The Chefs' Warehouse, Inc. 10K 2020 V2

2019 ANNUAL REPORT Dear Stockholders, At The Chefs’ Warehouse we strive to differentiate ourselves through our expansive and high- quality product offerings and unparalleled service and support, creating a very unique competitive position in the food distribution industry. As culinary experts, we are dedicated to supporting all the needs of our chefs and are pleased to serve the finest restaurants, hotels, caterers and gourmet stores in North America. During 2019, we grew our business both through organic sales expansion and strategic acquisition while making key investments in both talent and new markets such as Texas and Los Angeles. In February of 2019 we added the Bassian Farms Team and portfolio of center of the plate brands to our West Coast Division. Later in the year we completed the build-out of our new facility in Dallas and started the process of expanding our capacity in Southern California. In terms of financial performance, we achieved a 10% increase in net sales to $1,592 million from $1,445 million in fiscal 2018. Chefs’ produced strong growth in profitability by delivering 15% year-over-year adjusted EBITDA growth from $77 million in 2018 to $89 million in 2019. Our focus on providing our customers with the highest quality ingredients and product, combined with our efforts to improve efficiency in our high-touch service model, drove improvement in both gross profit margins and operating expense leverage in 2019 as compared to 2018. As always, I would like to express my sincere gratitude to the entire Chefs’ Warehouse team for all their hard work and dedication to excellence this past year. Throughout all of the changes in our operations, our team has remained nimble and dedicated to the superior service that has always been a hallmark of our organization. Of course, I would also like to thank our stockholders for your continued interest in and support of our company. In our 35 years of servicing the world’s greatest chefs, we’ve certainly seen a lot. Our industry, at its heart, is about community. In times of happiness and success, and in more trying times like today, we are committed to being partners to those chefs. We are being diligent about finding creative solutions to support the restaurant industry in the coming months and we will emerge from these trying times stronger than ever. Christopher Pappas Chairman & Chief Executive Officer UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 27, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number: 001-35249 THE CHEFS’ WAREHOUSE, INC. (Exact name of registrant as specified in its charter) Delaware 20-3031526 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 100 East Ridge Road Ridgefield, Connecticut, 06877 (Address of principal executive offices) Registrant’s telephone number, including area code: (203) 894-1345 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 CHEF Nasdaq Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The aggregate market value of the registrant’s common stock held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant’s most recently completed second quarter (June 28, 2019): $892,123,040 Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. Class Outstanding at February 21, 2020 Common Stock, $.01 par value per share 30,307,661 shares DOCUMENTS INCORPORATED BY REFERENCE Document Parts Into Which Incorporated Proxy Statement for the Annual Meeting of Stockholders Part III expected to be held on May 15, 2020 (“Proxy Statement”) Total number of pages: 81 1 THE CHEFS’ WAREHOUSE, INC. INDEX Page Description Number Part I Item 1 Business 5 Item 1A Risk Factors 14 Item 1B Unresolved Staff Comments 27 Item 2 Properties 28 Item 3 Legal Proceedings 28 Item 4 Mine Safety Disclosures 28 Part II Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases 29 of Equity Securities Item 6 Selected Financial Data 31 Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 33 Item 7A Quantitative and Qualitative Disclosures About Market Risk 43 Item 8 Consolidated Financial Statements and Supplementary Data 44 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 72 Item 9A Controls and Procedures 72 Item 9B Other Information 74 Part III Item 10 Directors, Executive Officers and Corporate Governance 74 Item 11 Executive Compensation 74 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder 74 Matters Item 13 Certain Relationships and Related Transactions, and Director Independence 74 Item 14 Principal Accounting Fees and Services 74 Part IV Item 15 Exhibits and Financial Statement Schedules 75 Item 16 Form 10-K Summary 75 Signatures 81 2 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K of The Chefs’ Warehouse, Inc. contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements provide our current expectations or forecasts of future events and are not statements of historical fact. These forward-looking statements include information about possible or assumed future events, including, among other things, discussion and analysis of our future financial condition, results of operations, our strategic plans and objectives, cost management, liquidity and ability to refinance our indebtedness as it matures, anticipated capital expenditures (and access to capital) required to complete projects, amounts of cash distributions to our stockholders in the future, if any, and other matters. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and/or could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect or false. Investors in our common stock are cautioned not to place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or actual operating results. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, the following: • our success depends to a significant extent upon general economic conditions, including disposable income levels and changes in consumer discretionary spending; • a significant portion of our future growth is dependent upon our ability to expand our operations in our existing markets and to penetrate new markets through acquisitions; • we may not achieve the benefits expected from our acquisitions, which

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