What changed in this filing

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Item 1. Business

2024-02-15 compared with 2023-02-17 · 57 added, 39 removed, 243 unchanged (28% of the section changed)

12 unchanged sentences

These customer locations include independent restaurants, chain restaurants, healthcare, hospitality, education and other customers.

We provide more than 400,000 fresh, frozen, and dry food stock-keeping units, or SKUs, as well as non-food items, sourced from approximately 6,000 suppliers.

We provide fresh, frozen, and dry food products, as well as non-food items, sourced from thousands of suppliers.

Approximately 4,000 sales associates manage customer relationships at local, regional, and national levels.

Our sales associates are supported by sophisticated marketing and category management capabilities, as well as a sales support team that includes world-class chefs and restaurant operations consultants, new business development managers and others that help us provide more comprehensive service to our customers.

Our extensive network of 70 distribution facilities and fleet of approximately 6,500 trucks, along with 86 cash and carry locations, allow us to operate efficiently and provide high levels of customer service.

Our extensive network of over 70 distribution facilities and fleet of over 6,500 trucks, along with approximately 90 cash and carry locations, allow us to operate efficiently and provide high levels of customer service.

This operating model allows us to leverage our nationwide scale and footprint while executing locally.

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In fiscal year 2023, no single customer represented more than 2% of our total customer sales.

Sales to our top 50 customers/GPOs represented approximately 43% of our net sales in fiscal year 2022.

We have entered into contractual relationships with certain group purchasing organizations (“GPOs”) that negotiate pricing, delivery and other terms on behalf of their members.

In fiscal year 2022, GPO members accounted for approximately 21% of our net sales.

GPO members are primarily comprised of customers in the healthcare, hospitality, education, and government/military industries.

Sales to our top 50 customers, including group purchasing organizations (“GPOs”), represented approximately 44% of our net sales in fiscal year 2023.

We have entered into contractual relationships with certain GPOs that negotiate pricing, delivery and other terms on behalf of their members.

In fiscal year 2023, GPOs accounted for approximately 23% of our net sales.

GPOs are primarily comprised of customers in the healthcare, hospitality, education, and government/military industries.

There are several important dynamics affecting the industry, including:

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In addition, many ethnic food offerings are becoming more mainstream as consumers show a greater willingness to try new flavors and cuisines.

Changes in consumer preferences create opportunities for new and innovative products and for unique food- away-from-home destinations.

Changes in consumer preferences create opportunities for new and innovative products and for unique food-

away-from-home destinations.

This, in turn, is expected to create growth, expand margins, and produce better customer retention opportunities for those distributors with the flexibility to balance national scale and local preferences.

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Given their purchasing power and diverse taste profiles, Millennials, Generation Z and Baby Boomers will continue to significantly influence food consumption and the food away from home market.

According to recent U.S.

According to U.S.

Census Bureau statistics, there were 89 million individuals born between 1982 and 2002 in the U.S., making Millennials and Generation Z the largest demographic cohorts.

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We see significant continued growth being driven by the increased utilization of, and reliance on technology by foodservice distributors, customers and diners.

E-commerce solutions streamline the purchasing process and increase customer retention.

Digital solutions streamline the purchasing process and increase customer retention.

They also deepen the relationship between foodservice distributors and customers, creating personalized insights and services that can make both more efficient.

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These offerings are supported with technology and expertise that make it easier to transact with us and run their businesses.

Our mobile technology platform provides customers with a personalized e-commerce ordering experience and easy-to-use business analytics tools.

Our mobile technology platform provides customers with a personalized digital ordering experience and easy-to-use business analytics tools.

Our portfolio of value-added services helps customers address key pain points like food waste, back-of-house operations and diner traffic.

By delivering our products and services through a differentiated team-based selling approach, we provide customers access to a diverse team of experts including chefs, center-of-the-plate and produce specialists and restaurant operations consultants.

Approximately 80% of our customers utilize our e-commerce solutions.

More than 80% of our sales utilize our digital solutions.

Customers utilizing these solutions tend to purchase more products and have stronger commercial relationships with us.

1 unchanged sentence

We have 90 cash and carry locations to provide more customers with a retail option in between deliveries and to cost effectively serve more price-conscious and smaller customers.

The cash and carry offering was significantly enhanced by our acquisition in 2020 of Smart Foodservice (as described below).

In addition, US Foods Direct™ more than doubles our product assortment and provides customers with access to thousands of specialty products which ship directly to them from the supplier.

More recently, we expanded our US Foods Pronto™ service in select markets to let restaurant operators receive smaller orders more frequently.

Our US Foods Direct™ service more than doubles our product assortment and provides customers with access to thousands of specialty products which ship directly to them from the supplier.

Additionally, US Foods Pronto™ service allows restaurant operators to receive smaller orders more frequently.

All of these channels provide our customers options to shop their way.

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Acquisitions have also historically played an important role in supporting the execution of our growth strategy.

On April 24, 2020, USF completed the acquisition of Smart Stores Holding Corp., a Delaware corporation (“Smart Foodservice”), from funds managed by affiliates of Apollo Global Management, Inc.

for $972 million.

Smart Foodservice is a company that operated 70 small-format cash and carry stores across California, Idaho, Montana, Nevada, Oregon, Utah and Washington, serving small and mid-sized restaurants and other food business customers with a broad assortment of products.

Integrating Smart Foodservice and realizing synergies from acquisitions are key priorities for the Company.

Following the completion of the Smart Foodservice acquisition, we have prioritized deleveraging our balance sheet, however we may selectively pursue acquisition opportunities in the future if they are aligned with and enhance our strategic priorities.

On July 7, 2023, USF completed the acquisition of Renzi Foodservice (“Renzi”), a broadline distributor in New York, for a purchase price of $142 million (less the amount of the post-closing working capital adjustment, which was $2 million).

The acquisition allows US Foods to further expand its reach into central upstate New York.

On December 1, 2023, USF completed the acquisition of Saladino’s Foodservice (“Saladino’s”), a broadline distributor in California, for a purchase price of $56 million.

The acquisition allows US Foods to further expand its reach into California.

Integrating the above acquisitions and realizing synergies from these acquisitions are key priorities for the Company.

The Company will selectively pursue acquisition opportunities in the future if they are aligned with and enhance our strategic priorities.

Products and Brands

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We do not have any patents or licenses that are material to our business.

We purchase from approximately 6,000 individual suppliers, none of which accounted for more than 5% of our aggregate purchases in fiscal year 2022.

Our suppliers generally are large corporations selling national brand name and private brand products.

Additionally, regional and local suppliers support targeted geographic initiatives and private label programs requiring regional and local distribution.

We purchase from thousands of suppliers, with no suppliers accounting for more than 5% of our aggregate purchases in fiscal year 2023.

Our business does not fluctuate significantly from quarter to quarter and, as a result, is not considered seasonal.

3 unchanged sentences

Product Distribution

We are subject to various laws and regulations relating to the manufacturing, processing, handling, storage, transportation, sale, advertising and labeling of food products, including the applicable provisions of the Federal Food, Drug and Cosmetic Act, Bioterrorism Act, Food Safety Modernization Act, Federal Meat Inspection Act, Poultry Products Inspection Act, Perishable Agricultural Commodities Act, Country of Origin Labeling Act, regulations issued by the U.S.

Food and Drug Administration (“FDA”) and the U.S.

Bioterrorism Act;

Food Safety Modernization Act;

Federal Meat Inspection Act;

Poultry Products Inspection Act;

Perishable Agricultural Commodities Act;

Country of Origin Labeling Act;

regulations issued by the U.S.

Food and Drug Administration

(“FDA”) and the U.S.

Department of Agriculture (“USDA”), and other federal, state and local laws and regulations relating to our operations and products that could restrict the sale of certain products or result in enforcement actions by federal, state and local government agencies under applicable standards.

63 unchanged sentences

• Supporting diverse communities and businesses by enhancing our outreach and sharing who we are and what we stand for.

We continue to cultivate a culture of inclusion through training programs for our leaders and associates and by sponsoring nine Employee Resource Groups (“ERGs”):

We continue to cultivate a culture of inclusion through training programs for our leaders and associates and by sponsoring ten Employee Resource Groups (“ERGs”):

ADAPT - Ability and Disability Allies Partnering Together;

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Multigenerational Empowerment Resource Group for Employees;

PACT - Parents and Caregivers Together;

Pride Alliance;

13 unchanged sentences

Flitman 59 Chief Executive Officer

56 Executive Vice President, Chief Transition Officer

51 Executive Vice President, Chief Financial Officer

58 Executive Vice President, Nationally Managed Business

Martha Ha 58 Executive Vice President, General Counsel and Corporate Secretary

59 Executive Vice President, Nationally Managed Business & Chief Transformation Officer

Hancock 44 Executive Vice President, Chief Supply Chain Officer

55 Executive Vice President, Field Operations

David Poe 50 Executive Vice President, Chief Merchandising Officer

Taylor 51 Executive Vice President, Field Operations and Local Sales

53 Executive Vice President, Strategy and Revenue Management

17 unchanged sentences

Flitman spent nearly twenty years in operational, commercial, and global business leadership positions at DuPont de Nemours, Inc.

Since July 2017, Mr.

Flitman has also served as a member of the board of directors of Veritiv Corporation, where he serves as the Chair of the Compensation and Leadership Development Committee.

Iacobucci has served as Executive Vice President, Chief Transition Officer since January 2023.

Iacobucci served as the Interim Chief Executive Officer from May 2022 to January 2023, Chief Commercial Officer from February 2021 through May 2022 and Chief Merchandising Officer from January 2017 to February 2021.

Prior to joining US Foods, Mr.

Iacobucci served as Executive Vice President, Merchandising of Ahold USA, Inc., a food retailer, from April 2016 to January 2017.

Prior to joining Ahold, he served from February 2012 to November 2015 in several senior roles at Loblaw Companies Limited, a Canadian grocery retailer and wholesale food distributor, including President, Discount Division.

From July 2017 until November 2023, Mr.

Flitman served as a member of the board of directors of Veritiv Corporation, where he served as the Chair of the Compensation and Leadership Development Committee.

Locascio has served as Executive Vice President, Chief Financial Officer since February 2017.

3 unchanged sentences

Locascio held senior finance roles with United Airlines, a global airline, and Arthur Andersen LLP, a public accounting firm.

Guberman has served as Executive Vice President, Nationally Managed Business since August 2016.

Ha has served as Executive Vice President and General Counsel since September 2023 and Corporate Secretary since November 2023.

Prior to joining US Foods, Ms.

Ha served as Vice President, Chief Counsel - Corporate Governance, Mergers and Acquisitions and Cardiovascular Portfolio for Medtronic PLC from September 2016 to September 2023, where she was responsible for all corporate governance and securities matters, including ESG strategy and disclosures, shareholder and Board of Director matters and U.S.

and Irish public company fillings and disclosures.

Prior to joining Medtronic, she served as Vice President, Corporate Secretary and General Counsel - Corporate and International for DaVita Health Care Partners, Inc., where she spent nearly 5 years, from November 2011 to September 2016.

Prior to joining DaVita, she served as Vice President, Corporate Secretary and Deputy General Counsel at W.W.

Grainger, Inc until November 2011 and before joining Grainger, she was Associate General Counsel at Baxter Healthcare Corporation for over 9 years from January 2002 until June 2011.

Prior to joining Baxter Healthcare, Ms.

Ha was an attorney in the Office of the General Counsel at Arthur Andersen LLP and a partner at Bell, Boyd & Lloyd law firm.

Guberman has served as Executive Vice President, Nationally Managed Business since August 2016 and as Chief Transformation Officer since May 2023.

Guberman served the Company as Chief Merchandising Officer from July 2015 to January 2017, Senior Vice President, Merchandising and Marketing Operations from January 2012 to July 2015 and Division President from August 2004 to December 2011.

4 unchanged sentences

Prior to joining American Tire Distributors, he served as Vice President of Global Supply Chain Operations for Target, where he spent 14 years, from 2003 to 2017, in various supply chain roles with the company.

Kvasnicka has served as Executive Vice President, Field Operations since February 2021.

He served the Company as Interim Chief Supply Chain Officer from October 2019 through March 2021, Executive Vice President, Locally Managed Business and Field Operations from September 2016 to February 2021, Executive Vice President, Locally Managed Sales from August 2015 to September 2016, Region President from April 2013 to July 2015 and Division President from October 2011 to March 2013.

Kvasnicka served the Company as Vice President of Sales for the Stock Yards division, President of the Stock Yards division and in various other roles between 2005 and 2011.

He was Vice President of Sales for the Minneapolis Division from 2003 to 2005.

Kvasnicka joined US Foods in 1995, originally as part of Alliant Foodservice.

Poe has served as Executive Vice President, Chief Merchandising Officer since October 2023.

Poe served the Company as Senior Vice President, Chief Merchant from March 2023 to October 2023, Senior Vice President of Category Management from October 2016 to March 2023 and Vice President of Category Management from December 2015 to March 2023.

Prior to joining US Foods, Mr.

Poe served as Vice President of Sourcing of Premier Inc.

from March 2014 to December 2015, where he was responsible for leading foodservice sourcing efforts.

Prior to joining Premier Inc, he served as Vice President of Category Management for US Foods from November 2013 to March 2014.

Taylor has served as Executive Vice President, Field Operations and Local Sales since October 2023.

Taylor served the Company as Executive Vice President, Field Operations from May 2023 to October 2023, Region President - Southeast from September 2016 to May 2023, Senior Vice President, Field Operations Deployment from August 2015 to September 2016, Division President from April 2010 to August 2015, Senior Vice President from January 2010 to April 2010 and Vice President, Finance from September 2005 to January 2010.

Rickard has served as Executive Vice President, Strategy and Revenue Management, since November 2015.

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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 1. Business