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Monday, July 30, 2018

-=US Foods (USFD) reported Q2 earnings on Mon 30 July 2018 (b/o)

US Foods misses by $0.01, misses on revs; reaffirms FY18 EPS guidance, lowers FY18 revs guidance below consensus 
  • Reports Q2 (Jun) earnings of $0.57 per share, $0.01 worse than the Capital IQ Consensus of $0.58; revenues were unchanged year/year at $6.16 bln vs the $6.32 bln Capital IQ Consensus.
  • Co issues guidancefor FY18, sees EPS of $2.00-2.10 vs. $2.06 Capital IQ Consensus Estimate; sees FY18 revs of +1-2% YoY to ~$24.40-24.63 vs. $24.87 bln Capital IQ Consensus Estimate. This is below prior revs guidance of $24.87 bln

US Foods to acquire Services Group of America's Food Group of Companies for $1.8 bln(
Headquartered in Scottsdale, Arizona, SGA's Food Group of Companies has combined 2017 net sales of $3.2 billion and approximately 3,400 employees. SGA's Food Group of Companies currently operates as five separate operating companies.
  • US Foods expects to achieve approximately $55 million in annual run-rate cost synergies by the end of fiscal 2022, primarily driven by savings in distribution, procurement and administrative expenses.
  • The purchase price reflects a multiple of 12.5x SGA's Food Group of Companies 2018E Adjusted EBITDA of $123 million, after taking into account the approximately $260 million estimated present value of cash tax benefits to be realized as a result of the acquisition. Including $55 million in annual run-rate synergies, the price reflects a 2018E Adjusted EBITDA multiple of 8.6x.
  • Excluding amortization, the transaction is expected to become accretive to US Foods' Adjusted EPS in the second full year following closing.

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