Greetings, and welcome to The Chefs' Warehouse first quarter 2022 earnings conference call. A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Alex Aldous, General Counsel, Corporate Secretary, and Chief Government Relations Officer. Please go ahead, sir.
Thank you, operator. Good morning, everyone. With me on today's call are Chris Pappas, Founder, Chairman, and CEO, and Jim Leddy, our CFO. By now, you should have access to our first quarter 2022 earnings press release. It can also be found at www.chefswarehouse.com under the Investor Relations section. Throughout this conference call, we will be presenting non-GAAP financial measures, including among others, historical and estimated EBITDA and adjusted EBITDA, as well as both historical and estimated adjusted net income and adjusted earnings per share. These measurements are not calculated in accordance with GAAP and may be calculated differently in similarly titled non-GAAP financial measures used by other companies. Quantitative reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures appear in today's press release.
Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements, including statements regarding our estimated financial performance. Such forward-looking statements are not guarantees of future performance, and therefore you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Some of these risks are mentioned in today's release. Others are discussed in our annual report on Form 10-K and quarterly reports on Form 10-Q, which are available on the SEC website. Today, we are going to provide a business update and go over our first quarter results in detail. Then we will open up the call for questions. With that, I will turn the call over to Chris Pappas. Chris?
Thank you, Alex, and thank you all for joining our first quarter 2022 earnings call. As expected, 2022 started off with seasonally moderate business activity in January, which was also slightly impacted by the Omicron variant. Revenue trends grew steadily in February and March across our markets as consumer demand for dining out continued to show strength. Moderately improving labor markets facilitated new customer openings and increased restaurant capacity. This combined with milder winter weather in the Northeast contributed to weekly sequential sales improvements heading into quarter end. A few highlights from the first quarter as compared to the first quarter of 2021 include 62.9% organic growth in net sales. Specialty sales were up 70.3% organically over prior year, which was driven by unique customer growth of approximately 29.4%.
Placement growth of 41.6% and specialty case growth of 47.3%. Organic pounds in center of the plate were approximately 26% higher than the prior year first quarter. Gross profit margins increased approximately 191 basis points. Gross margin in the specialty category increased 213 basis points as compared to the first quarter of 2021, while gross margin in the center of the plate category increased 111 basis points year over year. Jim will provide more details on gross profit and margins in a few moments. In April, our team completed a number of key projects that will contribute to our future growth and profitability in the coming months and years. On the distribution center front, we completed the retrofit of our new 230,000 sq ft facility in Southern California.
We have begun the process of moving in and expect to be fully operational in May. This facility will combine specialty and produce operations with meat and seafood processing capability within the same footprint. Our new South Florida distribution center will operate with a similar design, and we expect to begin operations in the third quarter of this year. On the technology and digital front, we introduced our new Chef's Warehouse website and mobile app to a select group of customers, and we will go live with a full scale rollout over the next few weeks. This digital platform provides an improved online experience for customers as well as enhanced data analytics and tools for our teams focused on driving sales and customer satisfaction. I would like to thank our team members, our customers and our supplier partners for contributing to a successful start to 2022.
All of the Chef's Warehouse stakeholders have been key players in our ability to navigate the fluid dynamics coming out of COVID, including supply chain challenges, volatile food inflation, and an ever-evolving labor environment. I'm grateful to all the people who make up Chef's Warehouse and their ability to add key talent and partners, and at the same time, continue to strengthen our position in the industry. We are proud to announce that we have recently been certified by the renowned independent survey company,Great Place To Work . They are a global authority on workplace culture and deploy a rigorous methodology to gather and evaluate employee feedback.
Focused on identifying companies who have built high trust and high performing cultures. We have never been stronger, more focused or more excited about our future. We look forward to performing as the leading national marketer and distributor of specialty food products to the chef-driven customer base that continues to grow with The Chefs' Warehouse. With that, I'll turn it over to Jim to discuss more detailed financial information for the quarter and an update on our liquidity. Jim.
Thank you, Chris, and good morning, everyone. I'll now provide a comparison of our current quarter operating results versus the prior year quarter and provide an update on our balance sheet and liquidity. Our net sales for the quarter ended March 25, 2022 increased approximately 82.8% to 512.1 million from 280.2 million in the first quarter of 2021. The growth in net sales was a result of an increase in organic sales of approximately 62.9%, as well as the contribution of sales from acquisitions, which added approximately 19.9% to sales growth for the quarter.
Net inflation was 21.7% in the first quarter, consisting of 14.9% inflation in our specialty category and inflation of 28.5% in our center of the plate category versus the prior year quarter. Gross profit increased 99.4% to 117.5 million for the first quarter of 2022 versus 58.9 million for the first quarter of 2021. Gross profit margins increased approximately 191 basis points to 22.9%. Year-over-year inflation was broad based across all specialty and center of the plate categories. Selling, general and administrative expenses increased approximately 37.2% to 110.1 million for the first quarter of 2022 from 80.2 million for the first quarter of 2021.
The primary drivers of higher expenses were higher compensation and distribution costs associated with year-over-year volume growth, route expansion, and increased fuel costs. Adjusted operating expenses increased 40.4% versus the prior year first quarter. As a percentage of net sales, adjusted operating expenses were 18.8% for the first quarter of 2022, compared to 24.4% for the first quarter of 2021. Operating income for the first quarter of 2022 was 6.3 million, compared to an operating loss of 20.1 million for the first quarter of 2021. The increase in operating income was driven primarily by higher gross profit, partially offset by higher operating costs.
Income tax expense was 0.5 million for the first quarter of 2022, compared to income tax benefit of 7 million for the first quarter of 2021. Our GAAP net income was 1.4 million or 0.04 income per diluted share for the first quarter of 2022, compared to a net loss of 17.9 million or 0.49 loss per diluted share for the first quarter of 2021. On a non-GAAP basis, we had positive adjusted EBITDA of 21.5 million for the first quarter of 2022, compared to negative adjusted EBITDA of 9.5 million for the prior year first quarter.
Adjusted net income was 3.6 million or 0.10 income per diluted share for the first quarter of 2022, compared to adjusted net loss of 17.1 million or 0.50 loss per diluted share for the prior year first quarter. Turning to the balance sheet and an update on our liquidity. At the end of the first quarter, we had total liquidity of $205.6 million, comprised of 79.4 million in cash and 126.2 million of availability under our ABL facility. As of March 25th, 2022, net debt was approximately 319.1 million, inclusive of all cash and cash equivalents. Turning to our guidance for 2022.
Based on the current trends in the business, we are updating and raising our financial guidance to be as follows. We estimate the net sales for the full year of 2022 will be in the range of 2.13 billion-2.23 billion. Gross profit to be between 500 million-524 million, and adjusted EBITDA to be between 103 million-112 million. Our full year estimated diluted share count is approximately 42.5 million shares. We currently expect our senior unsecured convertible notes to be diluted for the full year, and accordingly, those shares that could be issued upon conversion of the notes are included in the fully diluted share count. Thank you. At this point, we will open it up to questions. Operator.
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit yourself to one question and one follow-up question. One moment, please, while we poll for your question. Our first question comes from the line of Alex Slagle with Jefferies. Please proceed with your questions.
Thank you. Good morning.
Good morning, Alex.
Just looking at the full year revenue guidance assumes, I guess, the remaining three quarters of the year make up 76% or 77% of the total. At the midpoint seems a little conservative given how demand trended to start the year. Curious if your assumptions consider some choppiness in the back half or if there's anything one-time in nature that elevated the first quarter, which doesn't look to be the case.
No, thanks for the question, Alex. Yeah, the guidance raise mainly reflects the strength we saw in the first quarter. I think certainly trends right now would be towards the upper end of our guidance. You know, but I think given that it's just the first quarter, we're just a few quarters out of COVID, and there seems to be some uncertainty in from a macro perspective in the markets and in commentary around the economy. We're just erring a little bit on the conservative side. I would say that recent trends are consistent with what we saw in February and March. That's really what's reflected in the guidance right now.
Makes sense. On the labor front, if you could just help us understand where you are in terms of hiring versus where you wanna be, and if there's any measurable level of productivity impact on your margins that you think kind of goes away in the second quarter or third quarter?
Yeah. Well, I mean, the labor market, you know, continues to be challenging. I think our team has done a, you know, phenomenal job to get us where we are right now. Optimistically, I think it has gotten better. I would think it would continue to slowly get better. We have the team to service our customers and we expect, like Jim said, the whole macro global issues of the world, we can't control and we can't forecast. Business was very strong in March and April, continues to be very strong, and we continue to hire.
I think, you know, having a talent officer and having, you know, teams that I work with very closely, it's the number one focus really is making sure that, you know, we're able to hire the best available talent out there. I think the team has done a phenomenal job doing that, and I would expect it to continue.
All right. Thanks.
Thank you.
Thank you. Our next question has come from the line of Peter Saleh with BTIG. Please proceed with your question.
Great. Thanks, and good morning, and congrats on a great quarter. I wanted to ask about the business spending, if you guys have any sense on how that's performing kind of year-over-year and, maybe any sort of regionality that you're seeing, along those lines on business spending.
When you say business spending, Peter, you mean, businesses out spending in restaurants?
No. Maybe just more corporate events, you know, call it conferences and dinners out. If you guys have any sense on how that's been performing? We had expected that to really start to kick into gear, especially into March.
Yeah. I think it's obviously contributing to our good quarter, but I still think it's in, you know, the first inning. You know, what we're hearing from customers is that people are starting to book. You know, there are places I know you can't get a wedding on a weekend, you know, until 2024. You know, that's a great sign. I mean, I think when, you know, a few months into the pandemic, we thought that there'd be a cure, there'd be an end date, and then it'd be the biggest party ever. That unfortunately didn't happen. This thing keeps dragging on and you get waves. I think people, you know, feel comfortable right now with as comfortable as you can, right?
With all the therapeutics and hospitals and doctors learning how to deal with this. Hopefully we don't get a more serious variant. It seems like life is normalizing. I mean, what we're seeing is from our country clubs and our caterers and people aren't back in the office full-time, but it's starting to get there. We are anywhere from 30%-50%. We're extremely optimistic, cautiously optimistic, though. I think that's part of the conundrum right now is that we see strong demand. We see a lot of customers coming back, our customer counts going up. The weakest sector is probably still the corporate side of caterers. People are not back in the office full-time, so that business.
I think a lot of that is transferring out to local restaurants, so we're benefiting from that. I think we're prepared for, you know, dining to come back and events to come back. I think slower is a little better allowing labor to come back as well. We have real positive signs from Vegas and, you know, places like Miami that, you know, slowed down but never closed. We see the hotels there extremely busy. It seems like it's just picking up steam, and hopefully, you know, nothing derails it.
Great. Good to hear. Chris, I think on your prepared remarks, you had mentioned maybe a modest improvement in labor and you're seeing more restaurant openings. Can you elaborate on that? Maybe where are you seeing some of these restaurant openings? Is this kind of broad-based? Is it more regional? Just maybe the magnitude would be helpful. Thank you.
Sure. I think it is broad-based. I think, you know, many restaurants, depending on where they were and the type of restaurants, really never opened. Finally, we're starting to see many of those restaurants starting to open, you know, from March of 2020. Tremendous amount of green shoots, you know. I think I said, over a year or so ago, you know, any good location is gonna be taken by a good operator, you know, especially if they can get a deal where, you know, they don't have to build a whole infrastructure of restaurants, mainly cosmetic.
We're starting to see a lot of those leases turn, a lot of those restaurants start to open, and just the book of openings coming from, you know, our thousands of customers that we have. It just shows optimism. It shows that, you know, they expect business to continue to improve. I think it's spread out, Peter. I mean, I think the places that are still probably the slowest to come back is, you know, the midtowns of some of the major cities where they still don't have the volume. You know, thank God, you know, for New York, the theater industry pulls so many people in. We're hearing about tourists coming back again.
A lot of our clients in the theater district are doing record numbers more than 2019, which shows you kind of the demand is there for people to get back and start enjoying themselves in the city. I think it's pretty spread out.
Great. Thank you very much. I'll pass it along.
Thank you.
Thank you. Our next question has come from the line of Andrew Wolf with CL King. Please proceed with your questions.
Thanks, good morning as well. Can we talk about some of the inflation trends out there, both in terms of product costs, maybe you can talk about them by your two major divisions, and also labor, you know. Any signs of normalization, maybe even sequentially? Like, it looks like maybe the beef market sequentially has stopped inflating. Any, you know, just how you're feeling about, you know, Jim, as you alluded to with a slightly conservative guidance, how you're feeling about those trends as you know, you create guidance and think about the business.
Yeah, sure. You know, we mentioned when we reported in February, thanks for the question, Andy, you know, that we kinda built in on average, you know, moderate deflation versus the third quarter and fourth quarter price environment that we saw in 2021. Sequentially, what we saw in the first quarter was kind of what we expected on the center of the plate prices. They're sequentially down about 4% versus the fourth quarter. Specialty and produce prices were at least in our markets, sequentially up 4%. We ended up with a very similar price environment and inflation environment in Q1 that we had seen in Q3 and Q4. You know, we still expect that, you know, prices will remain elevated, and that's how we built our guidance.
Given you know the second half of the year potential for moderate deflation still exists. If it doesn't play out that way, I think, you know, we'll be fine in terms of continuing to generate the gross profit dollar growth that we need to to operate the business and generate the results that we've been generating. So really our guidance change reflects the you know the sequential impact from Q4 into Q1, and then really not much of a change in our assumptions on the back half of the year.
Great. Thank you.
I'll add.
What about on the labor side? Excuse me.
I'll add a little bit to that, Andy, as well, you know, we anticipated some moderate deflation and, you know, obviously, that's a crystal ball. As Jim said, you know, we have gotten some relief on certain proteins, but I'm starting to be more, you know, more in the camp that I don't think we're gonna get much, even though logistically, I think you might get some relief in trucking. You know, I think between the war and other factors in the world, I'm starting to think maybe that, unfortunately, we will have, you know, we're gonna have inflation. You know, we're not gonna get much of a break.
Like Jim said, you know, our team is geared up to deal with whatever comes at us, you know, the way we price and our algorithms, and every team is on full alert to try to continue to deal with it and pass on the inflation. From the labor front, you know, I think it's market by market. Some markets are worse than others. You know, some markets, we're doing really well in bringing people back to work and getting really good employees. Then other markets seem to be tougher for various reasons. You know, it's overdriving right now. You are competing. We have seen more people, thank God, come back into the marketplace, but it's still a headwind.
Great. Thank you.
Thank you.
Thank you. Our next question has come from the line of Fred Wightman with Wolfe Research. Please proceed with your questions.
Hey, guys. Maybe just to follow up on that inflation commentary from a second ago. I mean, are you concerned about pushback either from restaurant operators or consumers? I understand that there's a little bit of relief on the protein side, but some of that specialty inflation is continuing. Chris, it also seems like you're not expecting that to go away. Do you think or are you seeing or feeling any pushback, I guess, ultimately from the consumer about those prices?
Yeah. You know, I hate to say with a frog boiling in water. I mean, you know, I dine out every day. You know, I monitor, you know, sometimes I'm amazed, you know, when I get the check. You know, again, our customers, they're very resourceful, you know. We're still not back to full menus, you know. A lot of it is because they don't have the labor. A lot of it is the supply chains. A lot of it is because of the massive inflation. You know, restaurateurs, again, are very creative to survive. You're seeing more, you know, pastas. You're seeing more stews.
Where you might see three different cuts of meat on a menu, you might see one or two, maybe with a hamburger, you know. Maybe you won't see a strip and a rib eye where, you know, very expensive things. We're seeing different dishes with, you know, maybe it's pasta with different types of, you know, clams and scallops and products that are available. It's definitely influencing menus and, you know, restaurants are trying to see, you know, to be competitive and keep prices, you know, where they think are affordable to keep the traffic in. We have our high-end.
You know, one of the reasons I've always loved this business for almost 40 years is that I always felt there were consumers that were willing to spend, whether it's, you know, business people or affluent business people or consumers or travelers or celebratory meals. That market seems to be really strong. They're passing on the prices, and it doesn't seem like there's a lot of pushback because you can't get a seat in one of the great restaurants still. I'm pleasantly. I don't wanna say surprised because we've been doing this so long, but it gives me a little more shuteye at night knowing that those consumers are out there and have been for almost 40 years.
People are still willing to pay for a great experience and a great meal. The demand for great ingredients is as high as ever.
Makes sense. Just maybe a follow-up on your labor and staffing comments. I mean, if we think about some of the one-time costs and hiring inefficiencies that the industry has been dealing with, given sort of that tightness, as that labor continues to improve and that pool continues to widen, do you think that some of those inefficiencies go away, or do you think that something has sort of changed structurally from an onboarding perspective?
I think it was challenging before the pandemic, and now it's just exacerbated. I mean, these are hard jobs, right? Whether you know, it's at the restaurant, in the kitchen, or whether it's on our side, driving trucks and working night shifts, they've always been tough jobs. You know, we're all paying more, you know, for the same job. I think that's helped, you know. I think it's becoming more like other parts of the world where it's not a temporary job. People used to think that, you know, people are working, you know, either as a waiter or they're working the night shift, and that's just temporary.
I think we realized that, you know, that's people's full-time jobs, and they need to be able to make a certain amount of money and have certain benefits to be able to live, especially in the city. I'm hopeful that, you know, this increase that has happened, you know, we're seeing it, you know. I hope it's forever that, you know, with the raises have come people that are not quitting and are showing up, and it's cutting down the turnover, which is extremely expensive, right? To train people. It's a big factor in our overall expense. I'm cautiously optimistic that people are coming back to these jobs because they're better paying.
At the same time, you know, we're traveling the world looking for products that are high quality that need less labor. 'Cause as I said, even before 2020, when the pandemic hit, labor was an issue and we were looking for, you know, super high-quality products that meet the standards of our chef-driven restaurants that required less labor. They're high value, they're profitable for us, and we're gonna continue to make sure we, you know, we hunt out and get our manufacturers, producers to give us those items for our customers.
Makes sense. Thanks, guys.
Thank you.
Thank you. Our next question has come from the line of Ben Klieve with Lake Street Capital. Please proceed with your questions.
All right. Thanks for taking my questions, and congratulations on another really good quarter here. Just one question from me about kinda how you are assessing the M and A landscape today, especially how it's evolved over the past, you know, few quarters here as inflation has increased and maybe the, you know, higher quality available businesses, you know, have been acquired. You know, can you talk about how the quality of the businesses available to you in the M and A world has evolved? Also how multiples have maybe evolved here as inflation has, you know, become a more material event, maybe being offset here by the opportunities with the world kinda returning back to normal.
Sure. You know, great question. You know, the pipeline was frothy, you know, going into the pandemic. I think now it's even frothier because, you know, there was such a backup, not a lot of deals got done, obviously, in 2020. You know, we did a bunch, I think in 2021 going into 2022. Optimistically, I think it's gonna continue to be frothy. You know, multiples, we're pretty disciplined. I mean, you know, we're not trying to be the biggest, you know. We've always said, you know, has to be a cultural fit. You know, we're pretty disciplined in the multiples that, you know, we paid historically. Would we pay more for a great business that's growing and has something special? I think, yes.
A lot of what we buy are things that need to be, you know, modernized. Either they need facilities, or they need new systems. They're either a little tired, or they've reached their maturity point. There's a lot of family businesses where there's nobody really that wants to go into the business. You know, we pass on many deals we think that, you know, are just too expensive. I think there's plenty of money out there chasing deals, you know, it does get competitive on some of the deals. You know, our philosophy really is we don't, you know, we really don't need to do anything at this point. We have built such a great foundation to grow organically.
I think new territory, we'd like to acquire somebody 'cause it really speeds up going into a territory. New categories also strengthen our offerings and allow us to grow more in what we call the hybrid model, which we've been doing very successfully with adding all these protein divisions now and produce. You know, we're in a great position 'cause we're not forced to do any deals. I think it is the Wild West for the next few years. I think you'll see a tremendous amount of deals getting done. I think we'll do a lot of good smart deals. We'll do fold-ins with the new facilities we have that gives us the capacity. You know, those are highly accretive. I think you'll see us very active in that market.
I think there's some new territories that give us great opportunities that we've been looking at. Optimistically, I think we'll get deals done there. We're remaining, you know, very, very disciplined in how we go about it.
Got it. That's all interesting color. Thank you for that. That does it for me. Again, excuse me, congratulations on a great quarter, and we'll get back in queue here.
Thank you.
Thanks, Ben.
Thank you. Our next question has come from the line of Kelly Bania with BMO Capital Markets. Please proceed with your question.
Hi. Good morning. Thanks for taking our questions. Chris and Jim, just curious, as you're sitting here today, how you think about that expectation to get back to 2019 volume levels. I think the plan was around by Q4. Just curious if that has accelerated a little bit here, or you still wanna keep that timeline for case volume to get back to 2019 levels.
Yeah. Thanks for the question, Kelly. Yeah, we're definitely on the path to meet it and exceed it. I think, you know, as I mentioned earlier, you know, we're trending towards the higher end of our guidance, while we're being a little conservative in our update. You know, I think currently, you know, we're around 95% of 2019 pro forma for the acquisitions in terms of aggregate volume. Obviously, some markets are higher, some markets are lower, but it's averaging out to that. Then when you add in the inflation versus 2019, you can get a sense of how we're trending overall. I would say that we are on a slightly accelerated pace versus our original estimate to get there by the end of the year.
Perfect. That makes a lot of sense. A lot of questions about labor, but I guess just another question there. When you speak to your core customers, do you have a sense for the extent to which labor is still a constraint on their volume, and how you see that, you know, progressing?
Yeah. I mean, I think it's again, you know, you get a lot of mixed answers. You know, I speak to, you know, sometimes a few hundred customers a month, and I hear, "Not a problem. We're firing on all cylinders. We got labor, and we're going back to full capacity and, you know, seven days and everything we've done." Then, you know, depending on other parts of the country, we hear that, you know, they're only opening for lunch so many days to give staff a break because they're going full tilt at night, and it's just too many hours, and they don't wanna have, you know, a staff that's not proper for that restaurant. I still think it's mixed.
you know, again, our high volume, you know, our high volume restaurants seem to be able to attract labor and doing big numbers again. I think it's a little bit all over the place, Kelly.
Okay. That's helpful. Just questions on fuel. Obviously, a lot of questions several weeks ago just about, you know, diesel costs. Can you just remind us how that's impacting you, how what you're planning for the rest of the year, and how the extent to which you're passing that on to your customers?
Yeah, sure. So you know, we went into you know, when we were planning and building our guidance for 2022, we had already factored in a pretty decent increase as we do every year just from an assumption perspective in diesel prices. Obviously, what's played out has exceeded that. You know, part of it is mitigated just by the fact that we built a pretty good portion into our guidance. You know, our focus, our operating teams, our commercial teams are focused on you know, generating the appropriate gross profit dollar growth you know, to offset the input cost impacts that we see. Obviously, a very short term kind of violent spike like we saw over a couple of weeks, you can't completely mitigate.
What you can do is adapt your pricing, your delivery model to, you know, in each specific region, you know, to mitigate, you know, the next piece of that increase. Then really what we do is we focus on the medium term and the long term. That is, you know, making sure that we plan appropriately. Also, you know, as we retire our trucks, and we retire a pretty decent amount of our trucks coming off of leases or our own trucks that we're retiring, and we're replacing them with new, more fuel efficient trucks to the extent of, you know, 25%-30% more fuel efficient.
Obviously, that's a more medium- to long-term impact, but it can definitely make an impact over a couple of months and even over a couple of years.
Okay. That's helpful. Just lastly, in terms of the Southern California facility, can you just elaborate a little bit more on the savings you expect there and maybe, you know, how many more facilities over the next several years could look like the format of this Southern California structure?
Yeah.
Yeah.
As far as savings, I think I'll let Jim opine about savings. Really, I mean, this is to, you know, quadruple our business in Southern California. You know, we've been highly restrained. You know, we're getting by because we had room in our Vegas facility where we can store products, and we had the trucks going back and forth every day. It really helped us, you know, get through this period of being out of space. I mean, these facilities, you know, we're gonna open these two. We have another one gonna open, probably next year in Northern California, but that's really, you know, for consolidating our processing for protein.
Kelly, I mean, I've always wanted to build, you know, facilities like this, and finally now we got two coming on almost at the same time. We'll measure, you know, the savings of, you know, sharing the trucks, right? We have all our categories in these new buildings. You know, the hope is that we will cut down on our trucking expense. We'll need less trucks, right? One truck being able to go to a lot of customers with more of the categories, so we can start eliminating some of those trucks that, you know, some customers, we have four trucks going to a day. Sharing management, you know, I think that's gonna be a big savings, right? You don't need, you know, five facility managers.
Right now in some markets, we have five facilities. I think that's really where the savings comes, is in cutting down on fuel, cutting down on truck expense, cutting down on manpower, and cutting down on high, you know, higher paid management that you would have in multiple facilities. That's really the exciting part of this. Also being able to satisfy customers and add, you know, obviously more dollars to the truck, which should be, you know, a much more profitable model.
Yeah. Kelly, I'll just add that, you know, to Chris's point, it's really a investment in growth. Our Florida facility, L.A., San Francisco, eventually we'll do something in New England and the Mid-Atlantic. But it also gives us the capacity to do bolt-on acquisitions. As we create, you know, that capacity in key markets like L.A. and Southern Florida, we have a lot more room to do bolt-on acquisitions and create synergistic profitability.
Thank you.
Thanks.
Thank you. Our next question has come from the line of Todd Brooks with The Benchmark Company. Please proceed with your question.
Hey. Good morning, guys. Congrats on a really excellent quarter.
Thanks, Todd.
Thank you, Todd.
Two quick questions for you. One, this follows up on the M and A discussion earlier, Chris. If you go back to what the historical kind of algorithm was for Chef, it was kind of mid-single digit growth from organic operations, mid-single digit growth from acquisitions to get to that double-digit top line. With where we stand in the recovery and the opportunity to take, I would imagine, a solid amount of share coming out of the recovery, if you look at kind of that algorithm, acquisitions I know are long-tailed, and when you get them to the finish line, if that makes sense, you'll do them.
What do you feel like that organic growth piece looks like for the next couple of years, given just emerging from the pandemic and your place in it and how much stronger you are as an operator versus your peers?
Yeah. Good question. Tough question, Todd. You know, it's still so early, you know, coming out of this. You know, the plan was always, you know, to have mid- to higher single-digit organic growth. I mean, if we can continue that, I think that's really healthy growth. You know, especially, you know, with so much inflation now, it's really we're looking for case growth, piece growth, pound growth. The combination, you know, if you heard me speak for the last five years, 10 years, is the industry is gonna consolidate for many, many reasons. I think the pandemic is actually gonna push that to go even faster. I think that's why we've been, you know...
I've been talking about the talent that we've been adding, you know, even during the pandemic, we continued to hire, look for talent because we know we're gonna need people to help manage these businesses and to help grow them. I think that's really the big key is getting the talent trained, because I think the opportunity is bigger than I even imagined years ago, you know, when I was looking to start to grow much more, nationally. I think that the pandemic has actually reset it to where there'll be even more consolidation for various reasons. You know, between inflation and healthcare and labor, an industry that was consolidating is gonna consolidate more.
I mean, you'll have green sprouts of, you know, maybe boutique little businesses with high margins, but in this competitive landscape, and with the fight for labor and real estate getting extremely expensive on the warehouse side, you know, we call that the Amazon effect, I think it's gonna really push. Organically, it could accelerate the organic growth as well because we're gonna be consolidating categories and, you know, we'll get that category push that we've seen over the last year that we started selling more proteins to our existing customers and vice versa. I think that's why we had, you know, industry-leading organic growth 'cause it was being fueled by that hybrid sell. I think the next five years is gonna be really interesting.
You know, hopefully, this war ends soon, and some of the the trucking issues and the container issues start to dissipate. I think it's gonna be a really exciting four or five years.
That's great. My follow-up, Chris, I know you're plugged in with a lot of the industry groups, and I know it looks like there's kinda one last shot at getting some support out of Congress around the RRF and just actually getting the funding approved for the, I think it's almost 180,000 restaurants that got shut out of the first iteration of the fund. Do you think it gets done with where we are in the recovery? On the off chance that it gets approved in the Senate, what does that mean for your customer base and those that were shut out if there's suddenly an influx of kind of support when they've kind of fought their way through and they're on the front end of the recovery as well?
Yeah. I mean, a great question. You know, again, you know, food away from home, when they say restaurants, I mean, it's just a vast field of operators. Yeah, I can honestly say that we're just not seeing a severe problem from our restaurant focus, you know, the 50,000+ customers that we have. I mean, I'm sure so many have been hurt, obviously many closed, but the ones that are operating right now, it's, you know, we could tell by our receivables as well, it just doesn't seem like there's an issue. Don't wanna jinx myself, but it seems like they're back on their feet, obviously, you know, hurting with labor being tough, and it was a tough business to begin with.
I'm just not sure really where that money's gonna go 'cause the rest of them. It might be a completely different subsection of clientele than the ones that we serve.
Yeah. I was just wondering if it might go into actually accelerating second locations and things like that more often than?
Well, they're opening like crazy, Todd. You know, I always get nervous when I see so many openings. You got a lot of openings coming.
Okay, perfect. Thanks, guys, and congrats again.
Thank you.
Thank you. There are no further questions at this time. I would now like to turn the call back over to management for any closing comments.
Sure. Well, thank you for everyone joining our earnings call. The team put up a great quarter. Was not easy, but it just shows you the hard work and dedicated team at Chef's Warehouse what they could do, you know, more with less. Thank you for joining the call, and we look forward to our next earnings call. Thank you very much.
Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.