Ladies and gentlemen, thank you for standing by and welcome to the UNFI fourth quarter fiscal 2020 earnings call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you will need to press star, one on your telephone. Please be advised that today’s conference is being recorded. If you require any further assistance, please press star, zero. I would now like to hand the conference over to your speaker today, Steve Bloomquist, Vice President, Investor Relations. Thank you, please go ahead, sir.

Good morning everyone. Thank you for joining us on UNFI’s fourth quarter fiscal 2020 earnings conference call. By now, you should have received a copy of the earnings release issued yesterday afternoon. The press release, webcast, and a supplemental slide deck are available under the Investors section of the company’s website at www.unfi.com. Joining me for today’s call are Steve Spinner, our Chairman and Chief Executive Officer; John Howard, our Chief Financial Officer; Chris Testa, President of UNFI, and Eric Dorne, our Chief Operating Officer. Steve, Chris and John will provide a business update, after which we’ll take your questions. Before we begin, I’d like to remind everyone that comments made by management during today’s call may contain forward-looking statements. These forward-looking statements include plans, expectations, estimates and projections that might involve significant risks and uncertainties. These risks are discussed in the company’s earnings release and SEC filings. Actual results may differ materially from the results discussed in these forward-looking statements. Lastly, I’d like to point out that during today’s call, management will refer to certain non-GAAP financial measures. Definitions and reconciliations to the most comparable GAAP financial measures are included in our press release. With that, I will now turn the call over to Steve.

Thank you Steve. Good morning everyone and thanks for joining us on our year end call. As you saw, in addition to reporting our fourth quarter and fiscal year results, we also announced the succession plan for my role as CEO. I’ll speak more about that shortly, but first we’ll discuss our fiscal 2020 results. We finished the fiscal year early last month and it truly was a monumental year for UNFI in many respects. Our financial results in the fourth quarter and for the year produced record sales and adjusted EBITDA, driven initially by the strength of our integration work and consumer demand driven by COVID as well as UNFI’s execution success. Fourth quarter sales grew 8% while adjusted EBITDA grew 28%, resulting in a 50 basis point expansion in our adjusted EBITDA margin. This strong margin performance is a testament to the efficiency of our network and our ability to generate operating leverage as we increase our top line. For the full year, we generated $284 million of free cash flow and reduced our net debt outstanding by nearly $390 million, exceeding our full year debt reduction expectations. Our net debt to adjusted EBITDA leverage ratio finished the year at four times, about a full turn lower than at the end of last year. Now, these results wouldn’t have been possible without the people and culture at UNFI, and I want to thank all UNFI associates for their outstanding focus and execution during what have been unprecedented times for our company and for our country. The passion and caring of our people and our company have been clearly demonstrated in recent months. During the early days of COVID, we proactively took action to manage the spike in demand from customers and consumers while prioritizing the health and wellbeing…

Thanks Steve, and good morning everyone. It is my pleasure to join today’s call to talk about key trends in our business as well as the drivers that differentiate UNFI and give us confidence for long term growth. I’ll also provide brief comments on operations and our retail results. As you saw in yesterday’s press release, we’ve changed our sales channel reporting. John will get into the details and rationale behind these changes that now focus on the size of the customer rather than the nature of the products purchased, but I’ll comment on the performance of each channel in the quarter. Fourth quarter sales to chains, our largest channel accounting for about 40% of sales, totaled $2.7 billion, an increase of 6.9% over last year on a comparable 13-week basis. Our fourth quarter chains growth rate includes a 270 basis point headwind from three customer bankruptcies that occurred in the second quarter of fiscal ’20. Without that headwind, sales growth of chain customers would have been nearly 10%. Fourth quarter sales to independent retailers, our next largest channel, totaled $1.8 billion, accounting for about 26% of sales in the quarter. Independent retailer sales grew 11.4% compared to last year. Independents have benefited greatly during the past seven months, driven by a population migration from cities to suburbs and a growing consumer desire to shop in smaller footprint stores and support local businesses. Our third largest channel at 17% of sales in the fourth quarter is Supernatural and represents sales to our largest customer. Fourth quarter sales in this channel were $1.1 billion, 3.6% greater than last year. The growth in this quarter versus prior quarters is due in part to the impact of categories that had been adversely impacted by COVID, such as bulk and ingredients used for prepared…

Thank you Chris. On today’s call, I’ll cover our fourth quarter financial performance, balance sheet, capital structure, and outlook for fiscal 2021. Before I do that, let me address two of the accounting and reporting changes reflected in our fourth quarter and full year financial statements found in yesterday’s press release. As we discussed on our last call, we’ve moved our retail operations into continuing operations. As a result, the retail sales, gross profit and operating expenses from our retail operations will now be part of our statement of operations or P&L. Previously, these retail items were included within the single line entitled income from discontinued operations net of tax. There is no change to adjusted EBITDA as a result. We’ll begin depreciating the fixed assets of retail, which will add incremental expense to our GAAP and adjusted earnings, which I’ll elaborate on more in a moment. We’ve also changed our sales channel reporting to better reflect the underlying nature of our customer base. Our new channel breakdown reflects the continued move away from natural and conventional towards one UNFI and presents sales based on customer size, defined by store count rather than the predominant nature of products carried, meaning natural versus conventional. Customers who typically operate more than 10 stores are now presented in our chains sales channel, and those with fewer than that are presented as independent retailers. The definition of our Supernatural channel has not changed, with Whole Foods remaining the only customer currently included in this channel. The definition of our other channel remains substantially unchanged as well. This is explained in more detail in Footnote 1 of our press release. Lastly, as a reminder, we previously reported wholesale sales to Cub under the assumption that banner would be sold with a supply agreement. Now that…

Thanks John. As you heard, we will build our business in fiscal 2021 and beyond through wholesale, services, brands, protein, fresh, and so much more. We expect another year of strong growth which we expect will incrementally expand our EBITDA margin. We plan to further deleverage the balance sheet through continued focus on generating free cash, managing capex, and monetizing assets where it makes sense. We also remain firmly committed to being good stewards of our planet, our communities and our people. Over the past year, we’ve taken several steps to advance environmental, social and governance practices - ESG in our businesses, including the publication of our first SASB disclosure which measures UNFI’s sustainability efforts against a series of industry specific standards; two, completely a materiality assessment to prioritize initiatives; and three, establishing board-level oversight of our programs as well as an internal executive committee to provide strategic review and accountability on ESG topics. Our ESG program is aligned to three pillars: better for our world, better for our communities, and better for our people. As it relates to our world, we continue to focus on reducing our environmental impact, conserving natural resources and promoting sustainability across our value chain and in our operations. In early 2020, UNFI joined the Climate Collaborative, solidifying commitments to energy efficiency, food waste reduction, and sustainable transportation. As for our communities, we believe that healthy food and food variety matter, and we plan a vital role in delivering safe quality and nutritious food options to more tables across North America. We are also working to increase access to better food, particularly for people in low income and rural communities or in vulnerable situations. The UNFI Foundation provides grants to non-profit organizations working to build better food systems and to nurture everyday health. As for…

[Operator instructions] Your first question comes from Bill Kirk of MKM Partners. Your line is open.

Hey, thank you for taking the question. I wanted to talk a little bit about the upcoming holiday season and what you’re seeing, maybe in terms of actions by your retail customers. Are you seeing anything from them in terms of increasing inventory days that they’re willing to hold or pulling forward some of their holiday spending or holiday assortment?

Hey Bill, this is Chris. Good morning. The retailers are--you know, they’ve got limited space, so they would probably like to increase their inventory but they’re limited in what they can do. I can tell you from our perspective, two major things have happened. One, we began talking about the holidays early in the summer and began to build up on those holiday-like items - broth, cranberry sauce, pumpkin spice and so forth, because we think it’s going to be a big holiday season with a lot of small gatherings versus big gatherings. From a retailer perspective, the one behavior that we’re seeing is at our recent show, there was a huge interest from our retailers to secure inventory ahead of time; in other words, commit to the inventory to be delivered to make sure their shelves were stocked. Then finally, for any of those products that are still long term out-of-stocks, and we all know what they are, we’ve been finding alternative supply for our retailers to make sure the shelves are full for the holiday season.

Okay, great. Then I guess related, what are you seeing in terms of freight lanes or freight availability for this holiday season?

Bill, this is Eric. We are seeing increased requests for freight lanes. We obviously have a great deal of strength in that and we are leveraging our size to secure the lanes we need, so at this time we do not see an issue with that but we’re watching it very carefully.

Yes, remember Bill that the vast majority of fleet, we own and operate, and for the product that we move cross country or by rail, we do have contract carriers with contracted volume, so that’s not a problem that we’re going to face.

Awesome, thank you. I’ll hop back in the queue.

Your next question comes from Karen Short of Barclays. Your line is open.

Hi, thanks very much. Congratulations Steve - been talking to you for a long time. I know we’ll get a few more quarters in there, but congratulations.

Thanks Karen.

I’m sorry to start off with this, but there’s just so many things model related so I do want to start with some housekeeping questions. I guess the first question I had with respect to retail EBITDA, are you [burdening] [ph] that EBITDA margin, so when I look at the margin are you [burdening] [ph] that with distribution costs, meaning allocating for distribution costs to retail, or if a seller and a buyer is looking at your EBITDA margins, would they need to hit that with additional distribution [indiscernible] distribution?

That’s a true EBITDA number, so if we were to look to sell that business today, that would be the EBITDA that we would sell it from. The other comment I would make about retail, just to remind everybody, that we do have some very valuable retail real estate, in other words corporately owned stores that when the time is right, we’ll also sell with the sale of the banner.

Okay, so it doesn’t--you are burdening with distribution. Then the second question, just in terms of modeling, can you give color on what comps were for retail in 4Q of ’19?

John, do you have that offhand? I don’t.

Yes, Q4 of ’19 for--Karen, when you ask that question, are you talking sales?

Index [indiscernible].

No, just to get a sense of what the two-year comp is, right, because obviously 21% is a very strong comp, but I’m trying to get that on a two-year basis.

Okay, so the comp from ’19--for ’19, with the ’18 data post acquisition, we don’t have the ’18 data.

Okay. Then I guess switching gears to the top line, obviously you gave us where you were trending in August, and this is more of a chain comment, but you gave us where you were trending on the top line and that was that 11% number, and you saw some deceleration. Can you just talk in terms of where you reported the quarter? I guess the first question is, where did you see the deceleration most prominently, and then where are you trending quarter to date on the top line?

Let me take a first cut at it and then I’ll turn it over to Chris. Again, in our chain number, we still have some of those--a couple of those bankrupt customers in there that we’re not getting the revenue from. We are also seeing some retailers that are negatively impacted by COVID, in other words, those retailers that are heavily focused on prepared foods, those categories that are just not selling. Obviously food service and military are still fairly negative even though food service has come back a bit. There’s certainly no inflation in the numbers, there’s no promo, and we don’t expect to see that, so I think those are the primary drivers in that 8% number. Chris?

That’s good, Steve. I mean, look - the general market dynamics as well, if you look at the quarter in its entirely from May through July, even if you look at retail comps that are reported out there, there’s definitely been a deceleration across the entire industry, but what I would look to is our top 100. If you look at our top 100, which is over 70% of our customers, it was 12%, so I think you can use that as your comparable to what is happening at retail after you factor in retail inflation and the difference between retail and wholesale there.

One thing I would add, Karen, is that the interesting thing that we learned as a result of the dramatic increase as a result of COVID is that our view of building capacity is different today than it was perhaps six months ago. We have more capacity than we thought, and so that was one of the great takeaways, so as a result of that we think that, and we’re very optimistic that our business that we thought would be constrained in many markets, we’re now actively addressing. In other words, we’re working hard to put protein and produce and a lot of other categories into these buildings that we thought were at capacity, which really aren’t.

Okay, that’s helpful. Sorry - just color on the top line in the quarter to date?

John, you want to handle that one?

Yes, I think we’re not providing any information beyond the annual guidance at this point, Karen. I think as we said in our script in our opening comments, we are continuing to expect the elevated demand through FY21. It’s unprecedented, we’re in uncharted territory as it relates to the pandemic, but we do believe that the FY21 guidance is sustainable. But as far as what we’re seeing so far in the first four or six weeks, we’re not going to provide commentary on that right now.

I would just add, we’re not seeing anything materially different.

Okay, great. Thanks very much.

Your next question comes from Rupesh Parikh of Oppenheimer. Your line is open.

Good morning, thanks for taking my question. Steve, also congrats on your future retirement.

Thanks Rupesh.

I guess to start out, John, you gave some color, I think at a high level, in terms of some of the EBITDA margin drivers. If you can maybe flesh out what you think are the key positive-negative drivers as we look out for the balance of the year, and it sounds like at least based on your guidance, you guys are expecting some very modest EBITDA margin expansion.

Yes, I think when we think about FY21, we certainly have some tailwinds related to the foundation that we laid from the integration as we continue to go through the productivity and benefit from the synergy work that’s already been done. We’re going to continue to see those tailwinds and certainly the elevated demand will provide that continued tailwind. But at the same time, we’ve got some headwinds going year-over-year as well, so we’ve got--as we’ve talked about in previous quarters, we’ll have the continued lower promotional spend and slotting fees that would normally benefit us, but they have substantially disappeared in this environment. We’re also seeing, as you look through our disc ops that have been reported, we’ve benefited in FY20 by certain Shoppers stores that provided EBITDA throughout the year but have since been sold or shut down, and that’s a $10 million to $15 million headwind for us going into FY21. We’ve got an additional headwind related to the life insurance proceeds that we talked about earlier in FY20 to the tune of about $8 million, so we’ve got certainly some tailwinds going in but we’ve got some of those headwinds as well from an operational, promotional spend, slotting dollars, disc ops. But we still believe--with all of the work that we’ve done leading up to this point, we still believe very firmly on the guidance range that we provided.

Rupesh, I would just add that keep in mind that ’20, even though it’s behind us, was an incredible year with a lot of adversity, and obviously you see that in the results. Again, we’re not going to have a repeat of what happened in March and April, at least we don’t think so. It is possible as the restaurants start to close for the winter, people start going back inside, it is possible that we’ll see some surge, but we still live in a pretty volatile environment, whether it’s because of COVID, elections, weather, additional costs associated with all those things. We live in a pretty volatile day. There’s also no inflation, there’s no promo spend that John mentioned earlier. We’re growing EBITDA faster than revenue, and as I said earlier, we realized that we actually have more capacity than we thought, and so we provided guidance because it was important for us to provide guidance. It’s guidance that we believe in, but it does take into consideration all the things I just mentioned.

Okay, great. Then I guess just going to capex [indiscernible], I think $200 million, $250 million for this year. Just given your commentary that you guys have more capacity maybe than what you guys thought previously, is there an opportunity, I guess, to reduce that capex spending number over time, or just any thoughts there?

Go ahead, John.

Our capex at $250 million, it’s still about 80 BPs of revenue for us. Some of that is some work that was targeted in FY20 that we thought we were going to be able to do but we did have, as you might imagine with the elevated demand, some of those projects were delayed, and we’re going to be implementing those in FY21. We are still working through some of the additional synergies as we go after that last stage of the initiatives that we’ll do in FY21 into ’22, so I think as we think about capex longer term, I think in that 80 BP range of revenue, 90 BP is probably reasonable, and then as we get on the other side of the last stage of the synergy work, I think we’ll see it normalize a little bit below that.

And automation is really important to us, Rupesh, as evidenced by the couple of pretty significant projects that we had going on during COVID that are going to be completed in the not-too-distant future. Services business, technology, that’s where we’re going to see really the primary spend of capex over the next couple years.

Great, thank you.

Your next question comes from Scott Mushkin of R5 Capital. Your line is open.

Hey guys, thanks for taking my questions. I have a couple of them. I just wanted to look back a little bit on the chains growth rate, which I know we talked about last quarter does seem like it’s underperforming the industry a little bit, even if you take into account the 270 basis point drag. I was wondering what you guys think is maybe driving that? I mean, it’s obviously a good number, but I just wonder what you think maybe is driving that, what look like a little bit of underperformance.

Hey Scott, this is Chris. Look - we’ve got a diverse customer base, right, and I think looking at--again, I would point to the top 100, which includes chains probably predominantly, as well as some of our indy co-ops. That 12% is really reflective of what they’re seeing at retail minus the inflation that retail enjoys that wholesale hasn’t had. But again, you look at chains at 10% with--you know, if you included the 270 BPs of the bankruptcies, it’s actually a pretty strong number, and within that we’ve got some chains that are growing 18, 20, 25%, some are 60 or 70%, and these again all in our top 50 or 100 customers. I think we feel really good about the chains growth, and if you combined our chains and indy combined, you’re looking at a number of around 9%, and then you add in the bankruptcies and you get to over 10%. I think what you’re seeing in our larger customers is indicative to what you’re seeing happening at the retail at large.

Thanks Chris. Just to follow up on that and then I’ll get to my other question, do you think you guys are seeing losses of customers, or you’re not seeing any losses?

No, we’re not seeing any losses.

So then my questions about the future are, number one, margin improvement in the distribution business, you guys tend to operate at a pretty low margin, the super value did too, but I do believe there’s lots of low hanging fruit there. Any thought processes on how ’21 will look on getting some improvement there and then into ’22? And then also, no one’s talked about it, but the replacement process for Steve - and by the way, Steve, congratulations.

Thank you, Scott. Why don’t I start with the replacement process? We have gone out and hired one of the leading firms to conduct a search, and that process has begun. We have serious internal candidates, we have external candidates that we’ll consider. Culture and experience are incredibly important to me and to the board. The good news is that I want this to be a very, very smooth process and we have a year in which to do it, which I think is more than enough time. I certainly plan on as executive chairman to continue through the transition and for as long as the company needs me to do it, so I can’t think of a better circumstance or scenario by which to pass the torch to the next leader, and I feel really good about it. I think for me personally, the 2020 numbers and what I expect to happen in 2021 really proved out the acquisition of conventional. We went out on a limb little bit to do it. I think investors initially didn’t like it, as evidenced by the stock price, but it was right on. It was 100% right, and you saw that in our numbers. We were able to leverage the top line into the bottom line and we’re going to continue to do that, and that goes right into your first question, which is on margin improvement. I think all the work that we’re doing in technology and integration and singular systems and network optimization are all going to have the net effect of improving our operating margin, reducing our expenses and improving our operating margin.

Yes Steve, I just want to add to that, that three big opportunities we have in the margin expansion is cross-selling, us selling more product to the existing customer base, and I think there’s a tremendous opportunity there as well as our brands and services business, which are both margin accretive to the typical wholesale margin. Just another area that we are aggressively pursuing to help with that margin expansion.

And our pipeline is incredible. Our pipeline has never been stronger than it is today. I think a lot of those opportunities came as a result of COVID, and certainly in the cases of the captives that rely heavily on UNFI to help them get product to the stores. A lot of that, we think will grow. New customers and expanded relationships with existing customers, especially in light of the new capacity, I’m more optimistic than I’ve ever been about the pipeline for growth.

Thanks guys, appreciate the answers.

Your next question comes from Jim Salera of Northcoast Research. Your line is open.

Hey guys, congrats on the quarter. Two questions I wanted to dig on, on the cross-selling opportunity. For the $250 million, can you guys break down how much of that is more the technology, ecommerce, professional service, and how much of it is more the organic and traditional products?

Yes Jim, this is Chris - sure. The vast majority is food on a truck versus the services business. Services business, there’s a lot of small wins from a revenue standpoint, although very high margins, but the vast majority of the 250 came from cross-selling products either natural products into the conventional system or vice versa.

Okay.

I would also add that the actual comment that Chris made earlier on our brands business- I mean, we now have brands that are over $2 billion at retail, and these are all brands that we own that many of the retailers view as their own private label. That obviously is quite margin accretive to us as well.

Can you guys actually get a little more granular, both on the margin profile for some of the professional services and then the private label, just relative to the traditional distribution margin?

Yes, I think actually that’s a competitive edge for us, so we’re not going to disclose what the margins are on our brands or our services. But rest assured, they’re considerably greater than the margins that we earn on our wholesale distribution.

Okay, and then if I can just sneak in one more question, you guys talked about the 300 or so online storefronts that you manage. Just generally, where do you think the opportunity is there, because obviously we’ve seen a lot of people shifting to that online platform and, as you guys touched on, the online shopping has really taken off three years in less than a year’s time, so where do you think the overall opportunity is when you look at your existing customer base and, I guess, additional customers you can pick up along the way?

Yes, it’s a good question. You know, ecomm was roughly 3% of total grocery sales going into COVID, and now it’s estimated to be up around 8% or 9%, so certainly having an ecomm solution is going to be critical for us going forward. In most cases, we enjoy ecomm sales because a lot of those click-and-collect and deliver-to-home are happening through the registers that we currently service; in other words, they’re retail customers that are wholesale customers of ours, that have an ecomm solution. Those 300 storefronts that we’ve added since COVID, those are typically the independent retailers that are looking to get more competitive and adapt to consumers’ needs. I think that’s one of the ways that we’ll capture ecomm, but that’s in addition to servicing some very large ecomm delivery company customers in addition to having our own ecomm platform through Honest Green and Easy options. We’re also, Jim, looking at additional ways to capture ecomm because it’s here, it’s here to stay, and we’re going to continue to find ways to participate in it.

Perfect, thanks guys.

Your next question comes from Edward Kelly of Wells Fargo. Your line is open.

Steve, congrats as well.

Thanks, Ed.

I wanted to ask you about guidance for next year. Maybe if you could just talk a bit more about the cadence of sales and EBITDA. Obviously the first half will look different than the back half. Any additional color you can provide on what you’re assuming in the back half as you lap the COVID demand?

Yes, absolutely. I think you touched on the key point there, Ed, which is as we lap the Q3 and Q4 and that demand that we saw, that surge that happened in March and April, which is our Q3, that will be a difficult comp for us. While we’re still anticipating the elevated demand through FY21 as food at home stays high, it’s going to be a tough comp year-over-year for that Q3. As we think about it, we are expecting that the first half will be a higher growth rate even though demand will stay at that elevated level, and then Q3 will tamper down some and Q4 will come back up. As we think about that full year, that’s sort of what we’re thinking. I think from a sales perspective, I don’t want to lose sight of the fact that as we think about FY21 and we’re anticipating that growth that we have in our guidance, we did see in Q3 and Q4 a year-over-year growth of $1.2 billion, and we’re still growing on top of that with FY21. We’re still seeing that elevated demand and we’re still going to benefit from that, and feel very good about that growth.

One other thing, Ed, is when you think about volatility, there is still a fair amount of volatility associated with fill rate, and while fill rate has sequentially improved and we’re now seeing fill rate on the natural side, I think it’s like 600 basis points or so better than the fill rate on the conventional side, so our expectation is that fill rate will continue to improve generally. We may see it decline around the holidays, but that’s still a moving target.

Okay, and then I wanted to just take a step back. I know you’re not going to give any guidance for FY22, but this is when hopefully life is more normal again. It’s probably the year that we should think about valuing the company at. What, if anything, has transpired within sales and margins over this period do you think is sustainable? How would you encourage us to think about the new normal for this business as we look past the pandemic?

Well, I would start by saying returning to normal takes quite a few current headwinds and turns them into tailwinds, right, so promo spend, advertising, new product introductions, fill rate, those are all things that are pretty significant headwinds for us that will turn into a tailwind. As we continue to complete the integration work, and that is the migration onto a singular technology platform, that turns from a headwind to a tailwind, all things we expect to happen. Capacity, certainly by 2022 we expect a considerably--an additional amount of customer wins through cross-selling as well as new contracts, so even though the restaurant industry will regain volume, I think we’ll still be in a great position to take advantage of all those things that are currently headwinds, that will then be tailwinds, led by what I said.

The only thing I’ll add to that, Ed, was in the interim, we are making permanent reductions in our debt as we’re benefiting from that free cash flow. We are reducing that debt, as we did in FY20, as we’re forecasting and guiding to in FY21. We are continuing to go after that debt.

Yes, remember that by ’22 or into ’22, we’re selling Cub, and you can do the math of what you expect Cub to sell for, plus another probably close to $200 million on real estate. That in itself will help continue to reduce the debt [indiscernible].

Great, thank you.

Today’s final question comes from Kelly Bania of BMO Capital Markets. Your line is open.

Good morning, this is Steve Caputo on for Kelly. Just to start, would you be able to provide us with what you achieved for synergies in 2020 and what your expectation is for 2021, and if there’s any change to your longer term targets? Then sort of related to that, on a scale of 1 to 10, how would you rate your integration in terms of the level of completeness and what we should expect to see going forward, and what you need to do?

As it relates to synergies, we’ll provide a little more color at the Q1 call, but as it relates to synergies, we have outperformed the $185 million target that we put out there, both in dollars and in the speed in which we thought it would take to get there, and we’re going to provide a lot more information on that as we get to our Q1 call and get into FY21. What was the second part of your question, Steve?

Just in terms of the integration, sort of on a scale of 1 to 10, if you can, where you would rank where you’ve gotten to so far and where you have to go, and any key areas left to integrate.

It’s tough to rank on a 1 to 10. I think what we have laid out there that we expected to achieve, I would say we’re at a 10, but we’re still--and it’s evidenced by the scale value, the leveraging value we’re seeing through our P&L with the elevated demand through FY20. A lot of that value was coming as a result of all the synergy work that went into place leading up to it. As we think about what’s left, the last big component, there’s a thousand things that need to happen beforehand to get there, but the last big piece is that standardization of our DCs that Steve mentioned a little bit earlier, and that’s one that we’re expecting to kick off towards the end of FY21 and into FY22 as the final stage of that synergy work.

Let me just add that the cultural integration is complete. The completion of all of our SG&A, sales, legal, finance, etc. has all been completed. Processes have been completed. The biggest single thing that remains is primarily from a technology platform, and that process has started. We expect that again to happen throughout fiscal ’22, but the vast majority of the work is done.

Okay, that’s very helpful. Sorry, just to clarify, you’ve said you achieved greater than your expected target of synergies already, which is great. Should we be continuing to think about additional synergies in future years on top of that, or have you just achieved what you expected even faster than you thought?

I think there’s still value to be had out there for synergies. I think we’re also continuing to look at optimization and productivity initiatives that will allow us to expand the value that we could achieve, not just from synergies but just into broader productivity and initiatives. We’ll talk a little bit more of this in Q1, and also we are currently working on scheduling an analyst day sometime towards the middle of FY21 for us.

Okay, thank you.

We’ll go through that in great detail.

Got it, okay. Then just one very quick follow-up to what Karen asked earlier. On the retail side, even if you don’t have specific numbers for any quarter, would you be able to give us a sense of where comp sales were trending pre-COVID? Just a general range would be really helpful for modeling purposes.

I think the way I would think about that would be, it was trending--you know, Cub is a market leader for us here in the Minneapolis market, and so the way I’d think about it is pre-COVID, I think it would be considered trending at or slightly above what the market would have been doing, especially given the market standing it has here in Minneapolis-St. Paul. As COVID hit, as many folks saw the value in their retail business, I think Cub was able to capitalize perhaps a little bit more because they were the market leader and as trusted retail store, and I think they also--as they went through some of the civil unrest situations, and we’ve talked about this on some of our non-deal road shows, but they did a great job managing through some of the civil unrest in downtown Minneapolis, providing access to food when obviously some of the stores were in total disruption and disarray . They provided access to food to many folks that needed it. We provided buses to other stores in order to provide access to food, and that helps build those relationships and give us the edge on the growth.

I would just add that not only were our indexes up over 20%, but our market share also increased significantly as well.

Okay, that’s very helpful. Thank you guys very much for the color.

Chris, we appreciate your help on today’s call. That concludes the management comments with Q&A. I will be in my office if anybody has any follow-up questions later today. Have a nice day everybody. Thank you.

Ladies and gentlemen, thank you for your participation. You may now disconnect.