Page
|
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INDEPENDENT AUDITORS’ REPORT
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1–2
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FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017:
|
|
Combined Balance Sheets
|
3
|
Combined Statements of Earnings
|
4
|
Combined Statements of Comprehensive Income
|
5
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Combined Statements of Members’ Capital
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6
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Combined Statements of Cash Flows
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7
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Notes to Combined Financial Statements
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8–19
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![]() |
![]() |
COMBINED BALANCE SHEETS
AS OF DECEMBER 31, 2018 AND 2017
(Dollars in thousands)
|
ASSETS
|
2018
|
2017 | ||||||
CURRENT ASSETS:
|
|
|
||||||
Cash
|
$
|
17,942
|
$
|
17,161
|
||||
Accounts receivable:
|
||||||||
Trade—Net
|
294,122
|
275,936
|
||||||
Other
|
5,727
|
5,428
|
||||||
Inventories—Net
|
205,585
|
205,678
|
||||||
Prepaid expenses and other current assets
|
14,094
|
11,650
|
||||||
Total current assets
|
537,470
|
515,853
|
||||||
PROPERTY, PLANT AND EQUIPMENT—Net
|
395,081
|
381,254
|
||||||
INTANGIBLE ASSETS—Net
|
141,542
|
146,539
|
||||||
GOODWILL
|
576,456
|
576,456
|
||||||
OTHER ASSETS
|
12,049
|
16,771
|
||||||
TOTAL
|
$
|
1,662,598
|
$
|
1,636,873
|
||||
LIABILITIES AND MEMBERS’ CAPITAL
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Book overdrafts
|
$
|
136,071
|
$
|
138,727
|
||||
Accounts payable
|
234,660
|
232,120
|
||||||
Accrued expenses
|
96,646
|
89,957
|
||||||
Current installments of long-term debt
|
4,096
|
3,921
|
||||||
Total current liabilities
|
471,473
|
464,725
|
||||||
LONG-TERM DEBT—Net of current installments
|
309,729
|
313,825
|
||||||
OTHER LONG-TERM LIABILITIES
|
34,276
|
31,575
|
||||||
DUE TO MEMBERS
|
304,917
|
313,801
|
||||||
MEMBERS’ CAPITAL
|
542,203
|
512,947
|
||||||
TOTAL
|
$
|
1,662,598
|
$
|
1,636,873
|
COMBINED STATEMENTS OF EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(Dollars in thousands)
|
2018
|
2017
|
|||||||
NET SALES
|
$
|
6,125,199
|
$
|
6,025,421
|
||||
COST OF SALES
|
5,290,548
|
5,205,251
|
||||||
GROSS PROFIT
|
834,651
|
820,170
|
||||||
OPERATING EXPENSES:
|
||||||||
Warehouse
|
162,471
|
157,339
|
||||||
Sales and marketing
|
127,500
|
122,843
|
||||||
Delivery
|
300,051
|
286,728
|
||||||
General and administrative
|
130,483
|
133,995
|
||||||
Total operating expenses
|
720,505
|
700,905
|
||||||
OPERATING INCOME
|
114,146
|
119,265
|
||||||
OTHER INCOME (EXPENSE):
|
||||||||
Interest expense
|
(32,932
|
)
|
(31,466
|
)
|
||||
Other income (expense)
|
(119
|
)
|
403
|
|||||
EARNINGS BEFORE INCOME TAX EXPENSE
|
81,095
|
88,202
|
||||||
INCOME TAX EXPENSE
|
60
|
335
|
||||||
NET EARNINGS
|
$
|
81,035
|
$
|
87,867
|
COMBINED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(Dollars in thousands)
|
2018
|
2017
|
|||||||
NET EARNINGS
|
$
|
81,035
|
$
|
87,867
|
||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||
Derivative instruments adjustment
|
(9,434
|
)
|
3,462
|
|||||
COMPREHENSIVE INCOME
|
$
|
71,601
|
$
|
91,329
|
COMBINED STATEMENTS OF MEMBERS’ CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(Dollars in thousands)
|
Members’
Capital
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Total
|
||||||||||
BALANCE—December 31, 2016
|
$
|
467,147
|
$
|
1,304
|
$
|
468,451
|
||||||
Net earnings
|
87,867
|
-
|
87,867
|
|||||||||
Distributions to Members
|
(46,833
|
)
|
-
|
(46,833
|
)
|
|||||||
Other comprehensive income
|
-
|
3,462
|
3,462
|
|||||||||
BALANCE—December 31, 2017
|
508,181
|
4,766
|
512,947
|
|||||||||
Net earnings
|
81,035
|
-
|
81,035
|
|||||||||
Distributions to Members
|
(42,345
|
)
|
-
|
(42,345
|
)
|
|||||||
Other comprehensive loss
|
-
|
(9,434
|
)
|
(9,434
|
)
|
|||||||
BALANCE—December 31, 2018
|
$
|
546,871
|
$ |
(4,668)
|
$
|
542,203
|
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(Dollars in thousands)
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
2018 |
2017 |
||||||
Net earnings
|
$
|
81,035
|
$
|
87,867
|
||||
Adjustments to reconcile net earnings to net cash flows from operating activities:
|
||||||||
Depreciation and amortization
|
50,497
|
48,709
|
||||||
Gain on disposal of long-lived assets
|
(793
|
)
|
(458
|
)
|
||||
Changes in assets and liabilities:
|
||||||||
Trade and other receivables
|
(18,485
|
)
|
(15,686
|
)
|
||||
Inventories
|
93
|
43,401
|
||||||
Prepaid expenses and other assets
|
(2,469
|
)
|
(10,179
|
)
|
||||
Book overdrafts
|
(2,656
|
)
|
(4,555
|
)
|
||||
Accounts payable
|
2,540
|
(3,961
|
)
|
|||||
Accrued expenses and other liabilities
|
4,722
|
(8,689
|
)
|
|||||
Net cash flows from operating activities
|
114,484
|
136,449
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases of property, plant and equipment
|
(59,711
|
)
|
(52,146
|
)
|
||||
Proceeds from sale of long-lived assets
|
1,216
|
1,236
|
||||||
Net cash flows from investing activities
|
(58,495
|
)
|
(50,910
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from issuance of long-term debt
|
-
|
7,539
|
||||||
Payments of long-term debt
|
(3,921
|
)
|
(3,766
|
)
|
||||
Changes in Due to Members
|
(8,884
|
)
|
(38,853
|
)
|
||||
Payments of bank fees
|
(58
|
)
|
-
|
|||||
Distributions to Members
|
(42,345
|
)
|
(46,833
|
)
|
||||
Net cash flows from financing activities
|
(55,208
|
)
|
(81,913
|
)
|
||||
NET INCREASE IN CASH
|
781
|
3,626
|
||||||
CASH—Beginning of year
|
17,161
|
13,535
|
||||||
CASH—End of year
|
$
|
17,942
|
$
|
17,161
|
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
Interest paid
|
$
|
32,933
|
$
|
31,468
|
||||
Taxes paid
|
$
|
60
|
$
|
335
|
NOTES TO COMBINED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(Dollars in thousands, unless otherwise noted)
|
1. |
BUSINESS
|
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Buildings and improvements
|
3–40 years
|
Transportation equipment
|
5–10 years
|
Furniture, fixtures and equipment
|
3–10 years
|
Computer equipment and software
|
3–8 years
|
Fair Value Measurements
|
||||||||||||||||
Assets | 2018 |
Level I |
Level II |
Level III
|
||||||||||||
Deferred compensation plan assets
|
$
|
3,328
|
$
|
3,328
|
$
|
-
|
$
|
-
|
||||||||
Total assets
|
$
|
3,328
|
$
|
3,328
|
$
|
-
|
$
|
-
|
||||||||
Liabilities
|
||||||||||||||||
Deferred compensation plan liabilities
|
$
|
3,328
|
$
|
3,328
|
$
|
-
|
$
|
-
|
||||||||
Derivative instruments
|
4,668
|
-
|
4,668
|
-
|
||||||||||||
Total liabilities | $ | 7,996 |
$ | 3,328 |
$ | 4,668 |
$ | - |
Fair Value Measurements
|
||||||||||||||||
Assets
|
2017
|
Level I
|
Level II
|
Level III
|
||||||||||||
Deferred compensation plan assets
|
$
|
3,547 |
$
|
3,547 |
$
|
- |
$
|
- |
||||||||
Derivative instruments
|
4,766
|
-
|
4,766
|
-
|
||||||||||||
Total assets
|
$
|
8,313
|
$
|
3,547
|
$
|
4,766
|
$
|
-
|
||||||||
Liabilities
|
||||||||||||||||
Deferred compensation plan liabilities
|
$ | 3,547 |
$ | 3,547 |
$ | - |
$ | - |
||||||||
Total liabilities
|
$ | 3,547 |
$ | 3,547 |
$ | - |
$ | - |
3. |
PROPERTY, PLANT AND EQUIPMENT
|
2018 |
2017 |
|||||||
Land and land improvements
|
$
|
33,948
|
$
|
33,829
|
||||
Buildings and improvements
|
264,167
|
276,083
|
||||||
Transportation equipment
|
267,078
|
252,297
|
||||||
Furniture, fixtures and equipment
|
117,532
|
94,041
|
||||||
Computer equipment and software
|
36,627
|
29,801
|
||||||
Construction-in-progress
|
23,817
|
16,308
|
||||||
743,169
|
702,359
|
|||||||
Less—accumulated depreciation
|
348,088
|
321,105
|
||||||
Total
|
$
|
395,081
|
$
|
381,254
|
4. |
GOODWILL AND INTANGIBLE ASSETS
|
2018 | 2017 |
|||||||
Beginning balance
|
$
|
576,456
|
$
|
577,096
|
||||
Adjustment of goodwill
|
-
|
(640
|
)
|
|||||
Ending balance
|
$
|
576,456
|
$
|
576,456
|
Gross Carrying
Amount
|
Accumulated Amortization |
Net Carrying
Amount
|
||||||||||
December 31, 2018 | ||||||||||||
Unamortized intangible assets | ||||||||||||
Trademark
|
$ | 111,000 |
$ | - |
$ | 111,000 |
||||||
Amortized intangible assets | ||||||||||||
Trademark
|
2,100
|
383
|
1,717
|
|||||||||
Customer relationships
|
86,498
|
57,673
|
28,825
|
|||||||||
Ending balance
|
$
|
199,598
|
$
|
58,056
|
$
|
141,542
|
||||||
December 31, 2017
|
||||||||||||
Unamortized intangible assets |
||||||||||||
Trademark
|
$
|
111,000
|
$
|
-
|
$
|
111,000
|
||||||
Amortized intangible assets |
||||||||||||
Trademark
|
2,100
|
239
|
1,861
|
|||||||||
Customer relationships
|
86,498
|
52,820
|
33,678
|
|||||||||
Ending balance | $ | 199,598 |
$ | 53,059 |
$ | 146,539 |
5. |
DEBT OBLIGATIONS
|
2018
|
2017
|
|||||||
Mortgage notes payable, with varying interest at LIBOR plus 2.05% to 2.50%, due in varying monthly installments through May 2025
|
$
|
78,891
|
$
|
82,428
|
||||
Mortgage notes payable, with interest at 4.15%, due in monthly principal and interest installments of $67 through September 2021 and a balloon principal payment of $8,755 due October 2021
|
9,934
|
10,318
|
||||||
Trade receivables-backed facilities
|
225,000
|
225,000
|
||||||
313,825
|
317,746
|
|||||||
Less current installments
|
4,096
|
3,921
|
||||||
Total long-term debt
|
$
|
309,729
|
$
|
313,825
|
Years Ending
December 31
|
Amount
|
|||
2019
|
$
|
4,096
|
||
2020
|
229,266
|
|||
2021
|
28,143
|
|||
2022
|
21,246
|
|||
2023
|
15,065
|
|||
Thereafter
|
16,009
|
|||
Total
|
$
|
313,825
|
6. |
LEASES
|
Years Ending
December 31
|
Amount
|
|||
2019
|
$
|
8,911
|
||
2020
|
7,674
|
|||
2021
|
6,580
|
|||
2022
|
4,322
|
|||
2023
|
4,201
|
|||
Thereafter
|
16,566
|
|||
Total
|
$
|
48,254
|
7. |
EMPLOYEE BENEFIT PLANS
|
8. |
RELATIONSHIP WITH MEMBERS AND RELATED ENTITIES
|
9. |
CONTINGENCIES
|