Performance Food Group Reports 2004 Net Sales of $6.1 Billion, a 13.5%

Performance Food Group Reports 2004 Net Sales of $6.1 Billion, a 13.5% Increase Adjusted for 53rd Week

    Business Editors

    RICHMOND, Va.--(BUSINESS WIRE)--March 16, 2005--Performance Food Group (Nasdaq:PFGC):

--	Fourth quarter net sales increased to $1.6 billion, a 13% increase adjusted for the Company's 53rd week in fiscal 2003
--	Fourth quarter EPS increased 19% to $0.31 per share diluted, excluding a one-time quarterly charge for the redemption of the Company's outstanding convertible notes

    Performance Food Group (Nasdaq:PFGC) today announced results for the fourth quarter and year ended 2004.
    Net sales for the fourth quarter of 2004 amounted to $1.6 billion, a 6% increase from the year earlier period. Adjusted for the Company's 53rd week in fiscal 2003, which contributed approximately $101 million to sales in the year earlier period, results for the quarter reflect a 13% increase over the prior year period. Inflation for the fourth quarter 2004 was approximately 4%. All of the Company's sales increase represented internal growth. Net earnings for the quarter amounted to $8.5 million, a decline of 30% compared to the prior year period. Net earnings for the quarter reflect the impact of the Company's previously disclosed one-time charge of approximately $10.1 million, or $6.4 million after tax, for the redemption of the Company's outstanding convertible notes. Net earnings for the quarter excluding the one-time charge were approximately $14.9 million, an increase of 22% over the $12.2 million in the same period in the previous year. Quarterly net earnings per share amounted to approximately $0.18 per share diluted. Net earnings per share for the quarter excluding the impact of the one-time charge were approximately $0.31 per share diluted, an increase of 19% versus the year earlier period.
    Net sales for the full year of 2004 amounted to $6.1 billion, an increase of 11% from the prior year period. Adjusted for the Company's 53rd week in fiscal 2003, net sales for the year increased 13.5% over the same period in the previous year. Internal growth represented all of the Company's sales increase for the year. Inflation for 2004 amounted to approximately 5%. Net earnings for the year declined approximately 29% to $52.6 million. Net earnings for the year excluding the impact of the one-time charge amounted to $58.8 million, a decline of 21% versus the $74.2 million in 2003. Net earnings per share diluted declined approximately 28% to $1.11 per share diluted. Net earnings per share diluted excluding the impact of the one-time charge amounted to $1.25 per share diluted, a decline of approximately 19% versus $1.54 in the prior year period.
    Bob Sledd, Chairman and Chief Executive Officer remarked, "We're especially pleased with the efforts of our associates in driving strong internal sales growth in the fourth quarter. The results reflect that our focus on serving our customers is yielding a steady improvement in our business each quarter. We are very pleased that in the fourth quarter, we realized significant operating earnings growth over the prior year period.
    "Sales in the Broadline distribution segment increased approximately 7% in the fourth quarter and 11% for the full year over the same prior year periods. Adjusted for the 53rd week in 2003, which contributed approximately $48 million to sales in the previous year period, Broadline sales increased approximately 15% in the quarter and 13% for the full year. Inflation amounted to approximately 3% in the quarter and 5% for the year. Sales gains in the quarter were the result of previously disclosed new business rollouts, combined with incremental growth through existing customers. The impact of new business rollouts in the quarter contributed to a faster rate of growth in chain business versus street business. For the full year, street sales increased 11% over the prior year, adjusted for the 53rd week in 2003."
    Mr. Sledd added, "In our Customized distribution segment, sales increased approximately 7% in the fourth quarter and 14% for the full year compared to the same periods in the prior year. Adjusted for the 53rd week in 2003, which contributed approximately $38 million to sales in the prior year period, Customized sales grew approximately 16% in the quarter and 17% for the year. Inflation was approximately 6% in both the quarter and the full year. Sales gains in the fourth quarter were driven by continued growth with existing customers. A major focus in the Customized segment during 2005 will be the addition of new capacity throughout the year to position us for growth with new customers in 2006.
    "Our Fresh-cut segment experienced solid fourth quarter sales gains at retail, while overall sales declined approximately 3% in the fourth quarter and increased approximately 6% for the full year compared to the same periods in the prior year, due primarily to our previously disclosed transition away from certain foodservice customers during the past year. Adjusted for the 53rd week in 2003, which contributed approximately $16 million in sales in the prior year period, Fresh-cut sales increased approximately 4% in the quarter and 8% for the year. Inflation was approximately 2% in the quarter and 1% for the year. Our Fresh Express(R) packaged salads continue to gain market share while achieving growth in excess of the retail category growth rate, which remained stable during the quarter. On February 23, 2005, we announced the signing of a definitive agreement for the sale of the Fresh-cut segment to Chiquita Brands International, Inc. for $855 million. We expect the closing of the transaction to be completed during the second quarter of this year. The sale of Fresh-cut provides us the opportunity to focus exclusively on our core Broadline and Customized distribution businesses."
    Mr. Sledd concluded, "Our balance sheet remains strong with a debt to capital ratio of approximately 24% at the end of the fourth quarter, excluding $130 million of interests in accounts receivable sold under an accounts receivable purchase facility. We believe that we have turned the corner in our operating performance and we expect to achieve solid operating earnings improvement in our distribution businesses throughout the year in 2005."

    Performance Food Group markets and distributes more than 65,000 national and private label food and food-related products to approximately 44,000 restaurants, hotels, cafeterias, schools, healthcare facilities and other institutions. The Fresh Express(R) line is the industry leader and pioneer of fresh packaged salads. For more information on Performance Food Group, visit www.pfgc.com.

    Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and are based on current expectations and management's estimates; actual results may differ materially. The risks and uncertainties which could impact these statements include, but are not limited to, general economic conditions; the relatively low margins and economic sensitivity of the foodservice business; the Company's reliance on major customers; the level of demand for the company's fresh-cut products; the possibility that the closing of the sale of the fresh-cut produce operations may not occur because of the failure of the closing conditions to be satisfied; the risk that the results of the Securities and Exchange Commission informal inquiry could have an adverse affect on the Company; the ability to identify and successfully complete acquisitions of other foodservice distributors; the Company's ability to successfully develop, produce and market new products and management of the Company's planned growth, including the Company's ability to successfully manage the transition of its sales mix and related production costs, all as detailed from time to time in the reports filed by the Company with the Securities and Exchange Commission.

Performance Food Group Company Unaudited Financial Highlights

Three Months Ended --------------------------------- Jan. 1, Jan. 3, 2005 2004 --------------- --------------- Net sales $ 1,580,351,000 $ 1,495,489,000 Net earnings $ 8,523,000 $ 12,223,000 Net earnings per share: Basic $ 0.18 $ 0.27 Diluted $ 0.18 $ 0.26 Weighted average number of shares outstanding: Basic 46,748,000 45,841,000 Diluted 47,301,000 47,181,000

Twelve Months Ended --------------------------------- Jan. 1, Jan. 3, 2005 2004 --------------- ---------------

Net sales $ 6,148,923,000 $ 5,519,811,000 Net earnings $ 52,558,000 $ 74,191,000 Net earnings per share: Basic $ 1.13 $ 1.63 Diluted $ 1.11 $ 1.54 Weighted average number of shares outstanding: Basic 46,398,000 45,583,000 Diluted 47,181,000 53,002,000

Performance Food Group Company Condensed Consolidated Balance Sheet and Income Statement (Unaudited) January 1, 2005 (In thousands, except net earnings per common share)

Jan. 1, Jan. 3, Assets 2005 2004 ---------------------------------------------------------------------- Cash and cash equivalents $ 52,322 $ 38,916 Accounts and notes receivable, net, including retained interest in securitized receivables 245,755 242,340 Inventories 314,835 257,198 Other current assets 33,007 43,421 ---------------------------------------------------------------------- Total current assets 645,919 581,875 ---------------------------------------------------------------------- Property, plant and equipment, net 394,701 363,052 Goodwill, net 586,510 582,966 Other intangible assets, net 184,871 196,814 Other assets 15,764 11,761 ---------------------------------------------------------------------- Total assets $1,827,765 $1,736,468 ======================================================================

---------------------------------------------------------------------- Checks in excess of deposits $ 128,079 $ 81,797 Trade accounts payable 267,657 235,392 Current installments of long-term debt 936 1,358 Other current liabilities 164,423 150,377 ---------------------------------------------------------------------- Total current liabilities 561,095 468,924 ---------------------------------------------------------------------- Long-term debt, excluding current installments 278,584 353,919 Deferred income taxes 113,773 109,810 Shareholders' equity 874,313 803,815 ---------------------------------------------------------------------- Total liabilities and shareholders' equity $1,827,765 $1,736,468 ======================================================================

Three Months Ended

Jan. 1, 2005 Jan. 3, 2004 -------------------------------- -------------------------------------

Net sales $1,580,351 100.0% $1,495,489 100.0% Cost of goods sold 1,345,811 85.2% 1,270,679 85.0% -------------------------------- ----------- ------------------ ------ Gross profit 234,540 14.8% 224,810 15.0%

Operating expenses 207,408 13.1% 200,056 13.3% -------------------------------- ----------- ------------------ ------ Operating profit 27,132 1.7% 24,754 1.7% Other income (expense): Interest expense (2,562) (4,664) Loss on sale of receivables (864) (585) Loss on redemption of Convertible Notes (10,127) - Other, net (42) 209 -------------------------------- ----------- ------------------ ------ Other expense, net (13,595) -0.9% (5,040) -0.4% -------------------------------- ----------- ------------------ ------ Earnings before income taxes 13,537 0.8% 19,714 1.3% Income taxes 5,014 0.3% 7,491 0.5% -------------------------------- ----------- ------------------ ------ Net earnings $8,523 0.5% $12,223 0.8% ================================ =========== ================== ======

Weighted average common shares outstanding 46,748 45,841 ================================ =========== ================== ======

Basic net earnings per common share $0.18 $0.27 ================================ =========== ================== ======

Weighted average common shares and dilutive potential common shares outstanding 47,301 47,181 ================================ =========== ================== ======

Diluted net earnings per common share $0.18 $0.26 ================================ =========== ================== ======

Twelve Months Ended

Jan. 1, 2005 Jan. 3, 2004 ----------------------------------------------------------------------

Net sales $6,148,923 100.0% $5,519,811 100.0% Cost of goods sold 5,229,059 85.0% 4,665,275 84.5% -------------------------------------------- ------------------ ------ Gross profit 919,864 15.0% 854,536 15.5%

Operating expenses 806,918 13.2% 715,806 13.0% -------------------------------------------- ------------------ ------ Operating profit 112,946 1.8% 138,730 2.5% Other income (expense): Interest expense (16,829) (19,123) Loss on sale of receivables (2,421) (1,765) Loss on redemption of Convertible Notes (10,127) - Other, net 1,107 1,821 -------------------------------------------- ------------------ ------ Other expense, net (28,270) -0.4% (19,067) -0.3% -------------------------------------------- ------------------ ------ Earnings before income taxes 84,676 1.4% 119,663 2.2% Income taxes 32,118 0.5% 45,472 0.9% -------------------------------------------- ------------------ ------ Net earnings $52,558 0.9% $74,191 1.3% ============================================ ================== ======

Weighted average common shares outstanding 46,398 45,583 ============================================ ================== ======

Basic net earnings per common share $1.13 $1.63 ============================================ ================== ======

Weighted average common shares and dilutive potential common shares outstanding 47,181 53,002 ============================================ ================== ======

Diluted net earnings per common share $1.11 $1.54 ============================================ ================== ======

Performance Food Group Company

2004 Compared to 2003 4th Quarter Segment Disclosure

Corporate & 2004 Broadline Customized Fresh-Cut Intersegment Consolidated ---------------------------------------------------------------------- Fourth Quarter

Net external sales $ 824,754 $ 524,098 $ 231,499 $ - $ 1,580,351 Intersegment sales 199 72 2,574 (2,845) - Total sales 824,953 524,170 234,073 (2,845) 1,580,351 Operating profit 18,879 6,053 8,817 (6,617) 27,132 Operating profit margin 2.29% 1.15% 3.77% - 1.72% Total assets 830,421 176,827 667,556 152,961 1,827,765 Interest expense (income) 3,551 218 5,453 (6,660) 2,562 Loss (gain) on sale of receivables 1,966 623 - (1,725) 864 Depreciation 3,578 1,139 8,001 1,029 13,747 Amortization 910 - 1,107 - 2,017 Capital expenditures 9,098 8,938 6,094 751 24,881

Corporate & 2003 Broadline Customized Fresh-Cut Intersegment Consolidated ---------------------------------------------------------------------- Fourth Quarter

Net external sales $ 767,130 $ 491,599 $ 236,760 $ - $ 1,495,489 Intersegment sales 355 73 3,943 (4,371) - Total sales 767,485 491,672 240,703 (4,371) 1,495,489 Operating profit 17,574 3,194 8,635 (4,649) 24,754 Operating profit margin 2.29% 0.65% 3.59% - 1.66% Total assets 795,566 147,233 667,698 125,971 1,736,468 Interest expense (income) 3,148 85 4,892 (3,461) 4,664 Loss (gain) on sale of receivables 1,624 563 - (1,602) 585 Depreciation 3,558 1,033 6,322 643 11,556 Amortization 977 - 1,131 - 2,108 Capital expenditures 21,219 2,394 18,906 791 43,310

Performance Food Group Company

2004 Compared to 2003 Year-To-Date Segment Disclosure

Corporate & 2004 Broadline Customized Fresh-Cut Intersegment Consolidated ---------------------------------------------------------------------- Year-to-Date

Net external sales $3,120,500 $2,052,578 $975,845 $ - $ 6,148,923 Intersegment sales 806 302 13,197 (14,305) - Total sales 3,121,306 2,052,880 989,042 (14,305) 6,148,923 Operating profit 70,196 21,538 49,266 (28,054) 112,946 Operating profit margin 2.25% 1.05% 4.98% - 1.84% Total assets 830,421 176,827 667,556 152,961 1,827,765 Interest expense (income) 12,366 747 19,741 (16,025) 16,829 Loss (gain) on sale of receivables 7,845 2,596 - (8,020) 2,421 Depreciation 13,457 4,355 29,212 3,558 50,582 Amortization 3,626 - 4,491 - 8,117 Capital expenditures 15,089 20,770 42,836 4,776 83,471

Corporate & 2003 Broadline Customized Fresh-Cut Intersegment Consolidated ---------------------------------------------------------------------- Year-to-Date

Net external sales $2,804,921 $1,797,871 $917,019 $ - $ 5,519,811 Intersegment sales 1,056 348 16,352 (17,756) - Total sales 2,805,977 1,798,219 933,371 (17,756) 5,519,811 Operating profit 69,664 19,704 66,405 (17,043) 138,730 Operating profit margin 2.48% 1.10% 7.11% - 2.51% Total assets 795,566 147,233 667,698 125,971 1,736,468 Interest expense (income) 13,599 325 19,057 (13,858) 19,123 Loss (gain) on sale of receivables 5,674 2,182 - (6,091) 1,765 Depreciation 14,038 3,741 22,998 2,134 42,911 Amortization 3,793 - 4,525 - 8,318 Capital expenditures 32,250 21,577 55,846 3,146 112,819

Impact of 53rd Week Sales Reconciliation by Segment (amounts in thousands) ---------------------------------------------------------------------- 2004 Q4 ----------------------------------------------------------------------

2004 Sales 2003 Sales % Increase/ Q4 Q4 (Decrease) ----------------------------------- Broadline Net Sales as reported (including 2003 53rd week) $824,953 $767,485 7% Less: 53rd week sales in 2003 - (47,682) - ----------- ----------- ----------- Adjusted Net Sales without 53rd week in 2003 824,953 719,803 15%

Customized Net Sales as reported (including 2003 53rd week) 524,170 491,672 7% Less: 53rd week sales in 2003 - (38,100) - ----------- ----------- ----------- Adjusted Net Sales without 53rd week in 2003 524,170 453,572 16%

Fresh-cut Net Sales as reported (including 2003 53rd week) 234,073 240,703 -3% Less: 53rd week sales in 2003 - (15,669) - ----------- ----------- ----------- Adjusted Net Sales without 53rd week in 2003 234,073 225,034 4%

Consolidated Net Sales as reported (including 2003 53rd week) 1,580,351 1,495,489 6% Less: 53rd week sales in 2003 - (101,149) - ----------- ----------- ----------- Adjusted Net Sales without 53rd week in 2003 $1,580,351 $1,394,340 13% ----------------------------------------------------------------------

---------------------------------------------------------------------- 2004 Full Year ----------------------------------------------------------------------

2004 Sales 2003 Sales % Increase/ Full Year Full Year (Decrease) ----------------------------------- Broadline Net Sales as reported (including 2003 53rd week) $3,121,306 $2,805,977 11% Less: 53rd week sales in 2003 - (47,682) - ----------- ----------- ----------- Adjusted Net Sales without 53rd week in 2003 3,121,306 2,758,295 13%

Customized Net Sales as reported (including 2003 53rd week) 2,052,880 1,798,219 14% Less: 53rd week sales in 2003 - (38,100) - ----------- ----------- ----------- Adjusted Net Sales without 53rd week in 2003 2,052,880 1,760,119 17%

Fresh-cut Net Sales as reported (including 2003 53rd week) 989,042 933,371 6% Less: 53rd week sales in 2003 - (15,669) - ----------- ----------- ----------- Adjusted Net Sales without 53rd week in 2003 989,042 917,702 8%

Consolidated Net Sales as reported (including 2003 53rd week) 6,148,923 5,519,811 11% Less: 53rd week sales in 2003 - (101,149) - ----------- ----------- ----------- Adjusted Net Sales without 53rd week in 2003 $6,148,923 $5,418,662 13.5% ----------------------------------------------------------------------

EPS Reconciliation for Impact of Convertible Notes Redemption (amounts in thousands, except per share data)

4th Quarter 2004 Net Shares EPS Earnings ------------------------ Diluted EPS, as reported $8,523 47,301 $0.18 Add: After-tax impact of Convertible Notes redemption (utilizing Q4 effective tax rate of 37.04%) 6,375 - --------- ------- ------ Adjusted Diluted EPS, without redemption of notes $14,898 47,301 $0.31

Note: Interest on convertible notes was antidilutive for Q4 2004, therefore no presentation of assumed conversion is necessary.

Full year 2004 Net Shares EPS Earnings ------------------------ Diluted EPS, as reported $52,558 47,181 $1.11 Add: After-tax impact of Convertible Notes redemption (utilizing full year effective tax rate of 37.93%) 6,285 - --------- ------- ------ Adjusted Diluted EPS, without redemption of notes 58,843 47,181 1.25 Interest on Convertible Notes, net of tax 5,943 4,850 --------- ------- ------ Adjusted Diluted EPS after assumed conversion of notes $64,786 52,031 $1.25

--30--EL/sf*

CONTACT: Performance Food Group Cheryl Moore, 804-484-6273 (Media) Kevin Collier, 804-287-8109 (Investor)

KEYWORD: VIRGINIA INDUSTRY KEYWORD: FOODS/BEVERAGES RETAIL EARNINGS SOURCE: Performance Food Group

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