CHEF 10-K & 10-Q changes, risk factors and insider trading

We are subject to a wide range of labor costs. Because our labor costs (particularly those in our center-of-the-plate category) are, as a percentage of revenues, higher than other industries, we may be significantly harmed by labor cost increases. In addition, labor is a significant cost for many of our customers in the U.S. food-away-from-home industry, as well as for our distributors and suppliers. Any increase in labor costs, including any increases in costs as a result of increases in minimum wage requirements, wage inflation and/or increased overtime payments as a result of labor shortages, work slowdowns, work interruptions, strikes, or other job actions by employees of customers, distributors and suppliers could reduce the profitability of our customers and reduce demand for our products. In addition, increased immigration enforcement measures could cause similar disruptions in our workforce or the workforce of our customers, distributors or suppliers.

Our operations are dependent upon our experienced and sophisticated sales professionals, warehouse personnel and drivers, and, in our center-of-the platecenter-of-the-plate facilities, the experienced butchers we employ. Qualified individuals have historically been in short supply and an inability to attract and retain them may limit our ability to expand our operations in existing markets, as well as our ability to penetrate new markets. Additionally, the cost of attracting and retaining qualified individuals may be higher than we currently anticipate, and as a result, our profitability could decline. Despite our efforts to control costs while still providing competitive healthcare benefits to our staff members, significant increases in healthcare costs continue to occur, and we can provide no assurance that our cost containment efforts in this area will be effective.

We maintain a self-insured group medical program. The program contains individual stop loss thresholds per incident and aggregate stop loss thresholds based upon the average number of employees enrolled in the program throughout the year. The amount in excess of the self-insured levels is fully insured by third partythird-party insurers. We record a liability for medical claims during the period in which they occur, as well as an estimate of incurred but not reported claims. Management determines the adequacy of these accruals based on a monthlyquarterly evaluation of our historical claims experience and medical cost trends. Projections of future loss expenses are inherently uncertain because of the random nature of insurance claims occurrences and could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. If we suffer a substantial loss that is not covered by our self- insurance reserves, the loss and attendant expenses could harm our business and operating results.

We are self-insured for workers’ compensation and automobile liability to deductibles or self-insured retentions per occurrence. The amounts in excess of our deductibles are fully insured by third partythird-party insurers. Liabilities associated with this program are estimated in part by considering historical claims experience and cost trends. Projections of future loss expenses are inherently uncertain because of the random nature of insurance claims occurrences and could be significantly affected if future occurrences and claims differ from these assumptions and historical trends.

Our financial condition and results of operations are highly dependent upon the local economies of the culinary markets in which we distribute our products. In recent years, certain of these markets have been more resilient to economic downturns than others. Moreover, sales in our New York market, which we define as our operations spanning from New York to Atlantic City,market accounted for approximately 15.9%16% of our net sales for fiscal year 2024.2025. We are therefore particularly exposed to downturns in this regional economy. We also have significant operations in the San Francisco Bay Area, Los Angeles, New England and Middle East. Deterioration in the economic conditions of our key markets generally, or in the local economy of the New York metropolitan area, San Francisco Bay or Los Angeles, New England and Middle East areas, specifically, could affect our business, financial condition or results of operations in a materially adverse manner.

While we have implemented cybersecurity solutions, conducted employee awareness campaigns, employed both internal resources and external consultants to conduct auditing and testing for weaknesses in our systems, controls, firewalls and encryption and intend to maintain and upgrade our security technology and operational procedures to prevent such damage, breaches, attacks, or other disruptive problems, such efforts may be unsuccessful which in turn could provide an opportunity for cyber attacks. Additionally, information technology systems, including those used by cyber attackers, continue to evolve and, in order to remain competitive, we must implement new technologies in a timely and efficient manner. For example, to the extentas artificial intelligence capabilities improve and are increasingly adopted, they may be used to identify vulnerabilities and craft increasingly sophisticated cybersecurity attacks. Attachments crafted with artificial intelligence tools could directly attack information systems with greater speed and/or efficiency than a human threat actor or create more effective phishing emails. Vulnerabilities may also be introduced from the use of artificial intelligence by us, our customers, suppliers, and other business partners and third-party providers. Use of artificial intelligence by us or such third parties, whether authorized or unauthorized, increases the risk that our intellectual property and other proprietary information will be unintentionally disclosed. Our failure to implement timely and/or successfully new technologies may adversely affect our business and competitiveness and, consequently, our results of operations.

Our ability to implement our business plan successfully depends in part upon our ability to further build brand recognition, including for our proprietary products, using our trademarks, service marks and other proprietary intellectual property, including our names and logos. We have registered or applied to register a number of our trademarks. We cannot assure investors that our trademark applications will be approved. Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our goods and services, which could result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands. If our efforts to register, maintain and protect our intellectual property are inadequate, or if any third partythird-party misappropriates, dilutes or infringes upon our intellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business, financial condition or results of operations and might prevent our brands from achieving or maintaining market acceptance.

We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claim that we have infringed or are infringing upon their intellectual property rights, our operating profits could be affected in a materially adverse manner. Any claims of intellectual property infringement, even those without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resources or require us to enter into royalty or licensing agreements in order to obtain the right to use a third party’sthird-party’s intellectual property. Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against us could result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any of which could have a negative impact on our business, financial condition or results of operations and could harm our future prospects.

The failure to comply with applicable legal and regulatory requirements could result in investigations, litigation or other legal proceedings, administrative, civil or criminal fines or penalties, mandatory or voluntary product recalls, cease and desist orders against operations that are in non compliance,noncompliance, closure of facilities or operations, the loss, modification or revocation of any existing licenses, permits or approvals or the failure to obtain additional licenses, permits or approvals in new jurisdictions where we intend to do business. Our suppliers are also subject to similar regulatory requirements and oversight.

The effects of climate change may create financial and operational risks to our business, both directly and indirectly. There is an increased focus around the world by regulatory and legislative bodies at all levels towards policies relating to climate change and the impact of global warming, including the regulation of greenhouse gas (“GHG”) emissions, energy usage and sustainability efforts.efforts, such as package recycling. Increased compliance costs and expenses due to the impacts of climate change on our business, as well as additional legal or regulatory requirements regarding climate change or designed to reduce or mitigate the effects of carbon dioxide and other GHG emissions on the environment, may cause disruptions in, or an increase in the costs associated with, the running of our business, particularly with regard to our distribution and supply chain operations. Moreover, compliance with any such legal or regulatory requirements may require that we implement changes to our business operations and strategy, which would require us to devote substantial time and attention to these matters and cause us to incur additional costs. The effects of climate change, and legal or regulatory initiatives to address climate change, could have a long-term adverse impact on our business and results of operations.

We are a premier distributor of specialty foods in the leading culinary markets in the United States, the Middle East and Canada. We offer more than 88,00090,000 SKUs,stock-keeping units (“SKUs”), ranging from high-quality specialty foods and ingredients to basic ingredients and staples, produce and center-of-the-plate proteins.proteins, such as beef, seafood and poultry. We serve more than 50,00055,000 Core Customer locations, primarily located in our twenty-three geographic markets across the United States, the Middle East and Canada, and the majority of our customers are independent restaurants and fine dining establishments. Our Allen Brothers subsidiary sells certain of our center-of-the-plate products directly to consumers.

In recent years, our sales to existing and new customers have increased through the continued growth in demand for specialty food and center-of-the-plate products in general; increased market share driven by our large percentage of sophisticated and experienced sales professionals, our high-quality customer service and our extensive breadth and depth of product offerings, including, as a result of our acquisitions; the expansion of our existing distribution centers; our entry into new distribution centers, including the construction of new distribution centers that serve our markets in Las Vegas, Oman, Denver, Portland, San Francisco, United Arab Emirates, Philadelphia, Los AngelesPhiladelphia and Miami; and the import and sale of our proprietary brands. Through these efforts, we believe that we have been able to expand our customer base, enhance and diversify our product selections, broaden our geographic penetration and increase our market share.

AcquisitionsRecent Acquisition

•operational efficiencies through system enhancements and consolidation of truck routes and facilities; and

Due to our focus on menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores, our results of operations are materially impacted by the success of the food-away-from-home industry in the United States, Middle East and Canada, which is materially impacted by general economic conditions, weather, discretionary spending levels and consumer confidence. When economic conditions deteriorate, our customers’ businesses are negatively impacted as fewer people eat away-from-home and those who do spend less money. As economic conditions begin to improve, our customers’ businesses historically have likewise improved, which contributes to improvements in our business. Similarly, the direct-to-consumer business of our Allen Brothers subsidiary is significantly dependent on consumers’ discretionary spending habits, and weakness or uncertainty in the economy could lead to consumers buying less from Allen Brothers.

Given our wide selection of product categories, as well as the continuous introduction of new products, we can experience shifts in product sales mix that have an impact on net sales and gross profit margins. This mix shift is most significantly impacted by the introduction of new product categories of products in markets that we have more recently entered, the shift in product mix resulting from acquisitions, as well as the continued growth in item penetration on higher velocity items such as dairy products.

•Gross profit and gross profit margin. Our gross profit and gross profit as a percentage of net sales, or gross profit margin, are driven principally by changes in volume and fluctuations in food and commodity prices and our ability to pass on any price increases to our customers in an inflationary environment and maintain or increase gross profit margin when our costs decline. Our gross profit margin is also a function of the product mix of our net sales in any period. Given our wide selection of product categories, as well as the continuous introduction of new products, we can experience shifts in product sales mix that have an impact on net sales and gross profit margins. This mix shift is most significantly impacted by the introduction of new categories of products in markets that we have more recently entered, impact of product mix from acquisitions, as well as the continued growth in item penetration on higher velocity items such as dairy products.

•Other operating expenses: Other operating expenses includes expenses primarily related to changes in the fair value of the Company’sour contingent earn-out liabilities, gains and losses on asset disposals, asset impairments, certain third-party deal costs incurred in connection with business acquisitions or financing arrangements and certain other costs.

Organic growth contributed $258.9$345.7 million, or 7.5%,9.1%, to sales growth and the remaining growth of $101.6$9.6 million, or 3.0%,0.3%, resulted from priorcurrent year acquisitions. Organic case count increased approximately 4.6%3.9% in our specialty category.category, representing an increase in net sales of $90.4 million. In addition, specialty unique customers and placements in our specialty category increased 6.6%2.9% and 11.6%,6.4%, respectively, compared to the prior year. Organic pounds sold in our center-of-the-plate category increaseddecreased 3.3%2.2% compared to the prior year.year, representing a decrease in net sales of $32.5 million, primarily due to our exit from a non-core commodity poultry program in fiscal 2025. Estimated inflation wasincreased 3.5%sales by $102.2 million, or 4.4% in our specialty category and 3.0%by $166.7 million, or 11.5% in our center-of-the-plate category compared to fiscal 2023.2024.

Gross profit dollars increased primarily$85.6 million as a result of year-over-year sales growth which includes inflation and priceacquisitions, inflation.with the remainder of the increase primarily due to improved gross profit margin rates. Gross profit margin increased approximately 3710 basis points due to sales growth combined with improved pricinginventory methodsmanagement and inventoryfavorable management,production ascost well as changes in volume mix between specialty and center-of-the-plate category sales.leverage. Gross profit margins increased 3243 basis points in the Company’sour specialty categorycategory, or $10.9 million, and increaseddecreased 1231 basis points in the Company’sour center-of-the-plate categorycategory, or $5.0 million, compared to the prior year.

The increase in selling, general and administrative expenses was primarily due to higher depreciation and amortization expenses driven by acquisitions and facility investments, and higher costs associated with compensation and benefits, facilities and distributionbenefits to support sales growth.growth, higher depreciation expense driven by facility and fleet investments and higher self-insurance expense. Our ratio of selling, general and administrative expenses to net sales increaseddecreased 20 basis points due to increasedsales near-termgrowth costs associatedcombined with certain benefits derived from our investments in facilitiesour facility and acquisitions.distribution operations.

Interest expense increaseddecreased primarily due to higherlower averageaggregate principal amounts of debt outstanding debt due to an increase in(excluding finance leases), lower interest rates and amountslower drawnlosses on ourdebt revolvingextinguishment credit facility and higher rates of interest charged onin the variablecurrent rateyear portioncompared ofto ourthe outstandingprior debt.year.

We finance our day-to-day operations and growth primarily with cash flows from operations, borrowings under our senior secured credit facilities and other indebtedness, operating and finance leases, trade payables and equity financing.

In AprilOctober 2024,2025, we madeissued aan scheduled principal payment of $5.0$11.0 million towards the unsecured note issuedat an original issue discount of $0.3 million in connection with the GreenLeafacquisition acquisition.of substantially all of the assets of Italco (the “Italco Note”). We also paid $5.5 million cash at closing. The noteItalco Note is presented at December 26, 2025 under the caption “Finance leases and other financing obligations” in the table above.

In November 2023, we announced a two-year share repurchase program in an amount up to $100.0 million, targeting $25.0 million to $100.0 million of share repurchases by the end of fiscal 2025. During fiscal 2024,2025, we repurchased and retired 426,235241,198 shares of our common stock at an average purchase price of $40.78$62.19 per share. The share repurchases were funded by our available cash. The remaining share purchaserepurchase authorizationprogram wasended $82.6 million atin December 27,2025 2024.with Wea are not obligated to repurchase any specific numbertotal of 667,433 shares andof mayour suspendcommon orstock discontinuerepurchased thefor program$32.4 at any time.million.

(1) We define working capital as current assets less current liabilities.

Our cash provided by operating activities is predominately driven by net sales to our customers. Our cash used in operating activities is primarily driven by our payments to suppliers for our inventory, employee compensation, payments to support our facilities, our distribution network, interest on our indebtedness, payments to tax authorities and other general corporate expenditures. Net cash provided by operations was $129.2 million for the fiscal year ended December 26, 2025 compared to $153.1 million for the fiscal year ended December 27, 2024 compared to $61.6 million for the fiscal year ended December 29, 2023.2024. The increasedecrease in cash provided by operating activities was primarily due to gross profit growth, favorable timing of supplier payments at fiscal year-end and highera accruedstrategic compensationpull-forward comparedof tocertain theinventory priorpurchases, year.partially offset by sales growth.

Net cash used in investing activities was $49.8$46.8 million in fiscal 20242025 driven by $49.5 million in capital expenditures.

Net cash used byin financing activities was $38.5$76.2 million for fiscal 20242025 driven primarily by $23.0 million of payments of debt and other financing obligations, $26.4$20.0 million of payments under our asset-based loan and revolving credit facilities, $17.4$15.6 million of finance lease payments, $15.0 million used to repurchase our common stock, $7.4$13.0 million of payments of debt and other financing obligations and $12.0 million paid for shares surrendered to pay tax withholding related to the vesting of equity incentive plan awards, $7.1 million of finance lease payments and $3.8 million of earn-out payments, partially offset by $46.4 million of incremental borrowings on our asset-based loan and revolving credit facilities.awards.

We account for acquisitions in accordance with Accounting Standards Codification Topic 805 “Business Combinations.” Assets acquired and liabilities assumed are recorded at their estimated fair values, as of the acquisition date. The judgments made in determining the estimated fair value of assets acquired and liabilities assumed, including estimated useful life, may have a material impact on our consolidated balance sheet and may materially impact the amount of depreciation and amortization expense recognized in periods subsequent to the acquisition. We determine the fair value of intangible assets using an income approach and, when appropriate, we engage a third partythird-party valuation firm. Generally, we utilize the multi-period excess earnings method to determine the fair value of customer relationships and the relief from royalty method to determine the fair value of trade names. These valuation methods contain significant assumptions and estimates including forecasts of expected future cash flows and discount rates. Determining the useful life of an intangible asset also requires judgment, as different types of intangible assets will have different useful lives. The excess of the purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill.

For the fiscal year ended December 27,26, 2024,2025, the Company assessed the recoverability of goodwill using a quantitative analysis and determined that the fair value of its reporting units substantially exceeded their respective carry values. For the fiscal year ended December 29, 2023, the Companywe assessed the recoverability of goodwill using a qualitative analysis and determined that it is more likely than not that the fair value of itsour reporting units exceeded their respective carry values. For the fiscal year ended December 27, 2024, we assessed the recoverability of goodwill using a quantitative analysis and determined that the fair value of our reporting units substantially exceeded their respective carry values. As a result, no goodwill impairments were identified for those periods. Total goodwill as of December 27,26, 20242025 and December 29,27, 20232024 was $356.3$362.7 million and $356.0$356.3 million, respectively.

During fiscal 2025 and 2023, we incurred customer relationships intangible asset impairment charges of $8.0 million and $1.8 million, respectively, related to the loss of non-core customers, post acquisition. We did not incur any such impairment charges in fiscal 2024. There have been no other events or changes in circumstances during fiscal 20242025 or 20232024 indicating that the carrying value of our finite-lived intangible assets are not recoverable. Total finite-lived intangible assets as of December 27,26, 20242025 and December 29,27, 20232024 were $160.4$137.3 million and $184.9$160.4 million, respectively.

We estimate our ability to recover deferred tax assets within the jurisdiction from which they arise. This evaluation considers several factors, including recent results of operations, scheduled reversal of deferred tax liabilities, future taxable income and tax planning strategies. As of December 26, 2025 and December 27, 2024, we did not have a valuation allowance. As of December 29, 2023, we had a valuation allowance of $2.1 million, relating to certain net operating losses that may not be realizable in the future based on taxable income forecasts and certain state net operating loss limitations.

Management has discussed the development and selection of these critical accounting policies with our board of directors, and the board of directors has reviewed the above disclosure. Our consolidated financial statements contain other items that require estimation, but are not as critical as those discussed above. These other items include our calculations for inventory valuation, bonus accruals, depreciation and amortization. Changes in estimates and assumptions used in these and other items could have an effect on our consolidated financial statements.

Thirteen Weeks Ended MarchJune 27,26, 2026 Compared to Thirteen Weeks Ended MarchJune 28,27, 2025

Organic growth contributed $98.3$126.1 million, or 10.4%,12.2%, to sales growth and the remaining growth of $10.0$7.6 million, or 1.0%,0.7%, primarily resultingresulted from our acquisition of Italco. Organic case count increased approximately 5.7%6.0% in our specialty category, representing an increase in net sales of $33.7$38.7 million. In addition, unique customers and placements in our specialty category increased 1.9%3.6% and 6.2%,7.2%, respectively, compared to the prior year quarter. Organic pounds sold in our center-of-the-plate category increased 6.2%8.8% compared to the prior year quarter, representing aan increase in net sales of $22.3$34.8 million. Estimated inflation increased sales by $9.0$25.7 million, or 1.5%4.0% in our specialty category and by $29.7$25.2 million, or 8.2%6.4% in our center-of-the-plate category compared to the prior year quarter.

Gross profit dollars increased $25.7$32.9 million as a result of sales growthgrowth, which includes inflation and acquisitions, with the remainder of the increase primarily due to improved gross profit margin rates. Gross profit margin increased approximately 5349 basis points due to effective pricing in an inflationary “food away from home” environment and product cost management. Gross profit margins increased 4347 basis points in the Company’s specialty category, or $2.8$3.4 million, and increased 11075 basis points in the Company’s center-of-the-plate category, or $4.6$3.4 million, compared to the prior year quarter.

The increase in selling, general and administrative expenses was primarily due to higher costs associated with compensation and benefitsbenefits, facilities and distribution to support sales growth,growth and higher depreciation expense driven by facility and fleet investments and higher self-insurance expense.investments. Our ratio of selling, general and administrative expenses to net sales decreased 1070 basis points due to improved fixed cost leverage.

Other operating expenses, net decreased by $0.4$0.3 million primarily due to lower third-partyasset dealdisposal costs.losses during the thirteen weeks ended June 26, 2026 compared to the prior year quarter.

The Company’s effective tax rate was 23.6%31.4% and 17.6%28.0% for the thirteen weeks ended MarchJune 27,26, 2026 and MarchJune 28,27, 2025, respectively. The increase in the effective tax rate for the thirteen weeks ended MarchJune 27,26, 2026 reflectsresulted afrom smallerincreased discretepermanent itemtax impactdifferences related to firstcompensation quarter tax benefits from the vesting of stock awards. Exclusive of the first quarter discrete items, the effective tax rate was 30% and 28% for the thirteen weeks ended March 27, 2026 and March 28, 2025, respectively.expense.

In January 2026, we entered into an amendment to our senior secured term loan agreement, which reduced the interest rate spread by 50 basis points on our senior secured term loan facility. Additionally, during the thirteen weeks ended March 27, 2026, we made a voluntary principal prepayment of $5.0 million towards the senior secured term loan.

In November 2023, we announced a two-year share repurchase program in an amount up to $100.0 million. In February 2026, the board of directors authorized the extension of the share repurchase program for ten years, subject to that same $100.0 million limit. During the thirteentwenty-six weeks ended MarchJune 27,26, 2026, we repurchased 156,861 shares of our common stock at an average purchase price of $63.75 per share. The share repurchases were funded by our available cash. The remaining share purchase authorization was $57.6 million at MarchJune 27,26, 2026. We are not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time.

Our cash provided by operating activities is predominately driven by net sales to our customers. Our cash used in operating activities is primarily driven by our payments to suppliers for our inventory, employee compensation, payments to support our facilities, our distribution network, interest on our indebtedness, payments to tax authorities and other general corporate expenditures. Net cash provided by operations was $38.3$96.7 million for the thirteentwenty-six weeks ended MarchJune 27,26, 2026 compared to $49.6$64.1 million for the thirteentwenty-six weeks ended MarchJune 28,27, 2025. The decreaseincrease in cash provided by operating activities was primarily due to timingsales growth and a strategic pull-forward of inventory purchases andin supplierthe payments,prior partiallyyear offset by sales growth.period.

Net cash used in investing activities was $7.7$17.2 million for the thirteentwenty-six weeks ended MarchJune 27,26, 2026, primarily driven by capital expenditures.

Net cash used in financing activities was $28.8$64.9 million for the thirteentwenty-six weeks ended MarchJune 27,26, 2026 driven by $10.1$30.0 million of payments under our asset-based loan facility, $10.2 million of finance lease payments, $10.2 million paid for shares surrendered to pay tax withholding related to the vesting of equity incentive plan awards, $10.0 million used to repurchase our common stock,stock $5.8and $6.5 million of payments of term loan debt and $5.0 million of finance lease payments.debt.