Chefs' Warehouse, Inc.

(Amounts in thousands, except share and per share amounts)

Note 1 -Operations and Basis of Presentation

Description of Business and Basis of Presentation

The Chefs’ Warehouse, Inc. (the “Company”), and its wholly-owned subsidiaries, is a distributor of specialty food and center-of-the-plate products in the United States, the Middle East and Canada. The Company is focused on serving the specific needs of chefs who own and/or operate restaurants, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores.

The Company’s quarterly periods end on the thirteenth Friday of each quarter. Every six to seven years, the Company will add a fourteenth week to its fourth quarter to more closely align its year-end to the calendar year.

Consolidation

The unaudited condensed consolidated financial statements include all the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Unaudited Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements and the related interim information contained within the notes to such unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules of the Securities and Exchange Commission (“SEC”) for interim information and quarterly reports on Form 10-Q. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 27, 2024 filed as part of the Company’s Annual Report on Form 10-K (the “2024 Form 10-K”).

The unaudited condensed consolidated financial statements appearing in this Form 10-Q have been prepared on the same basis as the audited consolidated financial statements included in the Company’s 2024 Form 10-K, and in the opinion of management, include all normal recurring adjustments that are necessary for the fair statement of the Company’s interim period results. The year-end consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by GAAP. Due to seasonal fluctuations and other factors, the results of operations for the thirteen and thirty-nine weeks ended September 26, 2025 are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from management’s estimates.

Note 2 –Summary of Significant Accounting Policies

Revenue Recognition

The following table presents the Company’s net sales disaggregated by principal product category:

The Company determines its product category classification based on how the Company currently markets its products to its customers. The Company’s definition of its principal product categories may differ from the way in which other companies present similar information. Net sales by product category includes estimates of product mix for certain locations that are not yet fully integrated into the Company’s sales reporting system as of the reporting date.

Share Repurchases

The Company has a share repurchase program that is executed through purchases made from time to time either in the open market or through private market transactions. During the thirty-nine weeks ended September 26, 2025 and September 27, 2024, shares purchased were retired and returned to the status of authorized and unissued shares.

Recent Accounting Pronouncements

Targeted Improvements to the Accounting for Internal-Use Software: In September 2025, the Financial Accounting Standards Board (“FASB”) issued guidance amending the requirements for capitalizing software costs to when both the following conditions are met: (1) the funding of the project has the appropriate authorization and (2) it is probable that the project will be completed and the software will be used to perform the intended function. The guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within that fiscal year, and may be applied on a prospective, modified prospective or retrospective basis. Early adoption is permitted. The Company expects to adopt this guidance when effective and is evaluating the impact of adoption on its consolidated financial statements.

Measurements of Credit Losses for Accounts Receivable and Contract Assets: In July 2025, the FASB issued guidance to provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets to assume that current conditions as of the balance sheet date will persist through a reasonable and supportable forecast period. The guidance is effective for fiscal years beginning after December 15, 2025, and interim periods within that fiscal year. Early adoption is permitted. The Company expects to adopt this guidance when effective and adoption is not expected to have a material impact on its consolidated financial statements.

Induced Conversions of Convertible Debt Instruments: In November 2024, the FASB issued guidance which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The guidance is effective for fiscal years beginning after December 15, 2025, and interim periods within that fiscal year. Early adoption is permitted. The impact of this guidance is dependent on future induced conversions, if any, of the Company’s convertible debt instruments.

Disaggregation of Income Statement Expenses: In November 2024, the FASB issued guidance to require disclosure in the notes to the financial statements of certain categories of expenses that are included on the face of the income statement, including purchases of inventory, employee compensation and depreciation and amortization, as well as additional disclosure about selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods for fiscal years beginning after December 15, 2027 on a prospective basis. Early adoption is permitted. The Company expects to adopt this guidance when effective and is evaluating the impact of adoption on its consolidated financial statements, which is limited to financial statement disclosures.

Improvements to Income Tax Disclosures: In December 2023, the FASB issued guidance designed to improve the transparency and usefulness of income tax disclosures. The amendments include provisions to address the consistency of the income tax rate reconciliation and requirement to disaggregate income taxes paid by jurisdiction. The new disclosure requirements will be effective in the Company's Annual Report on Form 10-K for the fiscal year ending December 26, 2025. The impact of the guidance is limited to financial statement disclosures.

Note 3 –Net Income per Share

Basic net income per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share adjusts basic net income per share for all the potentially dilutive shares outstanding during the period. When the Company’s convertible notes are dilutive, interest on the convertible notes, net of tax, is added back to net income in order to calculate diluted earnings available to common shareholders.

The following table sets forth the computation of basic and diluted net income per common share:

Reconciliation of net income per common share:

Potentially dilutive securities that have been excluded from the calculation of diluted net income per common share because the effect is anti-dilutive are as follows:

Note 4 –Fair Value Measurements

Assets and Liabilities Measured at Fair Value

The Company’s contingent earn-out liabilities are measured at fair value. These liabilities were estimated using Level 3 inputs. The fair value of contingent consideration was predominantly determined based on a probability-based approach which includes projected results, percentage probability of occurrence and the application of a discount rate to present value the payments. A significant change in projected results, discount rate, or probabilities of occurrence could result in a significantly higher or lower fair value measurement. Changes in the fair value of contingent earn-out liabilities are reflected inother operating expenses (income), net on the condensed consolidated statements of operations.

The contingent earn-out liability totaled $1,350 as of September 26, 2025, of which $600 is long-term and reflected asother liabilities on the Company’s condensed consolidated balance sheets. The remaining portion is short-term and reflected asaccrued liabilities on the Company’s condensed consolidated balance sheets. The contingent earn-out liability totaled $750 as of December 27, 2024 and is all short-term in nature. Contingent earn-out liability payments in excess of the acquisition date fair value of the underlying contingent earn-out liability are classified as operating activities on the Company’s condensed consolidated statements of cash flows and all other such payments are classified as financing activities.

Fair Value of Financial Instruments

The carrying amounts reported in the Company’s condensed consolidated balance sheets for accounts receivable and accounts payable approximate fair value due to their immediate to short-term nature. The fair values of the asset-based loan facility and term loan approximated their book values as of September 26, 2025 and December 27, 2024, as these instruments had variable interest rates that reflected current market rates available to the Company and are classified as Level 2 fair value measurements.

The following table presents the carrying value and fair value of the Company’s convertible notes and its unsecured note issued in connection with the acquisition of Oakville Produce Partners, LLC (“GreenLeaf”) in fiscal 2023 (“GreenLeaf Note”). The fair value of the Company’s 2028 Convertible Senior Notes was based on bid/ask quotes as of or near the balance sheet date. The fair value of the GreenLeaf Note as of December 27, 2024 was determined based upon observable market prices of similar debt instruments.

Note 5 –Inventories

Inventories consist primarily of finished product and are reflected net of adjustments for shrinkage, excess and obsolescence to approximate their net realizable value totaling $9,370 and $11,579 at September 26, 2025 and December 27, 2024, respectively.

Note 6 –Property and Equipment

Property and equipment is net of accumulated depreciation and amortization of $178,149 and $147,902 at September 26, 2025 and December 27, 2024, respectively.

Note 7 –Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill are presented as follows:

Other intangible assets are net of accumulated amortization of $175,219 and $157,032 as of September 26, 2025 and December 27, 2024, respectively. Amortization expense for other intangibles was $6,084 and $5,874 for the thirteen weeks ended September 26, 2025 and September 27, 2024, respectively, and $18,187 and $18,216 for the thirty-nine weeks ended September 26, 2025 and September 27, 2024, respectively.

Note 8 –Debt Obligations

Debt obligations as of September 26, 2025 and December 27, 2024 consisted of the following:

Senior Secured Term Loan Credit Facility

In June 2025, the Company entered into an amendment (“Thirteenth Amendment”) to its senior secured term loan agreement, which reduced the interest rate spread on its senior secured term loan facility. Arrangement fees of $525 and third-party transaction costs of $49 were expensed as incurred during the thirty-nine weeks ended September 26, 2025 and included in interest expense and other operating expenses, respectively, within the Company’s condensed consolidated statements of operations.

In March 2024, the Company entered into an amendment (“Eleventh Amendment”) to its senior secured term loan agreement, which reduced the interest rate spread on its senior secured term loan facility. As a result of this amendment, the Company incurred a loss on debt extinguishment of $50 during the thirty-nine weeks ended September 27, 2024, which represents the portion of unamortized deferred financing fees attributable to the lender that exited the loan syndicate. Arrangement fees of $775 and third-party transaction costs of $91 were expensed as incurred during the thirty-nine weeks ended September 27, 2024 and included ininterest expense andother operating expenses, respectively, within the Company’s condensed consolidated statements of operations.

Additionally, during the thirty-nine weeks ended September 26, 2025 and September 27, 2024, the Company made voluntary principal prepayments totaling $5,000 and $12,000, respectively, towards the senior secured term loan. In connection with the prepayments, the Company wrote-off unamortized deferred financing fees of $150 during the thirty-nine weeks ended September 26, 2025 and $146 and $462 during the thirteen and thirty-nine weeks ended September 27, 2024, respectively, which were included ininterest expense within the Company’s condensed consolidated statements of operations.

Asset-Based Loan Facility

On August 20, 2025, the Company entered into an amendment (“Eighth Amendment”) to its asset-based loan (the “ABL”) credit agreement, which extended the maturity date to August 20, 2030, eliminated the credit spread adjustment to the interest rate charged on borrowings and increased the aggregate letters of credit. There were no changes to the aggregate commitments of $300,000. The Eighth Amendment to the ABL was accounted for as a debt modification. The Company incurred transaction costs of $658, which were capitalized as deferred financing fees to be amortized over the term of the ABL, and are presented inother non-current assets in the Company’s condensed consolidated balance sheet.

As of September 26, 2025, the Company had reserved $40,484 of its ABL facility for the issuance of letters of credit and funds totaling $159,516 were available for borrowing under the ABL.

GreenLeaf Unsecured Note

The GreenLeaf Note matured on April 20, 2025, and the Company made the final principal payment of $5,000 during the thirty-nine weeks ended September 26, 2025. Previously, the Company made a scheduled principal payment of $5,000 towards the GreenLeaf Note during the thirty-nine weeks ended September 27, 2024. The GreenLeaf Note is presented at December 27, 2024 under the caption “Finance leases and other financing obligations” in the table above.

Convertible Notes

The net carrying value of the Company’s 2028 convertible senior notes as of September 26, 2025 and December 27, 2024 was:

The components of interest expense on the Company’s convertible notes were as follows:

Note 9 –Stockholders’ Equity

Equity Awards

The following table reflects the activity of RSAs and RSUs during the thirty-nine weeks ended September 26, 2025:

The Company granted 992,363 RSAs and RSUs to its employees and directors at a weighted average grant date fair value of $63.05 during the thirty-nine weeks ended September 26, 2025. These awards are a mix of time-, market- and performance-based grants that generally vest over a range of periods up tofive years. The Company recognized expense on its RSAs and RSUs totaling $4,345 and $3,813 during the thirteen weeks ended September 26, 2025 and September 27, 2024, respectively, and $12,689 and $11,349 during the thirty-nine weeks ended September 26, 2025 and September 27, 2024, respectively. No share-based compensation expense has been capitalized.

At September 26, 2025, the total unrecognized compensation cost for unvested RSAs and RSUs was $29,236 and the weighted-average remaining period was approximately 1.8 years. Of this total, $17,716 related to awards with time-based vesting provisions and $11,520 related to awards with performance- and market-based vesting provisions. At September 26, 2025, the weighted-average remaining period for time-based vesting and performance-based vesting RSAs and RSUs were approximately 1.7 years and 1.9 years, respectively.

Performance-Based Restricted Share Units

In February 2025, the Company’s Board of Directors approved a grant of a total of 541,375 performance-based restricted share units (“PSUs”) to certain of the Company’s officers and employees under the Company’s 2019 Omnibus Equity Incentive Plan. The PSUs, which have afour-year term from the date of grant, are subject to service and performance conditions and will only become vested and payable to the extent that a qualifying change in control occurs during thefour-year period. The fair value of these awards was $22,235, which was determined using a Monte Carlo simulation in order to model a range of possible future stock prices for the Company’s common stock. No share-based compensation expense has been recorded in fiscal 2025 for these PSUs.

Share Repurchase Program

In November 2023, the Company announced atwo-year share repurchase program in an amount up to $100,000. The remaining share purchase authorization was $67,617 at September 26, 2025. The Company is not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time.

Note 10 –Income Taxes

The Company’s effective tax rate was 32.6% and 30.0% for the thirteen weeks ended September 26, 2025 and September 27, 2024, respectively, and 28.0% and 30.0% for the thirty-nine weeks ended September 26, 2025 and September 27, 2024, respectively. The effective tax rate for the thirty-nine weeks ended September 26, 2025 reflects the annual effective tax rate estimated for the full fiscal year, adjusted for the net impact of discrete items related to a tax benefit from the vesting of stock awards during the period, partially offset by return to provision adjustments. The effective tax rate otherwise varies from the 21% statutory rate primarily due to state taxes and permanent adjustments.

As a result of a five year carryback allowed under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the Company carried back its 2020 federal income tax loss, which resulted in a income tax refund receivable of $26,684 as of September 26, 2025. The receivable is reflected inprepaid expenses and other current assets on the Company’s condensed consolidated balance sheet.

On July 4, 2025, the United States enacted tax legislation through the One Big Beautiful Bill Act (“OBBBA”). The Company is in the process of assessing the impact of this legislation on its financial statements. The current expectation is that OBBBA will not have a material impact on the Company’s estimated annual effective tax rate in 2025, but will impact the split between current taxes payable and deferred taxes.

The Organization for Economic Co-operation and Development (the “OECD”) introduced a framework under Pillar Two which includes a global corporate minimum tax rate of 15%. Some jurisdictions in which the Company operates have started to enact laws implementing Pillar Two, including Canada which enacted the rule in June 2024. The Company is monitoring these developments and currently does not believe the rules effective in fiscal 2025 will have a material impact on its consolidated financial statements.

Note 11 –Segment Information

The Company’s business consists ofthree operating segments: East, Midwest and West that aggregate intoone reportable segment, foodservice distribution, which is concentrated primarily in the United States.

The accounting policies of the foodservice distribution segment are the same as those for the consolidated company. The Company’s chief operating decision maker, who is the Company’s chief executive officer, uses gross profit as the measure of profit or loss to assess segment performance and allocate resources.

Consolidated gross profit, reported on the statement of operations and comprehensive income, is used to evaluate whether to reinvest profits into the foodservice distribution segment or into other parts of the entity, such as for acquisitions or to repurchase its common shares. Additionally, gross profit is used to monitor budget versus actual results and in competitive analysis by benchmarking to the Company’s competitors. Consolidated total assets, reported on the balance sheet, is the measure of segment assets.

The following table presents information about the Company’s foodservice distribution segment:

(1)The Company’s revenue is disaggregated by geographic area based on sales office location. No country outside of the United States had revenue greater than 10% of consolidated revenue for the thirteen and thirty-nine weeks ended September 26, 2025 and September 27, 2024.

(2)Non-production costs represent the net purchase price paid for products sold, plus the cost of transportation necessary to bring the product to the Company’s distribution facilities. Non-production costs include purchase incentives and product purchase credits from certain vendors.

(3)Food processing costs include but are not limited to, direct labor and benefits, applicable overhead and depreciation of equipment and facilities used in food processing activities.

(4)Food processing costs included $242 and $300 of depreciation expense for the thirteen weeks ended September 26, 2025 and September 27, 2024, respectively and $760 and $962 for the thirty-nine weeks ended September 26, 2025 and September 27, 2024, respectively.

Refer to the condensed consolidated statements of operations and comprehensive income for the reconciliation of consolidated gross profit, which is the Company’s segment measure of profit or loss, to consolidated income before income taxes.

Note 12 –Supplemental Disclosures of Cash Flow Information

Note 13 –Subsequent Events

On October 1, 2025, the Company entered into an asset purchase agreement to acquire substantially all of the assets of Italco Food Products, a specialty food distributor based in Denver, Colorado. The purchase price was $16,500, consisting of $5,500 cash paid at closing and $11,000 from the issuance of an unsecured note and is subject to customary working capital true-ups. The assets acquired consist primarily of inventory, accounts receivable and goodwill and other intangibles and are not material to the Company’s consolidated financial statements.