Level 3 inputs including prevailing market interest rates to estimate the debt portion of the instrument and a Black Scholes valuation model to estimate the fair value of the conversion option.

The Black Scholes model utilizes the market price of the Company’s common stock, estimates of the stock’s volatility and the prevailing risk free interest rate in calculating the fair value estimate.

The fair value of the GreenLeaf Note was determined based upon observable market prices of similar debt instruments.

The Convertible Unsecured Note matured in 2023 and was repaid in full.

December 27, 2024 December 29, 2023

1 unchanged sentence

2028 Convertible Senior Notes Level 2 (1)

$ 287,500 $ 365,556 $ 287,500 $ 277,354

2024 Convertible Senior Notes Level 3 $ — $ — $ 39,684 $ 38,609

GreenLeaf Note Level 2 $ 5,000 $ 5,070 $ 10,000 $ 9,991

Convertible Unsecured Note Level 3 $ — $ — $ 4,000 $ 4,345

(1) The fair value of the 2028 Convertible Senior Notes was based on Level 1 inputs as of December 29, 2023.

Note 5 – Acquisitions

The Company paid approximately $ 315 during fiscal 2024 upon settlement of net working capital true-ups on prior year acquisitions, resulting in measurement period adjustments which increased goodwill by $ 656 and reduced prepaid expenses and other current assets by $ 341 .

The Company recognized professional fees related to acquisition activities of $ 3,481 and $ 4,357 for fiscal 2023 and 2022, respectively, presented within other operating expenses, net on the consolidated statements of operations.

There were no professional fees related to acquisition activities recorded during fiscal 2024.

On May 1, 2023, the Company entered into a stock purchase agreement to acquire substantially all of the equity interests of Oakville Produce Partners, LLC (“GreenLeaf”), a leading produce and specialty food distributor in Northern California.

The final purchase price was $ 88,174 consisting of $ 72,157 paid in cash at closing, $ 3,521 paid upon settlement of a net working capital true-up, the issuance of a $ 10,000 unsecured note and 75,008 shares of the Company’s common stock with an approximate value of $ 2,496 based on the trading price of the Company’s common stock on the date of acquisition.

The final purchase price was $ 88,204 consisting of $ 72,157 paid in cash at closing, $ 3,551 paid upon settlement of net working capital true-ups, the issuance of a $ 10,000 unsecured note and 75,008 shares of the Company’s common stock with an approximate value of $ 2,496 based on the trading price of the Company’s common stock on the date of acquisition.

The acquisition was partially funded by a $ 40,000 incremental draw on the Company’s asset-based loan facility.

All of the goodwill recorded for the GreenLeaf acquisition is deductible for income tax purposes.

All of the goodwill recorded for the GreenLeaf acquisition of $ 47,235 is deductible for income tax purposes.

The goodwill recorded primarily reflects the value of acquiring an established specialty produce distributor to leverage the Company’s existing products in the markets served by GreenLeaf and any intangible assets that do not qualify for separate recognition, including assembled workforce.

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The payment of the earn-out liability is subject to the successful achievement of certain earnings before interest, taxes, depreciation and amortization (“EBITDA”) targets.

All of the goodwill recorded for the Hardie’s acquisition is deductible for income tax purposes.

All of the goodwill recorded for the Hardie’s acquisition of $ 11,516 is deductible for income tax purposes.

The goodwill recorded primarily reflects the value of acquiring an established specialty produce distributor to leverage the Company’s existing products in the markets served by Hardie’s and any intangible assets that do not qualify for separate recognition, including assembled workforce.

The intangible assets acquired consisted of

customer relationships and trademarks valued at $ 14,000 and $ 3,600 , respectively, as of the acquisition date.

The intangible assets acquired consisted of customer relationships and trademarks valued at $ 14,000 and $ 3,600 , respectively, as of the acquisition date.

During fiscal 2023, the Company incurred a customer relationship impairment charge more fully described in Note 8 “Goodwill and Other Intangible Assets.” The remaining customer relationships and trademarks are being amortized over 10 and 5 years, respectively.

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Other Fiscal 2023 Acquisitions

During the fiscal year ended December 29, 2023, the Company completed three other acquisitions for an aggregate initial purchase price of approximately $ 17,744 , consisting of $ 12,971 paid in cash at closing, $ 893 paid upon settlement of a net working capital adjustment, earn-out liabilities valued at approximately of $ 1,665 as of the dates of acquisition, and $ 2,215 of deferred payments.

During the fiscal year ended December 29, 2023, the Company completed three other acquisitions for an aggregate purchase price of approximately $ 18,029 , consisting of $ 12,971 paid in cash at closing, $ 1,178 paid upon settlement of net working capital adjustments, earn-out liabilities valued at approximately of $ 1,665 as of the dates of acquisition, and $ 2,215 of deferred payments.

If earned, these earn-out liabilities could total up to $ 2,562 in the aggregate.

The Company’s aggregate purchase price allocations are preliminary and are subject to revision pending the valuations of some elements of the goodwill and intangible assets acquired.

These valuations are incomplete as of December 29, 2023 as the Company is currently in the process of completing its assessment of valuation inputs and assumptions as well as opening working capital.

When applicable, these valuations require the use of Level 3 inputs.

All of the goodwill recorded for these acquisitions of $ 8,218 is deductible for income tax purposes.

All of the goodwill recorded for these acquisitions of $ 8,844 is deductible for income tax

The intangible assets acquired consisted of customer relationships valued at $ 4,276 as of the acquisition dates.

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The customer relationships, trademarks and non-compete agreements are being amortized over 10 , 15 and 3 years, respectively.

None of the goodwill recorded for the CME acquisition is deductible for income tax purposes.

None of the goodwill recorded for the CME acquisition of $ 24,548 is deductible for income tax purposes.

The goodwill recorded primarily reflects the value of acquiring an established specialty seafood and produce distributor and any intangible assets that do not qualify for separate recognition.

The table below sets forth the total assets acquired and liabilities assumed:

Chef Middle East Hardie’s GreenLeaf Other Fiscal 2023 Acquisitions

Current assets $ 84,076 $ 26,366 $ 16,069 $ 8,632

Customer relationships 25,800 14,000 29,900 4,276

Trademarks 11,400 3,600 1,500 —

Non-compete agreements 320 — 400 —

Goodwill 24,548 11,516 47,205 8,218

Fixed assets 16,953 4,986 2,231 326

Right-of-use assets 5,321 13,303 2,026 3,258

Other assets 859 146 109 34

Deferred tax liabilities ( 3,600 ) — — ( 236 )

Lease liabilities ( 5,321 ) ( 13,303 ) ( 2,026 ) ( 3,258 )

Current liabilities ( 43,841 ) ( 19,253 ) ( 9,240 ) ( 3,506 )

Total $ 116,515 $ 41,361 $ 88,174 $ 17,744

The Company recognized professional fees related to acquisition activities of $ 3,481 , $ 4,357 and $ 450 for fiscal 2023, 2022 and 2021, respectively, presented within other operating expenses, net on the consolidated statements of operations.

Unaudited Pro forma Financial Information

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The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisitions, any incremental costs for transitioning to become a public company, and also does not reflect additional revenue opportunities following the acquisitions.

The pro forma information reflects amortization and depreciation of the acquisitions at their respective fair value.

The pro forma information reflects amortization expense related to the acquired intangible assets and depreciation expense on the acquired fair value of property and equipment.

The pro forma information also reflects additional interest expense that would have been incurred by the Company to finance the acquisitions.

Pro forma interest expense was estimated based on the prevailing interest rates charged on the Company’s senior secured term loan during fiscal 2022.

CME did not have a pro forma impact during the fiscal year ended December 29, 2023 as it was included in the consolidated results of operations for the entire period.

GreenLeaf, Hardie’s and CME did not have a pro forma impact during the fiscal year ended December 27, 2024 as they were included in the consolidated results of operations for the entire period.

Fiscal Years Ended

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$ 275,781 $ 234,793

Construction-in-process at December 27, 2024 related primarily to on-going investments in the Company’s information systems and distribution facilities.

Construction-in-process at December 29, 2023 related primarily to the build-out of the Company’s Richmond, CA and CME distribution facilities.

Construction-in-process at December 30, 2022 related primarily related primarily to the build-outs of the Company’s Miami, Dallas, and Richmond, CA distribution facilities and the implementation of the Company’s Enterprise Resource Planning System.

The net book value of equipment financed under finance leases at December 27, 2024 and December 29, 2023 was $ 45,051 and $ 20,161 , respectively.

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Goodwill adjustments 656

Acquisitions 66,940

Foreign currency translation ( 379 )

Carrying amount as of December 27, 2024 $ 356,298

(1) Goodwill adjustments represent measurement period adjustments related to certain acquisitions completed in that fiscal year and prior years.

The goodwill adjustments included in the table above represent measurement period adjustments related to certain acquisitions completed in prior years.

Other intangible assets as of December 27, 2024 and December 29, 2023 consisted of the following:

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The impairment charge was measured by reducing its assumption of future sales for the significant customer lost post-acquisition to zero.

During fiscal 2021, the Company recorded a $ 597 impairment charge, $ 433 net of tax, to fully write-down the net book value of its Cambridge trademark.

These impairment charges are presented within other operating expense s on the consolidated statements of operations.

The impairment charge is presented within other operating expense s on the consolidated statements of operations.

Amortization expense for other intangibles was $ 24,372 , $ 22,719 and $ 13,913 for the fiscal years ended December 27, 2024, December 29, 2023 and December 30, 2022, respectively.

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Debt obligations as of December 27, 2024 and December 29, 2023 consisted of the following:

Weighted Average Effective Interest Rate at December 29, 2023 Maturity December 29, 2023 December 30, 2022

Senior secured term loan 10.96 % August 2029 $ 276,250 $ 299,250

Weighted Average Effective Interest Rate at

December 27, 2024 Maturity December 27, 2024 December 29, 2023

Senior secured term loans 8.60 % August 2029 $ 260,000 $ 276,250

2028 Convertible senior notes 2.77 % December 2028 287,500 287,500

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Finance leases and other financing obligations 6.42 % Various 52,673 31,892

Convertible unsecured note — % June 2023 — 4,000

Unamortized deferred costs and premium ( 13,389 ) ( 17,339 )

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Maturities of the Company’s debt, excluding finance leases, for each of the next five years and thereafter at December 27, 2024 are as follows:

2024 $ 47,684

Thereafter 261,250

Total $ 672,500

Senior Secured Term Loan Credit Facility

On June 22, 2016, the Company entered into a credit agreement (the “Term Loan Credit Agreement”) with a group of lenders for which Jefferies Finance LLC acts as administrative agent and collateral agent.

The Term Loan Credit Agreement provides for a senior secured term loan B facility (the “Term Loan Facility”).

On June 22, 2016, the Company entered into a credit agreement (the “Term Loan Credit Agreement”) with a group of lenders that provides for a senior secured term loan B facility (the “Term Loan Facility”).

On August 23, 2022, the Company entered into an eighth amendment (“Eighth Amendment”) in an aggregate principal amount of $ 300,000 maturing on August 23, 2029 (“2029 Term Loans”), comprising of a refinancing of the then existing term loans balance under the Term Loan Credit Agreement of $ 167,391 and an incremental borrowing of $ 132,609 .

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On August 31, 2023, the Company made a voluntary prepayment of $ 20,000 towards the 2029 Term Loans.

In connection with the prepayment, the Company wrote-off unamortized deferred financing fees of $ 770 , which were

included in interest expense within the Company’s consolidated statements of operations.

In connection with the prepayment, the Company wrote-off unamortized deferred financing fees of $ 770 , which were included in interest expense within the Company’s consolidated statements of operations.

On November 6, 2023, the Company entered into a tenth amendment (“Tenth Amendment”) to the Term Loan Credit Agreement which added a provision to allow share repurchases of the Company’s common stock subject to certain restrictive covenants.

Additionally, the Term Credit Agreement includes an accordion which permits the Company to request that the lenders extend additional Term Loans based on certain performance, leverage ratio and other restrictions.

In fiscal 2024, the Company entered into two separate amendments to the Term Loan Credit Agreement, both of which reduced the interest rate spread on the Term Loan Facility.

Additionally, during the fiscal year ended December 27, 2024, the Company made voluntary principal prepayments totaling $ 14,000 towards the 2029 Term Loans.

In connection with the prepayments, the Company wrote-off unamortized deferred financing fees of $ 531 during the fiscal year ended December 27, 2024, which were included in interest expense within the Company’s consolidated statements of operations.

The Term Credit Agreement includes an accordion which permits the Company to request that the lenders extend additional Term Loans based on certain performance, leverage ratio and other restrictions.

The Term Loan Credit Agreement includes a springing maturity of the earlier of August 23, 2029 and the date that is 181 days prior to the schedule maturity date of any individual trance of unsecured indebtedness of which a principal amount in excess of $ 40,000 remains outstanding on such date.

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The Company is required to make scheduled principal payments of 0.25 % of the original principal amount per quarter.

The Eighth Amendment involved multiple members of a loan syndicate.

The Company performed an analysis for each lender in accordance with ASC 470 “Debt” to determine whether the Eighth Amendment resulted in a substantial change to the remaining cash flows which is defined as a change in present value of remaining cash flows of 10% or more.

As a result of the analysis, the Company incurred a loss on debt extinguishment of $ 142 which represents the portion of unamortized deferred financing fees attributable to lenders that exited the loan syndicate.

The amendments involved multiple members of a loan syndicate.

For each amendment, the Company performed an analysis for each lender in accordance with ASC 470 “Debt” to determine whether the amendment resulted in a substantial change to the remaining cash flows which is defined as a change in present value of remaining cash flows of 10% or more.

As a result of the analysis for the Eight Amendment, the Company incurred a loss on debt extinguishment of $ 142 during the fiscal year ended December 30, 2022, which represents the portion of unamortized deferred financing fees attributable to lenders that exited the loan syndicate.

The transaction was accounted for as a modification for existing lenders that participated in the 2029 Term Loans.

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Arrangement and third-party transaction costs of $ 4,498 were expensed as incurred.

A similar analysis was performed on the Tenth Amendment and as a result, the Company accounted for it as a modification and deferred lender fees of $ 1,385 as debt issuance costs to be amortized over the term of the loan and expensed third-party transaction costs of approximately $ 319 .

As a result of the amendments that occurred during the fiscal year ended December 27, 2024, the Company incurred a loss on debt extinguishment of $ 154 during the fiscal year ended December 27, 2024, which represents the portion of unamortized deferred financing fees attributable to the lenders that exited the loan syndicate.

Arrangement fees of $ 1,300 and third-party transaction costs of $ 156 were expensed as incurred during the fiscal year ended December 27, 2024 and included in interest expense and other operating expenses , respectively, within the Company’s consolidated statements of operations.

The Term Loan Facility contains affirmative covenants, negative covenants and events of default customary for a term loan B facility of this type.

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Asset-Based Loan Facility

On June 29, 2018, the Company entered into a credit agreement (the “ABL Credit Agreement”) with a group of lenders for which BMO Harris Bank, N.A.

acts as administrative agent.

The ABL Credit Agreement provides for an asset-based loan facility (the “ABL”) in the aggregate amount of up to $ 150,000 .

On June 29, 2018, the Company entered into a credit agreement (the “ABL Credit Agreement”) with a group of lenders that provides for an asset-based loan facility (the “ABL”) in the aggregate amount of up to $ 150,000 .

On March 11, 2022, the Company entered into a third amendment to the ABL Credit Agreement which increased the aggregate commitments to $ 200,000 maturing on March 11, 2027.

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The Company under the ABL is entitled on one or more occasions, subject to the satisfaction of certain conditions, to request an increase in the commitments under the ABL in an aggregate principal amount of up to $ 25,000 .

The ABL includes a springing maturity date that occurs 90 days prior to the earliest maturity under the Company’s senior secured term loan facility and the date that is 181 days prior to the scheduled maturity date of any individual tranche of unsecured indebtedness of which a principal amount in excess of $ 40,000 remains outstanding on such date and March 11, 2027.

The interest rate charged on borrowings under the ABL is equal to a spread plus, at the Company’s option, either the Base Rate or a forward-looking term rate based on SOFR for one-, three-, or six-month interest periods chosen by the Company.

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On December 13, 2022, the Company issued $ 287,500 aggregate principal amount of 2.375 % Convertible Senior Notes (the “2028 Convertible Notes”).

The 2028 Senior Notes were issued pursuant to an indenture, dated as of December 13, 2022 (the “2028 Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee.

The 2028 Senior Notes were issued pursuant to an indenture (the “2028 Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee.

Concurrently with the issuance of the 2028 Convertible Notes, the Company entered into separate, privately negotiated transactions (the “Exchange Transactions”) with a limited number of holders of its 1.875 % Convertible Senior Notes ( the “2024 Convertible Notes) to exchange or repurchase approximately $ 158,316 principal amount of 2024 Convertible Notes for an aggregate consideration consisting of approximately $ 159,709 in cash, which includes accrued interest on the 2024 Convertible Notes, and approximately 324,066 shares of the Company’s common stock.

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The 2028 Convertible Notes bear interest of 2.375 % per annum payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2023.

The initial conversion price is approximately $ 44.27 per share together with cash in lieu of any fractional share.

The initial conversion price is approximately $ 44.27 per share together with cash in

lieu of any fractional share.

The conversion price is subject to adjustments upon the occurrence of certain events.

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2024 Convertible Senior Notes

On November 22, 2019, the Company issued $ 150,000 aggregate principal amount of 2024 Convertible Notes pursuant to an indenture, dated as of November 22, 2019 (the “2024 Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee.

Approximately $ 43,225 of the net proceeds were used to repay all borrowings then outstanding under the ABL and the remainder was used for working capital, general corporate purposes and acquisitions.

The Company incurred transaction costs of approximately $ 5,082 which were capitalized as deferred financing fees to be amortized over the term of the 2024 Convertible Notes.

On March 1, 2021, the Company issued $ 50,000 aggregate principal amount of 2024 Convertible Notes at a premium which were offered as an additional issuance and under the same terms as the 2024 Convertible Notes initially issued on November 22, 2019.

Net proceeds were used to repay all outstanding borrowings under the Company's 2022 tranche of senior secured term loans of $ 31,166 and repay a portion of borrowings outstanding under the Company’s ABL.

The Company incurred transaction costs of approximately $ 1,350 which were capitalized as deferred financing fees to be amortized over the term of the 2024 Senior Notes.

The 2024 Convertible Notes bear interest of 1.875 % per annum payable semiannually in arrears on June 1 and December 1 of each year, beginning on June 1, 2020.

At any time before the close of business on the scheduled trading day immediately before the maturity date, the 2024 Convertible Notes will be convertible at the option of holders into shares of the Company’s common stock, together with cash in lieu of any fractional share, at an initial conversion price of approximately $ 44.20 per share.

conversion price is subject to adjustments upon the occurrence of certain events.

The 2024 Convertible Notes will mature on December 1, 2024, unless earlier converted or repurchased in accordance with their terms.

The Company may not redeem the 2024 Convertible Notes at its option prior to maturity.

In addition, if the Company undergoes a fundamental change, as described in the 2024 Indenture, holders may require the Company to repurchase for cash all or part of their 2024 Convertible Notes at a repurchase price equal to 100 % of the principal amount of the 2024 Convertible Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the required repurchase date.

On November 22, 2019, the Company issued $ 150,000 aggregate principal amount of 2024 Convertible Notes pursuant to an indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee.

On March 1, 2021, the Company issued an additional $ 50,000 aggregate principal amount of 2024 Convertible Notes at a premium under the same terms as the previous issuance of the 2024 Convertible Notes.

The Company incurred transaction costs for both issuances which were capitalized as deferred financing fees and amortized over the term of the 2024 Convertible Notes.

The 2024 Convertible Notes bore interest of 1.875 % per annum payable semiannually in arrears.

At any time before the close of business on the scheduled trading day immediately before the maturity date, the 2024 Convertible Notes were convertible at the option of holders into shares of the Company’s common stock, together with cash in lieu of any fractional share, at an initial conversion price of approximately $ 44.20 per share.

The conversion price is subject to adjustments upon the occurrence of certain events.

The 2024 Convertible Notes matured on December 1, 2024, and the Company issued 858,360 shares of its common stock, in accordance with the exercise of conversion rights provisions of the 2024 Convertible Notes, and paid approximately $ 2.1 million, which included accrued interest on the 2024 Convertible Note.

GreenLeaf Unsecured Note

In connection with the GreenLeaf acquisition, the Company issued a $ 10,000 unsecured note bearing interest of 4.5 %.

The principal on the unsecured note is due in two equal installments on April 30, 2024 and 2025 and is presented under the caption “Finance leases and other financing obligations” in the table above.

The first installment of the principal on the unsecured note of $ 5,000 was paid in April 2024, with the second installment due on April 30, 2025.

The unsecured note is presented under the caption “Finance leases and other financing obligations” in the table above.

Convertible Unsecured Note

On February 25, 2019, the Company issued a $ 4,000 convertible unsecured note (the “Unsecured Note”), maturing on June 29, 2023, to Bassian Farms, Inc.

(the “Holder”) as partial consideration in the Bassian acquisition.

The interest rate charged on the Unsecured Note was 4.5 % per annum and increased to 5.0 % after the two-year anniversary of the closing date.

The Unsecured Note matured on June 29, 2023 and was repaid in full, including all accrued interest, for $ 4,049 in cash.

The net carry value of the Company’s convertible notes as of December 29, 2023 and December 30, 2022 was:

On February 25, 2019, the Company issued a $ 4,000 convertible unsecured note (the “Unsecured Note”) that matured on June 29, 2023 as partial consideration for an acquisition.

The Unsecured Note and was repaid in full, including all accrued interest, for $ 4,049 in cash.

Convertible Notes

The net carry value of the Company’s convertible senior notes as of December 27, 2024 and December 29, 2023 was:

December 27, 2024 December 29, 2023

Principal Amount Unamortized Deferred Costs and Premium Net Amount Principal Amount Unamortized Deferred Costs and Premium Net Amount

2028 Convertible Senior Notes $ 287,500 $ ( 5,730 ) $ 281,770 $ 287,500 $ ( 6,876 ) $ 280,624

2024 Convertible Senior Notes 39,684 ( 185 ) 39,499 41,684 ( 373 ) 41,311

Convertible Unsecured Note — — — 4,000 — 4,000

2028 Convertible Notes $ 287,500 $ ( 4,584 ) $ 282,916 $ 287,500 $ ( 5,730 ) $ 281,770

2024 Convertible Notes — — — 39,684 ( 185 ) 39,499

Total $ 287,500 $ ( 4,584 ) $ 282,916 $ 327,184 $ ( 5,915 ) $ 321,269

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In connection with an acquisition during fiscal 2022, the Company issued warrants with a fair value of $ 1,701 to purchase up to 150,000 shares of the Company’s common stock at an exercise price of $ 31.55 per share.

These warrants expire on April 22, 2024.

These warrants expire on December 26, 2025.

At December 27, 2024, there were 27,908 warrants outstanding.

2023 Employee Stock Purchase Plan

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The plan does not include any look-back or reset provisions.

The first offering period is October 16, 2023 to December 31, 2023.

Subsequent offering periods will run bi-annually from January 1st to June 30th and July 1st to December 31st.

The offering periods run bi-annually from January 1st to June 30th and July 1st to December 31st.

At December 27, 2024, there were 763,494 shares of common stock available for issuance under the ESPP.

The ESPP did not have a material impact on the Company’s consolidated financial statements in fiscal year 2023.

The ESPP did not have a material impact on the Company’s consolidated financial statements in fiscal years 2024 and 2023.

The Company may amend, suspend or terminate the ESPP at any time.

Equity Incentive Plan

On May 17, 2019, the Company’s stockholders approved the 2019 Omnibus Equity Incentive Plan (the “2019 Plan”).

Concurrently, the 2011 Omnibus Equity Incentive Plan (the “2011 Plan”) was terminated and any shares remaining available for new grants under the 2011 Plan share reserve were extinguished.

The purpose of the 2019 Plan is to promote the interests of the Company and its stockholders by (i) attracting and retaining key officers, employees and directors of, and consultants to, the Company and its Subsidiaries and Affiliates;

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and (v) linking their compensation to the long-term interests of the Company and its stockholders.

The 2019 Plan is administered by the Compensation and Human Capital Committee (the “Committee”) of the Board of Directors and allows for the issuance of stock options, stock appreciation rights (“SARs”), RSAs, restricted share units, performance awards, or other stock-based awards.

The 2019 Plan is administered by the Compensation and Human Capital Committee (the “Committee”) of the Board of Directors and allows for the issuance of stock options, stock appreciation rights (“SARs”), RSAs, RSUs, performance awards, or other stock-based awards.

Stock option exercise prices are fixed by the Committee but shall not be less than the fair market value of a common share on the date of the grant of the option, except in the case of substitute awards.

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The related tax expense (benefit) for stock-based compensation was $( 211 ), $ 580 and $( 22 ) for the fiscal years ended December 27, 2024, December 29, 2023 and December 30, 2022, respectively.

The following table reflects the activity of RSAs during the fiscal year ended December 29, 2023:

The following table reflects the activity of RSAs and RSUs during the fiscal year ended December 27, 2024:

Time-Based Performance-Based Market-Based

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Unvested at December 27, 2024 483,284 $ 35.68 881,500 $ 34.79 303,036 $ 30.04

The fair value of RSAs vested during the fiscal years ended December 29, 2023, December 30, 2022 and December 24, 2021, was $ 7,170 , $ 8,719 and $ 7,848 , respectively.

The fair value of RSAs and RSUs vested during the fiscal years ended December 27, 2024, December 29, 2023 and December 30, 2022, was $ 18,370 , $ 7,170 and $ 8,719 , respectively.

The Company granted 642,462 RSAs and RSUs to its employees and directors at a weighted average grant date fair value of $ 38.07 during the fiscal year ended December 27, 2024.

These awards are a mix of time-, market- and performance-based grants awarded to key employees and non-employee directors that generally vest over a range of periods up to five years .

The market- and performance-based RSAs generally cliff vest, if at all, after the conclusion of a three-year performance period and vesting is subject to the award recipient’s continued service to the Company as of the vesting date.

The number of performance-based RSAs that ultimately vest is based on the Company’s attainment of certain profitability and return on invested capital targets.

At December 29, 2023, the total unrecognized compensation cost for the Company’s unvested RSAs was $ 18,895 to be recognized over a weighted-average period of approximately 1.6 years.

Of this total, $ 9,016 related to RSAs with time-based

vesting provisions to be recognized over a weighted average period of 1.5 years and $ 9,879 related to RSAs with performance- or market-based vesting provisions to be recognized over a weighted average period of 1.6 years.

The market- and performance-based RSAs and RSUs generally cliff vest, if at all, after the conclusion of a three-year performance period and vesting is subject to the award recipient’s continued service to the Company as of the vesting date.

The number of performance-based RSAs and RSUs that ultimately vest is based on the Company’s attainment of certain profitability and return on invested capital targets.

At December 27, 2024, the total unrecognized compensation cost for the unvested RSAs and RSUs was $ 19,797 to be recognized over a weighted-average period of approximately 1.7 years.

Of this total, $ 10,936 related to awards with time-based vesting provisions to be recognized over a weighted average period of 1.6 years and $ 8,861 related to awards with performance- or market-based vesting provisions to be recognized over a weighted average period of 1.8 years.

The following table summarizes stock option activity during the fiscal year ended December 27, 2024:

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The total intrinsic value of options exercised during fiscal 2024, 2023 and 2022 was $ 194 , $ 22 and $ 63 , respectively.

There were no options exercised in fiscal 2021.

The Company issues new shares upon the exercise of stock options.

No stock option expense was recognized during the fiscal years ended December 29, 2023 and December 30, 2022.

No compensation expense related to the Company’s RSAs or stock options has been capitalized.

No stock option expense was recognized during the fiscal years ended December 27, 2024, December 29, 2023 and December 30, 2022.

In connection with the CME acquisition, the Company issued stock awards to certain members of the CME management team which were classified as liabilities.

These awards vest over a period of up to four years .

Stock-based compensation expense for these awards was $ 2,175 and $ 362 during the fiscal years ended December 29, 2023 and December 30, 2022, respectively.

Stock-based compensation expense for these awards was $ 2,175 , $ 2,175 and $ 362 during the fiscal years ended December 27, 2024, December 29, 2023 and December 30, 2022, respectively.

As of December 27, 2024 and December 29, 2023, the fair value of these awards was $ 4,712 and $ 2,537 , respectively, and they are presented within accrued liabilities on the Company’s consolidated balance sheets.

Share Repurchase Program

In November 2023, the Company announced a two-year share repurchase program in an amount up to $ 100,000 .

The remaining share purchase authorization was $ 82,617 at December 27, 2024.

The Company is not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time.

Note 11 – Leases

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Note 12 – Income Taxes

The components of the Company’s income (loss) before income taxes consist of the following:

The components of the Company’s income before income taxes consist of the following:

Fiscal Years Ended

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December 27, 2024 December 29, 2023 December 30, 2022

Current income tax expense (benefit):

Current income tax expense:

Federal $ 13,420 $ 9,913 $ 1,665

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State 6,681 2,014 2,665

Total current income tax expense (benefit) 12,765 4,538 ( 8 )

Total current income tax expense 22,589 12,765 4,538

Deferred income tax expense (benefit):

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State ( 1,075 ) 3,842 34

Total deferred income tax expense (benefit) 8,114 9,601 ( 1,845 )

Total income tax expense (benefit) $ 20,879 $ 14,139 $ ( 1,853 )

The Company’s fiscal 2020 income tax provision reflects the impact of an expected income tax refund receivable of $ 22,966 and $ 21,250 which is reflected in prepaid expenses and other current assets on the Company’s consolidated balance sheets as

of December 29, 2023 and December 30, 2022, respectively, as a result of the five year carryback allowed under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).

Total deferred income tax expense 1,464 8,114 9,601

Total income tax expense $ 24,053 $ 20,879 $ 14,139

The Organization for Economic Co-operation and Development (the “OECD”) introduced a framework under Pillar Two which includes a global corporate minimum tax rate of 15%.

Some jurisdictions in which the Company operates have started to enact laws implementing Pillar Two, including Canada which enacted the rule in June 2024.

The rules did not have a material impact on its consolidated financial statements in fiscal 2024.

The Company is monitoring any future developments.

As a result of a five year carryback allowed under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the Company carried back its 2020 federal income tax loss, which resulted in a income tax refund receivable of $ 25,945 and $ 22,966 as of December 27, 2024 and December 29, 2023, respectively.

The receivable is reflected in prepaid expenses and other current assets on the Company’s consolidated balance sheets.

The IRS is experiencing significant processing delays driven by an increase in net operating loss carryback requests as a result of the CARES Act, along with other factors.

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While progress has been made with the IRS and the Company expects to receive the refunds within one year, the exact timing of receipt is difficult to predict.

Income tax expense (benefit) differed from amounts computed using the statutory federal income tax rate due to the following reasons:

Income tax expense differed from amounts computed using the statutory federal income tax rate due to the following reasons:

Fiscal Years Ended

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Other 1,304 655 ( 418 )

Income tax expense (benefit) $ 20,879 $ 14,139 $ ( 1,853 )

During the third quarter of fiscal 2023, immaterial errors were identified in the calculation of the provision for income tax expense (benefit) for fiscal 2022, 2021 and 2020.

The Company recorded an out of period adjustment of $ 2,135 to the provision for income tax expense in fiscal 2023.

The impact of these errors on prior periods would be to increase the provision for income tax expense by $ 1,308 for fiscal 2022 and to reduce the provision for income tax benefit by $ 719 and $ 108 for fiscal 2021 and 2020, respectively.

Income tax expense $ 24,053 $ 20,879 $ 14,139

Deferred tax assets and liabilities at December 27, 2024 and December 29, 2023 consist of the following:

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The deferred tax provision results from the effects of net changes during the year in deferred tax assets and liabilities arising from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The Company files income tax returns in the U.S.

Federal and various state and local jurisdictions as well as the Canadian Federal and provincial districts.

For Federal income tax purposes, the 2020 through 2023 tax years remain open for examination by the tax authorities under the normal three-year statute of limitations and the fact that we have not yet filed our tax return for 2023.

For state tax purposes, the 2019 through 2023 tax years remain open for examination by the tax authorities under a four-year statute of limitations.

The Company files Federal and various state and local income tax returns in the U.S and various foreign jurisdictions.

For Federal income tax purposes, the 2021 through 2024 tax years remain open for examination.

For state tax purposes, the 2020 through 2024 tax years remain open for examination.

For foreign income tax purposes, the 2014 through 2024 tax years remain open for examination.

The Company records interest and penalties, if any, in income tax expense.

The Company considered all available positive and negative evidence to determine if based on the weight of such evidence, a valuation allowance is needed.

At December 29, 2023, the Company had a valuation allowance of $ 2,119 , which consisted of foreign net operating loss carryforwards as it is not expected to be fully realizable in the future.

The Company’s Canada net operating loss carryforward of $ 2,733 expires at various dates between fiscal 2036 and 2042.

The Company’s state net operating loss carryforwards of $ 687 expire at various dates, the earliest of which expire in fiscal 2026 while others are indefinite-lived.

The Company’s charitable contributions carry forward of $ 2,271 expire between fiscal 2025 and 2027.

The Company’s Canada tax-effected net operating loss carryforward of $ 1,962 expires at various dates between fiscal 2037 and 2043.

The Company’s state tax-effected net operating loss carryforward of $ 1,209 expires at various dates, the earliest of which expire in fiscal 2027, while others are indefinite-lived.

The Company is permanently reinvesting the earnings of its foreign operations.

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As of December 27, 2024 and December 29, 2023, the Company did not have any material uncertain tax positions.

Note 13 – Segment Information

The Company’s business consists of three operating segments:

East, Midwest and West that aggregate into one reportable segment, foodservice distribution, which is concentrated primarily in the United States.

The accounting policies of the foodservice distribution segment are the same as those described in Note 2 – Summary of Significant Accounting Policies.

The Company’s chief operating decision maker, who is the Company’s chief executive officer, uses gross profit as the measure of profit or loss to assess segment performance and allocate resources.

Consolidated gross profit, reported on the statement of operations and comprehensive income, is used to evaluate whether to reinvest profits into the foodservice distribution segment or into other parts of the entity, such as for acquisitions or to repurchase its common shares.

Additionally, gross profit is used to monitor budget versus actual results and in competitive

analysis by benchmarking to the Company’s competitors.

Consolidated total assets, reported on the balance sheet, is the measure of segment assets.

The following table presents information about the Company’s foodservice distribution segment:

Fiscal Years Ended

December 27, 2024 December 29, 2023 December 30, 2022

Net sales $ 3,794,212 $ 3,433,763 $ 2,613,399

Cost of sales - non-production costs (1)

2,805,332 2,550,995 1,954,578

Cost of sales - food processing costs (2)(3)

74,733 68,294 40,185

Cost of sales 2,880,065 2,619,289 1,994,763

Gross profit $ 914,147 $ 814,474 $ 618,636

(1) Non-production costs represent the net purchase price paid for products sold, plus the cost of transportation necessary to bring the product to the Company’s distribution facilities.

Non-production costs include purchase incentives and product purchase credits from certain vendors.

(2) Food processing costs include but are not limited to, direct labor and benefits, applicable overhead and depreciation of equipment and facilities used in food processing activities.

(3) Food processing costs included $ 1,240 , $ 1,466 and $ 1,598 of depreciation expense for the fiscal years ended December 27, 2024, December 29, 2023 and December 30, 2022, respectively.

Note 14 – Supplemental Disclosures of Cash Flow Information

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Employee contributions are fully vested when made.

As a result of the Pandemic, the Company’s matching contributions were temporarily suspended from March 31, 2020 through August 31, 2021.

Under the 401(k) Plan there is no option available to the employee to receive or purchase the Company’s common stock.

Under the 401(k) Plan, participants are not able to receive or purchase the Company’s common stock.

Matching contributions under the 401(k) Plan were $ 4,378 , $ 3,500 and $ 1,714 , respectively, for fiscal 2024, 2023 and 2022.

Note 16 – Related Parties

The Chefs’ Warehouse Mid-Atlantic, LLC, a subsidiary of the Company, leases a distribution facility that is 100 % owned by entities controlled by Christopher Pappas, the Company’s chairman, president and chief executive officer, and John Pappas, the Company’s vice chairman and one of its directors, and are deemed to be affiliates of these individuals.

Expense related to this facility was $ 617 for fiscal 2023 and $ 493 for fiscal 2022 and 2021.

This lease was amended during fiscal 2023 and expires on September 30, 2028.

The Chefs’ Warehouse Mid-Atlantic, LLC, a subsidiary of the Company, leases a distribution facility that is 100 % owned by entities controlled by Christopher Pappas, the Company’s chairman, president and chief executive officer, and John Pappas, the Company’s vice chairman and chief operating officer, and are deemed to be affiliates of these individuals.

Expense related to this facility was $ 705 , $ 617 and $ 493 for fiscal 2024, 2023 and 2022.

The lease expires on September 30, 2028.

Note 17 – Commitments and Contingencies

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Self-insurance reserves for workers’ compensation totaled $ 16,888 and $ 13,285 at December 27, 2024 and December 29, 2023, respectively.

These self-insurance reserves are reflected within accrued liabilities on the Company’s consolidated balance sheets.

As of December 27, 2024, approximately 2.9 % of the Company’s employees are represented by unions, all of whom are operating under collective bargaining agreements which expire at various times between fiscal 2025 and 2027.

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The following tables summarize the activity in our valuation accounts during the fiscal years ended December 27, 2024, December 29, 2023 and December 30, 2022:

Balance at Beginning of Period Additions Charged to Expense Deductions (1) Balance at End of Period

Allowance for doubtful accounts

Balance at Beginning of Period Additions Charged to Expense Deductions (1)

Balance at End of Period

Allowance for credit losses

December 27, 2024 $ 21,423 $ 11,982 $ ( 11,064 ) $ 22,341

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December 30, 2022 20,260 6,048 ( 5,575 ) 20,733

Balance at Beginning of Period Additions Charged to Expense Deductions Balance at End of Period

Allowance for deferred tax assets

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December 30, 2022 2,046 ( 405 ) — 1,641

(1) With respect to the allowance for doubtful accounts, the deductions amount is primarily composed of write-offs, less recoveries which are not material.

(1) With respect to the allowance for credit losses, the deductions amount are primarily composed of write-offs, less recoveries which are not material.

Note 19 – Subsequent Events

On February 25, 2025, the Company’s Board of Directors approved a grant of a total of 416,500 performance-based restricted share units (“PSUs”) to certain of the Company’s officers and employees under the 2019 Plan.

The PSUs, which have a four-year term from the date of grant, are subject to service and performance conditions and will only become vested and payable to the extent that a qualifying change in control occurs during the four-year period.

The awards were granted at fair value, based on the closing price of the stock on the grant date.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk