US Foods Holding Corp. (NYSE:USFD) Q4 2022 Earnings Call Transcript

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Brian Harbour: Yes, thank you. Good morning guys and welcome Dave. Maybe just to ask on — you called out kind of the drag from exiting some customers. And I know that’s always a constant process. But do you think that you’re kind of past most of the drag from that, or do you think there’s still more work to do just on kind of the customer optimization side?

Dirk Locascio: So, good morning Brian, this is Dirk. We’ve said that we expect to lap sort of the remaining exits in Q1. With that said I think that the thing that we’ve been pretty consistent is we’re going to continue to sort of have good hygiene. In any business you would want us to be continuing to look at our base. So, what wouldn’t expect is any significant, sort of, cleansing et cetera as opposed to it’s really about continuing to make sure we’re growing and focus on the right customers. And hopefully what you see is by us doing that that’s showing up in our gross profit and showing up in our market share and it’s actually — and it’s clearly showing up in our results.

Brian Harbour: Okay. Great. Thanks. Maybe just on the debt side. You obviously have EBITDA growth that helps leverage. Do you expect to pay down debt at a similar or perhaps higher rates what you did in 2022? And is that kind of factored into the interest expense outlook?

Dirk Locascio: We do expect to continue to pay down debt. We haven’t been specific. So we would expect to continue to pay down debt and also opportunistically repurchase shares. And those will be depending on the market conditions, but the continued reduction in leverage and being opportunistic with what we think is an undervalued share price are two things we’ll continue to focus on. And, yes, we’ve contemplated a level of that in our EPS outlook.

Brian Harbour: Okay. Thank you.

Operator: Your next question is from Edward Kelly of Wells Fargo. Please go ahead. Your line is open.

Edward Kelly: Hi, guys. Good morning and David, welcome.

Dave Flitman: Thanks, Ed.

Edward Kelly: Question is really for you Dave. I mean obviously you support the plan that has been in place here and that’s very good to hear. But as an outsider with your own, sort of, perspective there’s probably also things that you see as additional opportunity. And I think you alluded to that when you said about accelerating the execution of the plan. Could you just maybe talk a bit more about what you mean by that? And then how does that, sort of, roll into the goal that the company has had about the $1.7 billion in EBITDA in 2024?

Dave Flitman: Yes. Let me take the second part of that question first Ed and then I’ll come back to the first part. I haven’t said anything about the 2024 target, but that’s purely an issue of process and timing for me. I’ve been spending my time learning the business and digging in and understanding the outlook for this year. I haven’t seen anything that gives me reason to believe we’re off track for 2024. It’s just early days. In fact it’s just the opposite. You’ve heard about my confidence in the momentum in the company. And so back to your first part of your question, for me I like to work with teams to execute, execute well and accelerate momentum. We have so much going on in the company all rightfully aimed at improving the results.

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