What Performance Food Group Company told the SEC could break it.

PFG's distribution fleet is exposed to diesel-fuel prices — a 10% increase would add ~$26.3M to fuel costs — partially mitigated by customer fuel surcharges and costless-collar hedges (~15% of expected gallons).

“Using published market price projections for diesel and estimates of fuel consumption, a 10% hypothetical increase in diesel prices from the market price would result in a potential increase of approximately $26.3 million in fuel costs included in operating expenses on the consolidated statements of operations. As discussed above, this increase in fuel costs would be partially offset by fuel surcharges passed through to our customers.”

PFG is subject to extensive food-safety regulation (FDA, USDA, state/local health departments), notably the FDA Food Safety Modernization Act, which imposes prevention-based supply-chain controls, regulates imported food, grants FDA mandatory recall authority, and has expanded its compliance requirements.

“The FDA Food Safety Modernization Act (the “FSMA”) imposes comprehensive, prevention-based controls across the food supply chain, further regulates food products imported into the United States, and provides the FDA with mandatory recall authority. The FDA has finalized FSMA regulations for implementation, which have significantly expanded our food safety requirements.”

PFG obtains substantially all of its foodservice products from third-party suppliers and typically has no long-term contracts; suppliers may fail to provide products in the needed quantities, timeframe or at requested prices, disrupting supply or raising costs.

“We obtain substantially all of our foodservice and related products from third-party suppliers. We typically do not have long-term contracts with our suppliers. Although our purchasing volume can sometimes provide an advantage when dealing with suppliers, suppliers may not provide the foodservice products and supplies needed by us in the quantities and timeframe and at the prices requested.”