JP FOODSERVICE INC, S-3, 1996-10-11

JP FOODSERVICE INC
S-3, 1996-10-11
GROCERIES, GENERAL LINE

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 11, 1996

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

JP FOODSERVICE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)

5141
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)

52-1634568
(I.R.S. EMPLOYER
IDENTIFICATION NO.)

------------------------

9830 PATUXENT WOODS DRIVE
COLUMBIA, MARYLAND 21046
(410) 312-7100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

LEWIS HAY, III
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
JP FOODSERVICE, INC.
9830 PATUXENT WOODS DRIVE
COLUMBIA, MARYLAND 21046
(410) 312-7100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)

------------------------

Copies to:

RICHARD J. PARRINO, ESQ.
SHAW, PITTMAN, POTTS & TROWBRIDGE
2300 N STREET, N.W.
WASHINGTON, D.C. 20037
(202) 663-8000
JOHN C. COATES IV, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
------------------------

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------

CALCULATION OF REGISTRATION FEE
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AMOUNT PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(1)(2)(3) FEE(3)
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<S> <C> <C> <C> <C>
Common Stock, par value $.01............. 6,429,028 shares $22.75 $146,260,387 $ 44,322
</TABLE>

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(1) Includes up to 729,028 shares of Common Stock which may be purchased by the
Underwriters to cover over-allotments, if any.

(2) Estimated pursuant to Rule 457(c) under the Securities Act solely for the
purpose of calculating the registration fee.

(3) In accordance with Rule 457(c), the aggregate offering price and
registration fee for 6,429,028 shares of Common Stock is based on an
estimated maximum offering price of $22.75 per share.
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

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<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED OCTOBER 11, 1996

PROSPECTUS
5,700,000 SHARES

LOGO
COMMON STOCK
------------------

All of the 5,700,000 shares of common stock (the "Common Stock") of JP
Foodservice, Inc. (the "Company" or "JP Foodservice") offered hereby (the
"Offering") are being sold by certain stockholders of the Company (collectively,
the "Selling Stockholders"). See "Selling Stockholders." The Company will not
receive any of the proceeds from the sale of the shares by the Selling
Stockholders. The Common Stock is quoted on the Nasdaq National Market under the
symbol "JPFS." On October 10, 1996, the last reported sale price of the Common
Stock, as reported on the Nasdaq National Market, was $24.25 per share. See
"Price Range of Common Stock and Dividend Policy."

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND SELLING
PUBLIC COMMISSIONS(1) STOCKHOLDERS
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<S> <C> <C> <C>
Per Share $ $ $
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Total(2) $ $ $
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</TABLE>

(1) For information regarding indemnification of the Underwriters, see
"Underwriting."

(2) The Selling Stockholders have granted to the Underwriters a 30-day option
to purchase up to 729,028 additional shares of Common Stock solely to
cover over-allotments, if any. See "Underwriting." If such option is
exercised in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Selling Stockholders will be $ ,
$ and $ , respectively.

------------------

The shares of Common Stock are being offered by the several Underwriters
named herein, subject to prior sale, when, as and if accepted by them and
subject to certain conditions. It is expected that certificates for the shares
of Common Stock offered hereby will be available for delivery on or about
, 1996, at the offices of Smith Barney Inc., 333 West 34th
Street, New York,
New York 10001.

------------------

SMITH BARNEY INC.
GOLDMAN, SACHS & CO.
THE ROBINSON-HUMPHREY COMPANY, INC.
RODMAN & RENSHAW, INC.
, 1996
<PAGE> 3

[COLOR MAP OF CURRENT DISTRIBUTION SERVICE AREA AND COLOR
PHOTOGRAPHS OF FOODSERVICE PRODUCTS AND OPERATIONS INSERTED
HERE]

IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

IN CONNECTION WITH THE OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP MEMBERS
(IF ANY) OR THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN TRANSACTIONS (INCLUDING
PASSIVE MARKET MAKING) FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS IN
THE COMMON STOCK OF THE COMPANY ON THE NASDAQ NATIONAL MARKET OR OTHERWISE IN
ACCORDANCE WITH RULES 10b-6, 10b-6A AND 10b-7 UNDER THE SECURITIES EXCHANGE ACT
OF 1934. SEE "UNDERWRITING."

2
<PAGE> 4

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents or portions of documents filed by the Company (File
No. 0-24954) with the Securities and Exchange Commission are incorporated herein
by reference: (a) the Company's Annual Report on Form 10-K for the fiscal year
ended June 29, 1996; (b) the Company's Current Reports on Form 8-K filed for
reportable events dated July 17, 1996, August 5, 1996, August 30, 1996 and
September 3, 1996; (c) the Company's Proxy Statement for the Annual Meeting of
Stockholders to be held on November 17, 1995; and (d) the description of the
Company's Common Stock which is contained in its Registration Statement on Form
8-A filed under the Securities Exchange Act of 1934, as amended, on October 14,
1994, including any amendments or reports filed for the purpose of updating such
description.

All reports and other documents subsequently filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing of such reports and documents. Any
statement contained in a document incorporated by reference herein shall be
deemed modified or superseded for purposes of this Prospectus to the extent that
a statement contained or incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.

The Company will provide without charge to each person to whom this
Prospectus is delivered a copy of any or all of such documents which are
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into the documents that
this Prospectus incorporates). Written or oral requests for copies should be
directed to Corporate Secretary, JP Foodservice, Inc., at the Company's
principal executive offices located at 9830 Patuxent Woods Drive, Columbia,
Maryland 21046, telephone number (410) 312-7100.

3
<PAGE> 5

PROSPECTUS SUMMARY

The following summary information is qualified in its entirety by, and
should be read in conjunction with, the more detailed information and the
Consolidated Financial Statements and related notes thereto and the Supplemental
Consolidated Financial Statements and related notes thereto appearing elsewhere
in this Prospectus and incorporated herein by reference. Unless reference is
made to fiscal 1996 or earlier fiscal years or the context otherwise requires,
as used in this Prospectus, the "Company" or "JP Foodservice" refers to JP
Foodservice, Inc. and its subsidiaries, including subsidiaries acquired in
fiscal year 1997. The Company's fiscal year is a 52-week or 53-week period
ending on the Saturday closest to June 30.

THE COMPANY

JP Foodservice is a leading broadline distributor of food and related
products to restaurants and other institutional foodservice establishments in
the Mid-Atlantic, Midwestern and Northeastern regions of the United States and
in Las Vegas, Nevada. The Company ranks as the nation's fifth largest broadline
distributor based on pro forma 1995 calendar year net sales, including the
results of its acquisitions of Valley Industries, Inc. and its affiliates (the
"Valley Acquisition"), Arrow Paper and Supply Co., Inc. and its affiliates (the
"Arrow Acquisition") and Squeri Food Service, Inc. and its affiliate (the
"Squeri Acquisition") (collectively, the "Acquisitions") which were completed in
the first two quarters of fiscal 1997. JP Foodservice believes that it is one of
the three leading broadline distributors in each of its principal geographic
service areas, which it defines as the areas within a 150-mile radius of each of
its 12 full-service distribution centers. The Company markets and distributes
over 30,000 national, private and signature brand items to over 34,000
foodservice customers, including restaurants, hotels, healthcare facilities,
cafeterias and schools. This diverse customer base encompasses both independent
(or "street") and multi-unit (or "chain") businesses, including Old Country
Buffet, Perkins Family Restaurants, Subway, Compass Group, Ruby Tuesday,
Pizzeria Uno and other foodservice establishments. The Company also is a
foodservice supplier to the United States Congress, Fenway Park and other
prominent institutions. The Company's comprehensive product line includes canned
and dry food products, fresh meats, poultry, seafood, frozen foods, fresh
produce, dairy and other refrigerated products, paper products, cleaning
supplies, light restaurant equipment and other supplies. This broad product line
provides the Company's customers with a single source to satisfy substantially
all of their foodservice needs.

In recent years, the Company has grown at a significantly greater rate than
that of the foodservice distribution industry. The Company's net sales increased
7.7% in fiscal 1995 and 12.1% in fiscal 1996, compared to the foodservice
distribution industry's growth of approximately 3.0% for the same periods. The
Company's net sales have increased predominantly as a result of internal
expansion through continued growth in street account and chain account sales. In
addition, the Company acquired Tri River Foods Inc. and certain assets of
Rotelle, Inc. in the fourth quarter of fiscal 1995 and the second quarter of
fiscal 1996, respectively, which accounted for net sales growth of approximately
2.0% in fiscal 1996. The Company's gross profit margin improved from 16.7% in
fiscal 1994 to 16.8% in fiscal 1995 and 17.2% in fiscal 1996. This improvement
resulted in part from an increase in sales of private and signature brand
products as a percentage of the Company's net sales from approximately 12% in
fiscal 1995 to approximately 15% in fiscal 1996. As a result, the Company's
income from operations increased 11.6% in fiscal 1995 and 18.0% in fiscal 1996
over the prior corresponding periods.

COMPETITIVE STRENGTHS

JP Foodservice believes that its primary competitive strengths are the
following:

- Leading Market Position. The Company's large-scale operations provide it
with significant name recognition and operating efficiencies. In
addition, the scope of its distribution network gives the Company the
ability to offer its growing chain customers a consistent array of
products and services across a broad geographic area encompassing
approximately one-half of the U.S. population. The size and diverse
nature of its customer base reduces the Company's dependence on any
individual customer or chain account to sustain growth or profitability.

4
<PAGE> 6

- Diverse High-Quality Product Line. The Company's product line is one of
the largest in the industry. Compared to its principal competitors, the
Company devotes a larger portion of its product line to national brand
products, which accounted for approximately 85% of net sales in fiscal
1996. The Company also offers its customers an expanding line of
quality-assured, value-priced products under its JP(TM), JP Power(TM) and
Harvest Value(TM) private brands. In recent years, the Company has
introduced an exclusive line of signature products, which are comparable
in quality to national brand items and priced competitively with such
items. Signature products are currently marketed under the Roseli(TM),
Hilltop Hearth(TM), Cattlemen's Choice(TM), Patuxent Farms(TM), el
Pasado(TM) and Rituals(TM) brands. In fiscal 1997, the Company plans to
continue development and expansion of a full line of Oriental-style
products under its Beijing Chef (TM) signature brand and to introduce a
full line of seafood products under its Harbor Banks(TM) signature brand.
The Company, unlike certain of its competitors, utilizes centralized
purchasing, which promotes a consistently high level of quality for its
proprietary brand products throughout the Company's distribution network.

- Superior Customer Service. The Company believes it has one of the best
records in the industry in providing customers with accurate and timely
delivery of product orders. The Company has achieved its superior
customer service by (i) employing a decentralized operating strategy that
enables the Company to be more responsive to customer needs, (ii)
utilizing proprietary information systems for managing inventory,
processing orders and scheduling deliveries and (iii) providing an array
of value-added services designed to assist its customers in managing
their foodservice operations more efficiently and profitably. The
Company's value-added services include advice and assistance on product
selection, menu planning and recipes, nutritional information, inventory
analysis, product costing and marketing strategies, and in-service
training of customer personnel.

- Low Cost Structure. Management believes that the Company's overall cost
structure is lower than that of many of its principal competitors. The
Company's modern, large-scale distribution centers enable it to realize
cost savings in branch overhead, warehouse operations and transportation
services. The Company has centralized only those functions that benefit
from significant economies of scale or require consistent application of
management controls, such as purchasing, finance and accounting,
advertising and promotion, and information systems. The Company's
information systems allow it to reduce administrative costs and improve
responsiveness to operational requirements at the branch level.

- Proprietary Information Systems. The Company has made a significant
investment in sophisticated and integrated information systems, which it
believes are among the most advanced in the industry. The ordering,
shipment, storage and delivery of the Company's products are managed
through a centralized information system that allows all of the Company's
distribution facilities and its corporate headquarters to access
information on a "real time" basis regarding the Company's inventory,
product availability, customers, sales, financial reports, truck routing
and other significant operating areas. In coordination with this system,
the Company employs, at both the corporate and branch levels, a strategic
information system that allows it to analyze systematically the
profitability of customer accounts, sales territories and product groups.

BUSINESS STRATEGY

The Company's business strategy is to achieve internal growth and increased
profitability by increasing sales penetration of its existing accounts,
attracting new high-growth customers, expanding street account sales by
increasing the size of its commission sales force, increasing sales of its
proprietary signature and private brand products, and targeting rapidly growing
specialized markets, such as healthcare service providers.

JP Foodservice supplements internal expansion with a program of strategic
acquisitions to take advantage of growth opportunities from ongoing
consolidation in the fragmented foodservice distribution industry. The Company
seeks to increase penetration of its existing markets through "fold-in"
acquisitions of small, privately-owned distributors within its current markets
and to expand into new markets through acquisitions of larger-sized
distributors. The Company believes it can enhance the sales and profitability of
acquired businesses by eliminating redundant overhead expenses, reducing
purchasing costs, adding the Company's proprietary brands to the product lines
of the acquired businesses, and integrating such businesses into the Company's
marketing programs, centralized purchasing operations and information systems.
The Company's

5
<PAGE> 7

ability to compete for acquisition opportunities with other foodservice
businesses is enhanced by its financial resources, which include access to the
public capital markets.

RECENT ACQUISITIONS

During calendar 1995, the Company completed two fold-in acquisitions of
businesses with combined annual net sales of approximately $50 million in the
Company's Pennsylvania market. In the first quarter of fiscal 1997, the Company
extended the scope of its distribution network into the Western region of the
United States through its acquisition of Valley Industries, Inc. (together with
its affiliates, "Valley Foods"), a broadline distributor located in Las Vegas,
Nevada with a leading market share of the Las Vegas foodservice market. The
Company believes that Las Vegas is one of the country's fastest growing
foodservice markets. Valley Foods achieved net sales of $121.5 million in its
most recent fiscal year, which ended January 31, 1996, and recently entered into
prime vendor relationships with two large hotel-casinos. Valley Foods serves a
broad base of institutional foodservice customers, including casinos, hotels,
chain restaurants, schools, cafeterias and hospitals. Valley Foods distributes
over 4,000 foodservice products from its large, newly expanded distribution
center in downtown Las Vegas.

Also in the first quarter of fiscal 1997, pursuant to the Company's
strategy to increase penetration in its existing markets, the Company acquired
Arrow Paper and Supply Co., Inc. (together with its affiliates, "Arrow"), a
broadline distributor located in Connecticut serving the New England, New York,
New Jersey and Pennsylvania markets. Arrow achieved net sales of $74.6 million
in its most recent fiscal year, which ended December 29, 1995, and in November
1995 was awarded a contract from the State of Connecticut that is expected to
generate $18 million in annual sales.

In the second quarter of fiscal 1997, the Company acquired Squeri Food
Service, Inc. (together with its affiliate, "Squeri"), a broadline distributor
located in Ohio serving the Greater Cincinnati, Dayton, Columbus, Indianapolis,
Louisville and Lexington markets. The Squeri Acquisition fills a gap in the
Company's distribution network in the Midwestern region of the United States and
is expected to provide cost savings through distribution efficiencies. Squeri
achieved net sales of $85.1 million in its most recent fiscal year, which ended
December 31, 1995.

HISTORY

Portions of the Company's business date back to the formation of Monarch
Foods in 1853. In 1946, Monarch Foods was acquired by Consolidated Foods
Corporation (now named Sara Lee Corporation) and in 1967 was merged with Pearce,
Young, Angel ("PYA"), a Southeast institutional foodservice distributor. JP
Foodservice began operations in July 1989 following a management-led leveraged
acquisition (the "1989 Acquisition") of certain operations of PYA/Monarch, Inc.,
a wholly owned subsidiary of Sara Lee Corporation. In November 1994, the Company
completed its initial public offering of Common Stock as part of a
recapitalization (the "Recapitalization") which reduced the Company's
indebtedness and related interest expense and improved its operating and
financial flexibility. In August 1996, the Company consummated a public offering
of its Common Stock (the "August Offering") to raise funds primarily for
application in connection with the Acquisitions. The shares offered hereby by
the Sara Lee Foundation and Sara Lee Foodservice Holdings, Inc. (collectively,
the "Sara Lee Selling Stockholders") were acquired in the 1989 Acquisition and
the Recapitalization.

THE OFFERING

<TABLE>
<S> <C>
Offering..................................... 5,700,000 shares(1)
Common Stock outstanding..................... 22,210,088 shares(2)
Nasdaq National Market symbol................ JPFS
</TABLE>

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(1) Assumes no exercise of the over-allotment option granted to the Underwriters
to purchase up to 729,028 additional shares of Common Stock solely to cover
over-allotments, if any. See "Selling Stockholders."
(2) Does not include (i) 461,504 shares subject to stock options granted by the
Company under its stock option plans as of June 29, 1996 or (ii) 208,421
shares subject to options granted by the Company under employment agreements
entered into in connection with the Acquisitions.

6
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SUMMARY CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The following table presents, for the periods and at the dates indicated,
summary consolidated financial data of the Company on a historical basis. The
selected historical consolidated financial data (which does not include the
financial data of the entities acquired in the Acquisitions) has been derived
from the consolidated financial statements of the Company. Such data should be
read in conjunction with the Consolidated Financial Statements of the Company
and related notes included elsewhere in this Prospectus.

The Valley Acquisition and Squeri Acquisition are being accounted for under
the pooling of interests method of accounting. Following the publication of
combined financial results for the pooled entities, the financial position and
results of operations for the Company for historical periods, as set forth
below, will be restated to reflect the combined operations of the Company,
Valley Foods and Squeri. The Company plans to publish such combined financial
results prior to the completion of the Offering. Accordingly, it is expected
that the historical financial information set forth below will be restated in
the final amended registration statement consistent with the Supplemental
Consolidated Financial Statements included herein. The Arrow Acquisition is
being accounted for under the purchase method of accounting. Accordingly, the
financial data for Arrow will not be reflected in the Company's historical
results and there will be no adjustment to the historical financial data below
related to the Arrow Acquisition.

The pro forma information set forth below gives effect to the Acquisitions
and the August Offering. See "Unaudited Pro Forma Condensed Combined Financial
Statements."

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
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JUNE 29, 1996
--------------------------
JULY 2, 1994 JULY 1, 1995 ACTUAL PRO FORMA(1)
------------ ------------ ---------- ------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.................................................. $1,029,000 $1,108,253 $1,242,676 $1,523,893
Gross profit............................................... 171,883 186,351 213,689 264,839
Amortization of intangible assets.......................... 2,265 2,263 2,338 3,090
Stock compensation charge.................................. -- 709 -- --
Income from operations..................................... 29,537 32,951 38,873 48,608
Nonrecurring charge........................................ -- -- 1,517 1,517
Interest expense........................................... 30,711 20,419 13,339 13,251
Income (loss) before income taxes and extraordinary
charge................................................... (1,174) 12,532 24,017 33,943
Income (loss) before extraordinary charge.................. (1,815) 6,570 14,057 20,331
Net income (loss).......................................... (1,815) 1,980 14,057 20,331
Preference dividends....................................... (504) (40) -- --
Net income (loss) applicable to common stockholders........ (2,319) 1,940 14,057 20,331
PER SHARE DATA:
Net income (loss) per common share before extraordinary
charge................................................... $ (0.59) $ 0.59(2) $ 0.88(3) $ 0.93(3)
Net income (loss) per common share......................... (0.59) 0.17(2) 0.88(3) 0.93(3)
Weighted average number of shares of common stock
outstanding.............................................. 3,932,748 11,122,343 15,964,626 21,957,715
</TABLE>

<TABLE>
<CAPTION>
JUNE 29, 1996
------------------------
ACTUAL PRO FORMA(4)
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<S> <C> <C>
BALANCE SHEET DATA:
Working capital........................................................................... $114,684 $138,666
Total assets.............................................................................. 401,013 500,350
Long-term debt, excluding current maturities.............................................. 156,120 155,371
Stockholders' equity...................................................................... 119,274 195,865
</TABLE>

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(1) The pro forma Statement of Operations Data give effect to the consummation
of the Acquisitions and the August Offering as of June 29, 1996. See
"Unaudited Pro Forma Condensed Combined Financial Statements."

(2) Reflects a reduction in net income of $709 resulting from a one-time
non-cash stock compensation charge equal to $0.06 per common share.

(3) Reflects a reduction in net income of $933 resulting from the nonrecurring
charge (relating to the termination of merger discussions; see Note 3 to the
Consolidated Financial Statements included elsewhere in this Prospectus)
equal to $0.06 per common share actual, and $0.04 per common share pro
forma.

(4) The pro forma Balance Sheet Data assume that the Acquisitions and the August
Offering were consummated on June 29, 1996. See "Unaudited Pro Forma
Condensed Combined Financial Statements."

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<PAGE> 9

RISK FACTORS

In addition to the other information contained in this Prospectus,
prospective investors should consider carefully the following risk factors
relating to the Company and the Common Stock before making an investment in the
Common Stock offered hereby.

LOW MARGIN BUSINESS; ECONOMIC SENSITIVITY

The foodservice distribution industry is characterized by relatively high
inventory turnover with relatively low profit margins. A significant portion of
the Company's sales are made at prices that are based on product cost plus a
percentage markup. As a result, the Company's profit levels may be negatively
affected during periods of food price deflation, even though the Company's gross
profit percentage may remain relatively constant. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Results of
Operations."

The foodservice industry is sensitive to national and regional economic
conditions, and the demand for foodservice products supplied by the Company has
been adversely affected in past years by economic downturns. The Company's
operating results also are particularly sensitive to, and may be adversely
affected by, difficulties with the collectability of accounts receivable,
inventory control, competitive price pressures, severe weather conditions and
unexpected increases in fuel or other transportation-related costs. Although
these factors generally have not had a material adverse impact on the Company's
past operations, there can be no assurance that one or more of such factors will
not adversely affect future operating results.

ACQUISITION STRATEGY

The Company's business strategy emphasizes supplementing internal expansion
with acquisitions. See "Business -- Business Strategy -- Strategic
Acquisitions." There can be no assurance that the Company will successfully
identify suitable acquisition candidates, complete acquisitions, integrate
acquired operations into its existing operations or expand into new markets.
Further, there can be no assurance that acquisitions will not have an adverse
effect upon the Company's operating results, particularly in quarters
immediately following the consummation of such transactions, while the
operations of the acquired businesses are being integrated into the Company's
operations. Once integrated, acquired operations may not achieve levels of net
sales or profitability comparable to those achieved by the Company's existing
operations, or otherwise perform as expected. In addition, earnings may be
adversely affected by transaction-related expenses in the quarter in which an
acquisition is consummated. Management may determine that it is necessary or
desirable to obtain financing for such acquisitions through bank borrowings or
the issuance of debt or equity securities. Debt financing of any such
acquisition could increase the leverage of the Company. Equity financing of any
such acquisition may dilute the ownership of the Company's stockholders. There
can be no assurance that the Company will be able to obtain financing on
acceptable terms.

COMPETITION

The Company operates in highly competitive markets, and its future success
will depend in large part on its ability to provide superior service and
high-quality products at competitive prices. The Company encounters competition
from a variety of sources, including specialty and system foodservice
distributors and other broadline distributors. Some of the Company's competitors
have substantially greater financial and other resources than the Company. See
"Business -- Competition."

LABOR RELATIONS

Including the Acquisitions, approximately 1,100 employees, representing
approximately 32% of the Company's full-time employees and approximately 65% of
the employees employed in the Company's warehouse and distribution operations,
are members of 12 different local unions associated with the International
Brotherhood of Teamsters. In the spring of 1993, Squeri was involved in a labor
action with a local union. The expense relating to this action was not material.
The Company has not experienced any other labor disputes or work stoppages and
believes that its relations with its employees are satisfactory. A work
stoppage, however, could have a material adverse effect on the Company. See
"Business -- Employees."

8
<PAGE> 10

DEPENDENCE ON SENIOR MANAGEMENT

The Company's success is largely dependent on the skills, experience and
efforts of its senior management. The loss of the services of one or more of the
Company's senior management could have a material adverse effect on the
Company's business and development. To date, the Company generally has been
successful in retaining the services of its senior management. See "Management."

PROVISIONS WITH POSSIBLE ANTI-TAKEOVER EFFECTS

The Company's Certificate of Incorporation and By-Laws contain provisions
that may have the effect of discouraging certain transactions involving an
actual or threatened change of control of the Company. These provisions include
a requirement that the Board of Directors be divided into three classes with
approximately one-third of the Board to be elected each year. The classification
of directors has the effect of making it more difficult for stockholders to
change the composition of the Board. In addition, the Board of Directors of the
Company has the authority to issue up to 5,000,000 shares of preferred stock in
one or more series and to fix the powers, preferences and rights of any such
series without stockholder approval. The ability to issue preferred stock could
have the effect of discouraging unsolicited acquisition proposals or making it
more difficult for a third party to gain control of the Company, or otherwise
could adversely affect the market price of the Common Stock. In February 1996,
the Company adopted a shareholder rights plan under which preferred share
purchase rights generally will be triggered upon the acquisition (or certain
actions that would result in the acquisition) of 10% or more of the Common Stock
by any person or group or the acquisition (or certain actions that would result
in the acquisition) of additional Common Stock by any person or group owning 10%
or more of the Common Stock on February 19, 1996.

VOLATILITY OF MARKET PRICE FOR COMMON STOCK

From time to time after the Offering, there may be significant volatility
in the market price for the Common Stock. Quarterly operating results of the
Company or other distributors of food and related goods, changes in general
conditions in the economy, the financial markets or the food distribution or
foodservice industries, announcement of proposed acquisitions and failure to
complete announced acquisitions, unusual weather conditions or other
developments affecting the Company or its competitors could cause the market
price of the Common Stock to fluctuate substantially. In addition, in recent
years the stock market has experienced extreme price and volume fluctuations.
This volatility has had a significant effect on the market prices of securities
issued by many companies for reasons unrelated to their operating performance.

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

Future sales of substantial amounts of Common Stock in the public market
could adversely affect the market price of the Common Stock. As of the date of
this Prospectus, there are 22,210,088 outstanding shares of Common Stock. All of
the 5,700,000 shares offered in the Offering will be freely transferable without
restriction or further registration under the Securities Act of 1933, as amended
(the "Securities Act"), except that any shares held by an "affiliate" of the
Company (as that term is defined under Rule 144 of the Securities Act) will be
subject to the resale limitations of Rule 144. Of the Company's outstanding
shares, other than the shares offered hereby, 4,080,421 are "restricted
securities" within the meaning of Rule 144. Such restricted securities may not
be sold except in compliance with the registration requirements of the
Securities Act or pursuant to an exemption from registration, such as the
exemption provided by Rule 144.

The Company, certain of its executive officers and directors and the
Selling Stockholders (with respect to unsold shares of Common Stock) have agreed
that, for a period of 90 days after the date of this Prospectus (the "lock-up
period"), they will not, without the prior consent of Smith Barney Inc., offer,
sell, contract to sell or otherwise dispose of any shares of Common Stock or any
securities convertible into, or exercisable or exchangeable for, Common Stock
(subject, in the case of the Company, to an exception for the grant of options
and issuance of shares pursuant to the Company's stock plans). Such consent
permitting shares to be sold before the expiration of the lock-up period may be
granted without prior notice to the other stockholders of the Company or to any
public market in which the Common Stock trades. Upon the expiration of the lock-
up period, 2,926,569 shares of Common Stock will be eligible for sale in the
public market pursuant to Rule 144. The remaining restricted shares of Common
Stock will become eligible for sale pursuant to Rule 144 at various times
thereafter. See "Shares Eligible for Future Sale."

9
<PAGE> 11

The Company has granted certain registration rights with respect to the
shares of Common Stock beneficially owned by the Selling Stockholders and the
shares issued in connection with the Squeri Acquisition. If the Underwriters'
over-allotment option is not exercised in full, the Selling Stockholders will be
entitled to require the Company to use its best efforts to register under the
Securities Act the unsold shares covered by such option. Beginning on June 1,
1997, the Company will be obligated to use its best efforts to register up to
1,079,875 shares issued to the former Squeri stockholders. In addition, in
connection with any such registration or if the Company otherwise proposes to
register any shares of Common Stock under the Securities Act in the future, the
Selling Stockholders, certain management stockholders and the former
stockholders of Valley Foods, Arrow and Squeri are entitled to require the
Company, subject to certain conditions, to include all or a portion of their
shares in such registration. The registration rights described herein are
subject to certain notice requirements, timing restrictions and volume
limitations which may be imposed by the underwriters of an offering. The Company
is required to bear the expenses of all such registrations, except for
underwriting discounts and commissions. Following completion of the Offering
(assuming no exercise of the Underwriters' over-allotment option), 4,129,754
shares of Common Stock, or 18.6% of the total number of shares of Common Stock
outstanding, will be entitled to the benefits of such registration rights.

DIVIDEND POLICY

The Company does not anticipate declaring or paying cash dividends on the
Common Stock in the foreseeable future. The Company's ability to pay cash
dividends is limited by the terms of the Company's senior notes and the
Company's existing credit facility, consisting of a $110 million revolving
credit loan (the "Bank Facility"). See "Price Range of Common Stock and Dividend
Policy."

FORWARD-LOOKING STATEMENTS

This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and is subject to the safe-harbor
created by such sections. Such forward-looking statements include those
concerning the Company's business strategy, operations, economic performance,
financial condition and liquidity and capital resources. Such statements are
subject to various risks and uncertainties. The Company's actual results may
differ materially from the results discussed in such forward-looking statements
because of a number of factors, including those identified under this "Risk
Factors" section and elsewhere in this Prospectus. See the inside front cover
pages of this Prospectus, "Prospectus Summary," "Unaudited Pro Forma Condensed
Combined Financial Statements," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business." The
forward-looking statements are made as of the date of this Prospectus, and the
Company assumes no obligation to update the forward-looking statements or to
update the reasons why actual results could differ from those projected in the
forward-looking statements.

10
<PAGE> 12

USE OF PROCEEDS

All of the shares offered hereby are being sold by the Selling
Stockholders. The Company will not receive any of the proceeds from the sale of
such shares. The Company will pay certain expenses relating to the Offering,
estimated to be approximately $600,000.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Company's Common Stock began trading on the Nasdaq National Market on
November 16, 1994 under the symbol "JPFS." The following table sets forth the
range of high and low closing sale prices for the Common Stock as reported on
the Nasdaq National Market for the periods indicated.

<TABLE>
<CAPTION>
FISCAL YEAR HIGH LOW
-------------------------------------------------------------- ----- -----
<S> <C> <C>
1995
Second quarter (from November 16, 1994)..................... $11 1/2 $ 9 1/4
Third quarter............................................... 13 1/8 9 1/4
Fourth quarter.............................................. 14 3/8 10 7/8
1996
First quarter............................................... $17 3/4 $12 3/4
Second quarter.............................................. 19 1/2 15 1/4
Third quarter............................................... 22 1/4 18 1/4
Fourth quarter.............................................. 25 18 1/2
1997
First quarter............................................... $24 3/4 $20 3/4
Second quarter (through October 10, 1996)................... 24 1/4 22 3/4
</TABLE>

On October 10, 1996, the last reported sale price of the Common Stock as
reported on the Nasdaq National Market was $24.25 per share. There were
approximately 190 holders of record of the Common Stock on such date.

The Company has never declared or paid any cash dividends on its Common
Stock and does not anticipate declaring or paying any cash dividends on its
Common Stock in the foreseeable future. The current policy of the Company's
Board of Directors is to retain all earnings to support operations and to
finance the expansion of the Company's business. The agreement under which the
Company's senior notes were issued and the agreement for the Bank Facility
contain provisions limiting the Company's ability to pay cash dividends on the
Common Stock. See Note 10 to the Company's Consolidated Financial Statements.

11
<PAGE> 13

CAPITALIZATION

The following table sets forth, as of June 29, 1996, (i) the actual
capitalization of the Company and (ii) the pro forma combined capitalization of
the Company after giving effect to the Acquisitions and the August Offering.
This table should be read in conjunction with "Unaudited Pro Forma Condensed
Combined Financial Statements."
<TABLE>
<CAPTION>
AS OF JUNE 29, 1996
---------------------
ACTUAL PRO FORMA
-------- ---------
<S> <C> <C>
(IN THOUSANDS)

<CAPTION>
<S> <C> <C>
Short-term debt:
Current portion of obligations under capital leases................ $ 4,690 $ 4,690
-------- ---------
Total short-term debt......................................... $ 4,690 $ 4,690
======== ========
Long-term debt:
Bank Facility...................................................... $ 1,000 $ 251
Trade accounts receivable securitization........................... 49,378 49,378
Senior notes....................................................... 85,000 85,000
Mortgage notes..................................................... -- --
Related party indebtedness......................................... -- --
Offset Notes(1).................................................... 4,067 4,067
Obligations under capital leases................................... 16,675 16,675
-------- ---------
Total long-term debt.......................................... 156,120 155,371
-------- ---------
Stockholders' equity(2):
Preferred Stock, $.01 par value, 5,000,000 shares authorized; no
shares issued and outstanding
Common Stock, $.01 par value, 45,000,000 shares authorized;
16,025,929 shares issued and outstanding;
22,191,275 shares issued and outstanding, pro forma.............. 160 222
Additional paid-in capital......................................... 189,463 258,758
Accumulated deficit................................................ (25,406) (18,172)
Distribution in excess of net book value of continuing
stockholder's interest............................................ (44,943) (44,943)
-------- ---------
Total stockholders' equity.................................... 119,274 195,865
-------- ---------
Total capitalization.......................................... $275,394 $ 351,236
======== ========
</TABLE>

- ---------------
(1) See Note 10 to the Company's Consolidated Financial Statements.

(2) Does not include (i) 461,504 shares of Common Stock subject to stock options
granted by the Company under its stock option plans as of June 29, 1996 or
(ii) 208,421 shares subject to options granted by the Company under
employment agreements entered into in connection with the Acquisitions.

12
<PAGE> 14

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined financial statements
give effect to (i) the business combination between the Company and Valley Foods
accounted for as a pooling of interests, (ii) the business combination between
the Company and Arrow accounted for as a purchase, (iii) the business
combination between the Company and Squeri accounted for as a pooling of
interests and (iv) the August Offering. See "Prospectus Summary -- Recent
Acquisitions." The unaudited pro forma condensed combined statement of
operations for the fiscal year ended June 29, 1996 combines the following
historical condensed consolidated statements of operations: (i) the Company for
the fiscal year ended June 29, 1996; (ii) Valley Foods for the fiscal year ended
January 31, 1996; (iii) Arrow for the fiscal year ended December 29, 1995; and
(iv) Squeri for the fiscal year ended December 31, 1995. The unaudited pro forma
condensed combined statements of operations assume that the Acquisitions and the
August Offering occurred at the beginning of the period presented. The unaudited
pro forma condensed combined balance sheet combines the historical condensed
consolidated balance sheet of the Company as of June 29, 1996 with the
historical condensed consolidated balance sheets of Valley Foods as of January
31, 1996, Arrow as of December 29, 1995, and Squeri as of December 31, 1995,
respectively, and gives effect to the receipt and application of the net
proceeds of the August Offering.

The pro forma combined net income per share is based on the combined
weighted average number of shares of Common Stock of the Company and Common
Stock of the Company issued to former stockholders of Valley Foods and Squeri
for the period, based on the respective ownership percentages of the Company,
Valley Foods and Squeri in the combined entity after the Valley Acquisition and
after the Squeri Acquisition, as well as the number of shares issued in
connection with the Arrow Acquisition and the August Offering (assuming that
such shares are issued as of the beginning of the period presented). The pro
forma condensed combined balance sheet reflects the issuance of 1,936,494 and
1,079,875 shares of Common Stock of the Company in exchange for all shares of
Valley Foods and Squeri common stock outstanding, respectively, at June 29,
1996, as well as the issuance of 73,977 shares of Common Stock of the Company as
part of the consideration for the Arrow Acquisition and the issuance of
3,075,000 shares of Common Stock of the Company in connection with the August
Offering.

The unaudited pro forma condensed combined financial statements should be
read in conjunction with the Company's historical Consolidated Financial
Statements and the related notes thereto included elsewhere in this Prospectus.
The pro forma information is presented for illustrative purposes only and is not
necessarily indicative of the operating results or financial position that would
have occurred if the Acquisitions and the August Offering had been consummated
as presented in the accompanying unaudited pro forma condensed combined
financial statements, nor is it necessarily indicative of future operating
results.

13
<PAGE> 15

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 29, 1996
----------------------------------------------------------------------------------------
COMBINING
JP FOODSERVICE COMPANIES(a) COMBINED(b) ARROW ADJUSTMENTS(c) PRO FORMA
-------------- ------------ ----------- ------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net sales........................ $1,242,676 $206,627 $1,449,303 $74,590 $ -- $1,523,893
Cost of sales.................... 1,028,987 169,810 1,198,797 60,257 -- 1,259,054
------------ ---------- ---------- ------- ----------- ----------
Gross profit..................... 213,689 36,817 250,506 14,333 -- 264,839
Operating expenses............... 172,478 30,438 202,916 12,756 (2,531)(d) 213,141
Amortization of intangible
assets......................... 2,338 -- 2,338 -- 752 (e) 3,090
------------ ---------- ---------- ------- ----------- ----------
Income from operations........... 38,873 6,379 45,252 1,577 1,779 48,608
------------ ---------- ---------- ------- ----------- ----------
Other (income) expenses
Interest expense............. 13,339 1,848 15,187 1,055 (2,991)(f) 13,251
Nonrecurring charges......... 1,517 -- 1,517 -- -- 1,517
Other (income) expense....... -- 37 37 (140) -- (103)
------------ ---------- ---------- ------- ----------- ----------
Total other expenses............. 14,856 1,885 16,741 915 (2,991) 14,665
------------ ---------- ---------- ------- ----------- ----------
Income before income taxes....... 24,017 4,494 28,511 662 4,770 33,943
Provision for income taxes....... (9,960) (1,638) (11,598) (9) (2,005)(g) (13,612)
------------ ---------- ---------- ------- ----------- ----------
Net income....................... $ 14,057 $ 2,856 $ 16,913 $ 653 $ 2,765 $ 20,331
============ ========== ========== ======= =========== ==========
Net income per common share...... $ 0.88(h) $ 0.90 (h) $ 0.93(h)
============ ========== ==========
Weighted average number of common
shares outstanding............. 15,964,626 18,808,738 21,957,715
============ ========== ==========
</TABLE>

- ---------------

(a) Represents the combined results of Valley Foods and Squeri for the fiscal
years ended January 31, 1996, and December 31, 1995, respectively. The
Valley Acquisition and Squeri Acquisition will be accounted for under the
pooling of interests method.

(b) Represents the combined results of the Company, Valley Foods and Squeri.
These combined results will become the restated historical results of the
Company upon publication of financial results for periods inclusive of the
date of consummation of the respective transactions in accordance with
pooling of interests accounting.

(c) These adjustments do not include improvements to gross profit expected to
be achieved through improved purchasing leverage and cost savings from
distribution and other economies.

(d) Represents a reduction in officer compensation for Valley Foods, Arrow and
Squeri of $400, $1,531 and $600, respectively, based on employment
agreements entered into in connection with the consummation of the
Acquisitions.

(e) Represents amortization of goodwill related to the Arrow Acquisition.

(f) Represents a reduction of interest expense on debt to be repaid from
proceeds of the August Offering consisting of $1,313 for Valley Foods, $535
for Squeri, $1,055 for Arrow and $88 for the Company ($1,349 reduction in
pre-Acquisitions debt of the Company at an average interest rate of
approximately 6.50%).

(g) Represents (i) an increase in tax expense of $246 to reflect all operations
of Arrow as a C corporation for federal income tax purposes and (ii) an
increase in tax expense of $1,759 relating to the adjustments described in
notes (d), (e) and (f).

(h) Reflects a reduction in net income of $933 resulting from the nonrecurring
charge (relating to the termination of merger discussions with Sara Lee
Corporation) equal to $0.06 per common share actual, $0.05 per common share
combined and $0.04 per common share pro forma.

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

14
<PAGE> 16

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
JUNE 29, 1996
------------------------------------------------------------------------------
COMBINING
JP FOODSERVICE COMPANIES(a) COMBINED(b) ARROW ADJUSTMENTS PRO FORMA
-------------- ------------ ----------- ------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents..................... $ 11,613 $ 611 $ 12,224 $ 223 $ -- $ 12,447
Receivables, net of allowance................. 134,961 19,444 154,405 7,231 -- 161,636
Inventories................................... 72,758 11,380 84,138 6,972 -- 91,110
Current deferred tax asset.................... 670 289 959 80 (80)(c) 959
Other current assets.......................... 8,557 519 9,076 164 -- 9,240
----------- ------------ ---------- ------- --------- --------
Total current assets...................... 228,559 32,243 260,802 14,670 (80) 275,392
----------- ------------ ---------- ------- --------- --------
Property and equipment, net....................... 90,173 14,085 104,258 6,570 110,828
Goodwill and other intangible assets, net......... 82,281 82,281 30,084(d) 112,365
Other noncurrent assets........................... -- 1,417 1,417 574 (226)(c) 1,765
----------- ------------ ---------- ------- --------- --------
Total assets.............................. $401,013 $ 47,745 $ 448,758 $21,814 $29,778 $500,350
=========== =========== ========== ======= ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of senior debt............. $ -- $ 1,253 $ 1,253 $ 1,985 $(3,238)(e) $ --
Revolving bank line of credit................. -- 5,300 5,300 -- (5,300)(e) --
Current obligations under capital leases...... 4,690 382 5,072 -- (382)(e) 4,690
Accounts payable
Trade..................................... 93,884 13,797 107,681 5,904 -- 113,585
Related parties........................... 2,666 -- 2,666 -- -- 2,666
Accrued expenses.............................. 12,635 1,703 14,338 597 850(f) 15,785
----------- ---------- ---------- ------- --------- --------
Total current liabilities................. 113,875 22,435 136,310 8,486 (8,070) 136,726
----------- ---------- ---------- ------- --------- --------
Noncurrent liabilities
Senior debt................................... 135,378 9,720 145,098 10,940 (21,409)(g) 134,629
Subordinated debt with related parties........ 4,067 5,097 9,164 1,751 (6,848)(e) 4,067
Obligations under capital leases.............. 16,675 974 17,649 -- (974)(e) 16,675
Noncurrent deferred tax liability............. 11,744 644 12,388 27 (27)(c) 12,388
----------- ---------- ---------- ------- --------- --------
Total noncurrent liabilities.............. 167,864 16,435 184,299 12,718 (29,258) 167,759
----------- ---------- ---------- ------- --------- --------
Total liabilities......................... 281,739 38,870 320,609 21,204 (37,328) 304,485
----------- ---------- ---------- ------- --------- --------
Stockholders' equity
Common stock and additional paid-in capital... 189,623 1,641 191,264 50 67,666(h) 258,980
Retained earnings (accumulated deficit)....... (25,406) 7,234 (18,172) 560 (560)(i) (18,172)
Distribution in excess of book value of
continuing stockholder's interest........... (44,943) -- (44,943) -- -- (44,943)
----------- ---------- ---------- ------- --------- --------
Total stockholders' equity................ 119,274 8,875 128,511 610 67,106 195,865
----------- ---------- ---------- ------- --------- --------
Total liabilities and stockholders' equity........ $401,013 $ 47,745 $ 448,758 $21,814 $29,778 $500,350
=========== ========== ========== ======= ========= ========
</TABLE>

- ---------------

(a) Represents the combined financial position of Valley Foods and Squeri for
the fiscal years ended January 31, 1996 and December 31, 1995, respectively.
The Valley Acquisition and Squeri Acquisition will be accounted for under
the pooling of interests method.

(b) Represents the combined financial position of the Company, Valley Foods and
Squeri. These combined results will become the restated historical results
of the Company upon publication of financial results for periods inclusive
of the date of consummation of the respective transactions in accordance
with pooling of interests accounting.

(d) Represents goodwill associated with the Arrow Acquisition.

(e) Reflects receipt and application of net proceeds of the August Offering.

(f) Represents accrued Arrow Acquisition transaction costs.

(g) Reflects receipt and application of a portion of the net proceeds of the
August Offering as well as an additional $600 of debt incurred related to
fees associated with the Offering.

(h) Reflects the issuance of 3,075,000 shares of Common Stock and related net
proceeds of $66,616 received in the August Offering, the issuance of 73,977
shares of Common Stock valued at $1,700 in connection with the Arrow
Acquisition, the elimination of Arrow's common stock and additional paid-in
capital accounts and $600 of fees associated with the Offering.

(i) Reflects elimination of Arrow's retained earnings account.

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

15
<PAGE> 17

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

NOTE 1 -- Certain reclassifications, none of which is material, have been
made to the financial statements of Valley Foods, Squeri and Arrow in the
unaudited pro forma condensed combined financial statements to conform to
classifications of the Company. Other than the conforming adjustments related to
inventory valuation methods and taxes for Valley Foods and Squeri (see Notes to
Supplemental Consolidated Financial Statements) and other than as reflected in
the foregoing statements and the notes thereto, there are no material
adjustments required to the historical financial statements of the Company,
Valley Foods, Squeri and Arrow to arrive at the unaudited pro forma condensed
combined balance sheet and statements of operations.

NOTE 2 -- Total costs to be incurred by the Company, Valley Foods and
Squeri in connection with the Valley Acquisition and Squeri Acquisition are
estimated to be approximately $6.6 million. These costs, relating to legal,
printing, accounting, financial advisory services and other related expenses,
will be charged against income in the periods subsequent to the unaudited pro
forma condensed combined financial statements. Accordingly, the effects of these
costs have not been reflected in these unaudited pro forma condensed combined
financial statements. Total costs to be incurred by the Company in connection
with the Arrow Acquisition were $0.85 million. Such amount has been added to the
purchase price of Arrow in determining total costs to be allocated in purchase
accounting.

16
<PAGE> 18

SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS

The following supplemental consolidated financial statements give effect to
(i) the business combination between the Company and Valley Foods accounted for
as a pooling of interests and (ii) the business combination between the Company
and Squeri accounted for as a pooling of interests. These supplemental financial
statements will become the restated historical financial statements of the
Company upon the publication of combined financial results of the combining
companies covering a period subsequent to the Acquisitions. The following
supplemental consolidated statements of operations combine the following
historical consolidated statements of operations: (i) the Company for the three
fiscal years ended July 2, 1994, July 1, 1995 and June 29, 1996; (ii) the
corresponding historical consolidated statements of operations for the three
years ended January 31, 1994, 1995 and 1996, respectively, of Valley Foods; and
(iii) the corresponding historical consolidated statements of operations for the
three years ended December 31, 1993, 1994 and 1995, respectively, of Squeri. The
supplemental consolidated statements of operations assume the Valley Acquisition
and the Squeri Acquisition each occurred at the beginning of the earliest period
presented. The supplemental consolidated balance sheet combines the historical
consolidated balance sheet of the Company as of June 29, 1996 with the
historical consolidated balance sheets of Valley Foods as of January 31, 1996
and Squeri as of December 31, 1995.

The supplemental consolidated net income per share is based on the combined
weighted average number of shares of Common Stock of the Company and Common
Stock of the Company issued to former stockholders of Valley Foods and Squeri
for each period, based on the respective ownership percentages of the Company,
Valley Foods and Squeri in the combined entity after the Valley Acquisition and
the Squeri Acquisition. The supplemental consolidated balance sheet reflects the
issuance of 1,936,494 and 1,079,875 shares of Common Stock of the Company in
exchange for all shares of Valley Foods and Squeri common stock outstanding,
respectively at June 29, 1996.

17
<PAGE> 19

SUPPLEMENTAL CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
---------------------------------------------
JULY 2, 1994 JULY 1, 1995 JUNE 29, 1996
------------ ------------ -------------
<S> <C> <C> <C>
Net sales................................................ $ 1,180,028 $ 1,289,530 $ 1,449,303
Cost of sales............................................ 979,567 1,069,946 1,198,797
------------ ------------ -------------
Gross profit............................................. 200,461 219,584 250,506
Operating expenses....................................... 164,604 178,733 202,916
Amortization of intangible assets........................ 2,265 2,263 2,338
Stock compensation charge................................ -- 709 --
------------ ------------ -------------
Income from operations................................... 33,592 37,879 45,252
------------ ------------ -------------
Other (income) expenses
Interest expense.................................... 32,255 22,074 15,187
Nonrecurring charges................................ -- -- 1,517
Other expenses...................................... 222 (309) 37
------------ ------------ -------------
Total other expenses..................................... 32,477 21,765 16,741
------------ ------------ -------------
Income (loss) before income taxes........................ 1,115 16,114 28,511
Provision for income taxes............................... (1,515) (7,292) (11,598)
------------ ------------ -------------
Net income (loss) before extraordinary charge............ (400) 8,822 16,913
Extraordinary charge..................................... -- 4,590 --
------------ ------------ -------------
Net income (loss)........................................ (400) 4,232 16,913
Preference dividend...................................... (504) (40) --
------------ ------------ -------------
Net income (loss) applicable to common shareholders...... (904) 4,192 16,913
============ ============ ============
Weighted average number of shares outstanding............ 4,633,371 13,103,798 18,808,738
Net income (loss) per common share:
Before extraordinary charge......................... $ (0.20) $ 0.67 $ 0.90
Net income (loss) per common share.................. $ (0.20) $ 0.32 $ 0.90
============ ============ ============
</TABLE>

See Notes to Supplemental Consolidated Financial Statements.

18
<PAGE> 20

SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
JULY 1, 1995 JUNE 29, 1996
------------ -------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents....................................... $ 15,690 $ 12,224
Receivables, net of allowance................................... 139,775 154,405
Inventories..................................................... 77,577 84,138
Current deferred tax asset...................................... 659 959
Other current assets............................................ 8,729 9,076
------------ -------------
Total current assets....................................... 242,430 260,802
------------ -------------
Property and equipment, net.......................................... 94,701 104,258
Goodwill and other intangible assets, net............................ 76,594 82,281
Other noncurrent assets.............................................. 1,489 1,417
------------ -------------
Total assets............................................... $415,214 $ 448,758
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of senior debt............................... $ 2,329 $ 1,253
Revolving bank line of credit................................... 2,700 5,300
Current obligations under capital leases........................ 4,149 5,072
Accounts payable
Trade...................................................... 103,129 107,681
Related parties............................................ 5,308 2,666
Accrued expenses................................................ 13,498 14,338
------------ -------------
Total current liabilities.................................. 131,113 136,310
------------ -------------
Noncurrent liabilities
Senior debt..................................................... 140,803 145,098
Subordinated debt with related parties.......................... 8,357 9,164
Obligations under capital leases................................ 12,763 17,649
Noncurrent deferred tax liability............................... 12,054 12,388
------------ -------------
Total noncurrent liabilities............................... 173,977 184,299
------------ -------------
Total liabilities.......................................... 305,090 320,609
------------ -------------
Stockholders' equity
Common stock and additional paid-in capital..................... 189,462 191,264
Retained earnings (accumulated deficit)......................... (34,395) (18,172)
Distribution in excess of book value of continuing stockholder's
interest....................................................... (44,943) (44,943)
------------ -------------
Total stockholders' equity................................. 110,124 128,149
------------ -------------
Total liabilities and stockholders' equity........................... $415,214 $ 448,758
========= ==========
</TABLE>

See Notes to Supplemental Consolidated Financial Statements.

19
<PAGE> 21

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 --

Merger with Valley Foods. On August 30, 1996, the Company completed a merger
with Valley Foods, a broadline foodservice distributor located in Las Vegas,
Nevada, for a purchase price of approximately $40.7 million (net of indebtedness
assumed). Under the terms of the merger, accounted for as a pooling of
interests, the Company exchanged 1,936,494 common shares for all of Valley
Foods' common shares and ownership interests of an affiliate.

Merger with Squeri. On September 30, 1996, the Company completed a merger with
Squeri, a broadline foodservice distributor located in Cincinnati, Ohio, for a
purchase price of approximately $24.8 million (net of indebtedness assumed).
Under the terms of the merger, to be accounted for as a pooling of interests,
the Company exchanged 1,079,875 common shares for all of Squeri's common shares
and ownership interests of an affiliate.

NOTE 2 -- Certain reclassifications, none of which is material, have been made
to the financial statements of Valley Foods and Squeri in the supplemental
consolidated financial statements to conform to classifications of the Company.
Conforming adjustments related to inventory valuation methods and taxes have
been made to the historical financial statements of Valley Foods and Squeri to
arrive at the supplemental consolidated balance sheet and statements of
operations.

NOTE 3 -- Total costs to be incurred by the Company, Valley Foods and Squeri in
connection with the Valley Acquisition and the Squeri Acquisition are estimated
to be approximately $6.6 million. These costs, relating to legal, printing,
accounting, financial advisory services and other related expenses, will be
charged against income in the periods subsequent to the supplemental
consolidated financial statements. Accordingly, the effects of these costs have
not been reflected in these supplemental consolidated financial statements.

20
<PAGE> 22

SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The following table presents, for the periods and at the dates indicated,
selected statement of operations data and balance sheet data of the Company on a
consolidated basis. The selected historical consolidated financial data for each
of the three fiscal years in the period ended June 29, 1996 presented below are
derived from the consolidated financial statements of the Company, which have
been audited by Price Waterhouse LLP, independent accountants. Such data should
be read in conjunction with the Consolidated Financial Statements of the Company
and related notes included elsewhere in this Prospectus.

The selected unaudited pro forma consolidated financial data presented below
are based on the Consolidated Financial Statements of the Company included
elsewhere in this Prospectus, adjusted to give effect to the Acquisitions and
the August Offering. See "Unaudited Pro Forma Condensed Combined Financial
Statements."

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------------------------------------------
JUNE 29, 1996
-----------------------------
JULY 2, 1994 JULY 1, 1995 ACTUAL PRO FORMA(1)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales..................................................... $ 1,029,000 $ 1,108,253 $ 1,242,676 $1,523,893
Cost of sales................................................. 857,117 921,902 1,028,987 1,259,054
------------ ------------ ------------ -----------
Gross profit.................................................. 171,883 186,351 213,689 264,839
Operating expenses............................................ 140,081 150,428 172,478 213,141
Amortization of intangible assets............................. 2,265 2,263 2,338 3,090
Stock compensation charge..................................... -- 709 -- --
------------ ------------ ------------ -----------
Income from operations........................................ 29,537 32,951 38,873 48,608
Interest expense.............................................. 30,711 20,419 13,339 13,251
Nonrecurring charges.......................................... -- -- 1,517 1,517
Other income.................................................. -- -- -- (103)
------------ ------------ ------------ -----------
Income (loss) before income taxes and extraordinary charge.... (1,174) 12,532 24,017 33,943
Provision for income taxes.................................... (641) (5,962) (9,960) (13,612)
------------ ------------ ------------ -----------
Income (loss) before extraordinary charge..................... (1,815) 6,570 14,057 20,331
Extraordinary charge.......................................... -- (4,590) -- --
------------ ------------ ------------ -----------
Net income (loss)............................................. (1,815) 1,980 14,057 20,331
Preference dividends.......................................... 504 40 -- --
------------ ------------ ------------ -----------
Net income (loss) applicable to common stockholders........... $ (2,319) $ 1,940 $ 14,057 $ 20,331
============ ============ ============ ===========
PER SHARE DATA:
Net income (loss) per common share:
Before extraordinary charge............................... $ (0.59) $ 0.59(2) $ 0.88(3) $ 0.93(3)
Extraordinary charge...................................... -- (0.42) -- --
------------ ------------ ------------ -----------
Net income (loss) per common share............................ $ (0.59) $ 0.17(2) $ 0.88(3) $ 0.93(3)
============ ============ ============ ===========
Weighted average number of shares of common stock
outstanding................................................. 3,932,748 11,122,343 15,964,626 21,957,715

<CAPTION>
JUNE 29, 1996
-------------------------------------------------------------
ACTUAL PRO FORMA(4)
------------ -----------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital............................................... $ 87,816 $ 103,723 $ 114,684 $ 138,666
Total assets.................................................. 350,089 373,038 401,013 500,350
Long-term debt, excluding current maturities.................. 264,260 146,557 156,120 155,371
Mandatorily redeemable stock.................................. 2,388 -- -- --
Stockholders' equity (deficit)................................ (29,411) 103,371 119,274 195,865
</TABLE>

(2) Reflects a reduction in net income of $709 resulting from a one-time
non-cash stock compensation charge equal to $0.06 per common share.

(3) Reflects a reduction in net income of $933 resulting from the nonrecurring
charge (relating to the termination of merger discussions; see Note 3 to the
Consolidated Financial Statements) equal to $0.06 per common share actual
and $0.04 per common share pro forma.

(4) The pro forma Balance Sheet Data assume that the Acquisitions and the August
Offering were consummated on June 29, 1996. See "Unaudited Pro Forma
Condensed Combined Financial Statements."

21
<PAGE> 23

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

Overview. The Company's net sales have increased as a result of internal
expansion through continued growth in street account and chain account sales and
through acquisitions. The Company has increased its street account sales through
growth of its street sales force, improved sales productivity and the
implementation of new street sales promotion programs. The Company's chain
account sales have increased as a result of the continued growth in sales to
existing accounts and the development of relationships with new accounts. The
Company has supplemented internal growth with acquisitions completed in the
fourth quarter of fiscal 1995, the second quarter of fiscal 1996 and the
Acquisitions in the first two quarters of fiscal 1997. The Company's gross
profit margin has improved in part as a result of an increase in sales of
private and signature brand products as a percentage of the Company's net sales.

Fiscal Year. The Company's fiscal year ends on the Saturday closest to
June 30. Consequently, the Company occasionally will have a 53-week fiscal year.
Fiscal 1996, 1995 and 1994 each consisted of 52 weeks.

RESULTS OF OPERATIONS

The following table sets forth, for the last three fiscal years, certain
income and expense items expressed as a percentage of net sales.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
---------------------------------------------
JULY 2, 1994 JULY 1, 1995 JUNE 29, 1996
------------ ------------ -------------
<S> <C> <C> <C>
Net sales......................................... 100.00% 100.00% 100.00%
Cost of sales..................................... 83.30 83.19 82.80
------ ------ ------
Gross profit...................................... 16.70 16.81 17.20
Operating expenses................................ 13.61 13.57 13.88
Amortization of intangible assets................. 0.22 0.20 0.19
Stock compensation charge......................... -- 0.06 --
------ ------ ------
Income from operations............................ 2.87 2.98 3.13
Interest expense.................................. 2.98 1.84 1.07
Nonrecurring charges.............................. -- -- 0.12
------ ------ ------
Income (loss) before taxes and extraordinary
charge.......................................... (0.11) 1.14 1.94
Income taxes...................................... (0.06) (0.54) (0.80)
------ ------ ------
Income (loss) before extraordinary charge......... (0.17) 0.60 1.14
Extraordinary charge on early extinguishment of
debt............................................ -- 0.41 --
------ ------ ------
Net income (loss)................................. (0.17)% 0.19% 1.14%
====== ====== ======
</TABLE>

The principal components of expenses include cost of sales, which
represents the amount paid to manufacturers and growers for products sold, and
operating expenses, which include selling (primarily labor-related) expenses,
warehousing, transportation and other distribution costs, and administrative
expenses. Because distribution and administrative expenses are relatively fixed
in the short term, unexpected changes in the Company's net sales, such as those
resulting from adverse weather, can have a significant short-term impact on
operating income.

The Company sells a significant proportion of its products at prices based
on product cost plus a percentage markup. Periods of inflation in food prices
result in higher product costs, which are reflected in higher sales prices and
higher gross profits. The Company's operating results were positively affected
by estimated food price inflation of less than 0.5%, 0.5% and 0.7% in fiscal
1996, 1995 and 1994, respectively.

Gross margins generally are lower for chain accounts than for street
accounts. However, because there are typically no commission sales costs related
to chain account sales and because chain accounts usually have larger deliveries
to individual locations, sales and delivery costs generally are lower for chain
accounts than for street accounts.

22
<PAGE> 24

Gross margins are generally higher for private label products than for
national branded products of comparable quality. However, the Company incurs
additional advertising and other marketing costs in promoting its private label
products.

FISCAL 1996 COMPARED TO FISCAL 1995

Net Sales. Net sales increased 12.1% to $1.243 billion in fiscal 1996 from
$1.108 billion in fiscal 1995. Higher chain account and street sales both
contributed to the Company's sales growth in fiscal 1996. Sales generated by
foodservice businesses acquired by the Company in the last quarter of fiscal
1995 and the second quarter of fiscal 1996 accounted for 2.0% of this increase.
An increase of 15.9% in chain account sales reflected the continued growth in
sales to the Company's larger customers and, to a lesser extent, the development
of new chain account relationships, including the new prime supplier
relationship announced with Pizzeria Uno, which commenced in January 1996. As a
percentage of net sales, chain account sales increased to 46.7% in fiscal 1996
from 45.2% in fiscal 1995. Street sales increased 9.1% over fiscal 1995
primarily as a result of improved sales force productivity and the
implementation of new street sales promotion programs. Fiscal 1996 net sales
were adversely affected by severe winter weather conditions in a majority of the
Company's markets.

Gross Profit. Gross profit margin increased to 17.2% in fiscal 1996 from
16.8% in fiscal 1995. The increase was primarily attributable to increased sales
of the Company's private and signature brand products, which increased to 24.0%
of street sales at the end of fiscal 1996 up from 18.0% at the end of fiscal
1995. The increase in sales of private label products more than offset the
effects of the shift in customer mix to a higher percentage of sales to chain
accounts.

Operating Expenses. Operating expenses increased 14.7% to $172.5 million
in fiscal 1996 from $150.4 million in fiscal 1995 primarily as a result of the
increases in net sales. As a percentage of net sales, operating expenses
increased to 13.9% in fiscal 1996 from 13.6% in fiscal 1995. The increase in
operating expenses, as a percentage of net sales, resulted primarily from
increased costs incurred in connection with the promotion of private label and
signature brand products and costs associated with the adverse winter weather
conditions in a majority of the Company's markets in the third quarter of fiscal
1996.

Income from Operations. As a result of the increase in net sales, gross
profit margin and the absence of any charge corresponding to the one-time stock
compensation charge of $0.7 million recorded in fiscal 1995, income from
operations increased 18.0% to $38.9 million in fiscal 1996 from $33.0 million in
fiscal 1995. Operating margin increased to 3.1% in fiscal 1996 from 3.0% in
fiscal 1995.

Interest Expense. Interest expense decreased 34.7% to $13.3 million in
fiscal 1996 from $20.4 million in fiscal 1995. The decrease was primarily
attributable to the repayment or refinancing of substantially all of the
Company's indebtedness in connection with the Recapitalization consummated in
the second quarter of fiscal 1995.

Nonrecurring Charge. On February 19, 1996, the Company terminated
discussions with Sara Lee Corporation regarding a proposed combination of the
Company and Sara Lee Corporation's wholly-owned subsidiary, PYA Monarch, Inc. As
a result of the termination of these discussions, which began with a proposal
submitted by Sara Lee Corporation in November 1995, the Company wrote off the
costs incurred related to the proposed transaction (primarily legal and advisory
fees) of approximately $1.5 million.

Income Taxes. The provision for income tax for fiscal 1996 increased $4.0
million over the provision for fiscal 1995. The increase in the provision was
attributable to the Company's greater pretax profit level in fiscal 1996. The
Company's effective tax rate (before extraordinary charge) of 41.4% for fiscal
1996 decreased from the effective rate of 47.6% for fiscal 1995 primarily
because of the effect on fiscal 1995 operating results of the non-deductible
stock compensation charge of $0.7 million.

Extraordinary Charge. The Company incurred no extraordinary charge in
fiscal 1996. In fiscal 1995, in connection with the Recapitalization, the
Company incurred a $4.6 million extraordinary charge (net of tax benefits of
$3.1 million) for the write-off of deferred financing costs relating to existing
indebtedness, as well as other fees and expenses related to the early
extinguishment of debt.

FISCAL 1995 COMPARED TO FISCAL 1994

Net Sales. Net sales increased 7.7% to $1.108 billion in fiscal 1995 from
$1.029 billion in fiscal 1994. Higher chain account and street sales both
contributed to the Company's sales growth in fiscal 1995. An

23
<PAGE> 25

increase of 9.3% in chain account sales reflected the continued growth in sales
to the Company's larger customers and, to a lesser extent, the development of
new chain account relationships. As a percentage of net sales, chain account
sales increased to 45.2% in fiscal 1995 from 44.0% in fiscal 1994. Street sales
increased 6.5% over fiscal 1994 primarily as a result of improved sales force
productivity, the implementation of new street sales promotion programs and an
increase in the commission sales force. As part of the Company's strategy to
increase its street sales, the Company expanded its street sales force 12% in
fiscal 1995, with 75% of that increase occurring in the fourth fiscal quarter.
The rate of increase in street sales over the prior year accelerated during
fiscal 1995, from 3.8% in the first fiscal quarter to 7.9% in the fourth fiscal
quarter. Fiscal 1995 net sales also benefited from the general absence of the
severe weather conditions that adversely affected fiscal 1994 sales in certain
of the Company's markets.

Gross Profit. Gross profit margin increased to 16.8% in fiscal 1995 from
16.7% in fiscal 1994. The increase was primarily attributable to increased sales
of private label products. The increase in sales of private label products more
than offset the effects of the shift in customer mix to a higher percentage of
sales to chain accounts.

Operating Expenses. Operating expenses increased 7.4% to $150.4 million in
fiscal 1995 from $140.1 million in fiscal 1994 primarily as a result of the
increases in net sales. As a percentage of net sales, operating expenses
remained constant at 13.6% in fiscal 1995 and 1994. Increases in costs incurred
in connection with the Company's investment in street sales promotion programs
and in the expansion of its street sales force were offset by the costs savings
resulting from a higher percentage of sales to chain accounts.

Stock Compensation Charge. The Company incurred a one-time non-cash stock
compensation charge of $0.7 million relating to common stock offered to certain
management investors in the first quarter of fiscal 1995.

Income from Operations. As a result of the increases in net sales and
gross profit margin, income from operations increased 11.6% to $33.0 million in
fiscal 1995 from $29.5 million in fiscal 1994. Operating margin increased to
3.0% in fiscal 1995 from 2.9% in fiscal 1994.

Interest Expense. Interest expense decreased 33.5% to $20.4 million in
fiscal 1995 from $30.7 million in fiscal 1994. The decrease was primarily
attributable to the reduction in the Company's aggregate indebtedness and annual
interest rate on borrowings effected in the Recapitalization, which was
consummated in the second quarter of fiscal 1995.

Extraordinary Charge. In connection with the Recapitalization, the Company
incurred a $4.6 million extraordinary charge (net of tax benefits of $3.1
million) in the second quarter of fiscal 1995 for the write-off of deferred
financing costs relating to existing indebtedness as well as other fees and
expenses related to the early extinguishment of debt.

Income Taxes. The Company recorded an income tax provision of $6.0 million
in fiscal 1995, compared to an income tax provision of $0.6 million in fiscal
1994. The increase was due to the increase in taxable income.

LIQUIDITY AND CAPITAL RESOURCES

The Company historically has financed its operations and growth primarily
with cash flow from operations, borrowings under its credit facilities,
operating and capital leases and normal trade credit terms. The Company finances
its investment in inventory principally with trade accounts payable.

The Company's cash flow from operations was $10.2 million, $11.3 million
and $40.6 million in fiscal 1996, fiscal 1995 and fiscal 1994, respectively. The
significant cash flows in fiscal 1994 were related to a one-time improvement in
the Company's working capital management compared to the prior fiscal year.

The Company's working capital requirement generally averages between 9% and
10% of annual sales. The Company's working capital balance at June 29, 1996 was
$114.7 million.

As of June 29, 1996, the Company's long-term indebtedness, including
current portion, was $160.8 million, with an overall weighted average interest
rate of 7.6% (excluding deferred financing costs and costs of interest rate
swaps and interest cap arrangements). As of the same date, $1.0 million of
borrowings and $12.1 million of letters of credit were outstanding under the
Bank Facility and an additional $96.9 million remained available to finance the
Company's working capital requirements.

24
<PAGE> 26

During the fourth quarter of fiscal 1996, the Company strengthened its
liquidity position by applying $49.4 million in proceeds from the securitization
of trade receivables to reduce its outstanding borrowings under the Bank
Facility by the same amount. The effective interest rate on proceeds of the
securitization program is currently equivalent to LIBOR plus 30 basis points.
The application of such proceeds has enabled the Company to reduce the interest
rate on borrowings under the Bank Facility from LIBOR plus 87.5 basis points to
LIBOR plus 50 basis points.

The Company completed the sale of 3,000,000 shares of Common Stock in the
August Offering and generated $65.7 million in net proceeds. The net proceeds of
the August Offering were used to repay indebtedness assumed or discharged by the
Company in connection with the Valley Acquisition (approximately $24 million)
and the Arrow Acquisition (approximately $18.0 million) and to fund the cash
portion of the Arrow Acquisition (approximately $27.9 million). In September
1996, the Company received additional net proceeds of $1.6 million in the August
Offering from the sale of shares to cover over-allotments. The net proceeds not
applied to the foregoing uses were used for working capital and other general
corporate purposes.

The Company made capital expenditures of $18 million in fiscal 1996 and
$7.3 million in fiscal 1995, primarily for new trucks and trailers and the
expansion of the Company's distribution centers in Streator, Illinois and
Boston, Massachusetts. The expenditures for new trucks and trailers were
primarily funded from capital leases. The Company currently expects to make
capital expenditures of approximately $24 million in fiscal 1997, including
approximately $7 million to upgrade and expand its existing facilities.

The Company believes that the combination of cash flow generated by its
operations, additional capital leasing activity, borrowings under the Bank
Facility and the net proceeds of the August Offering are sufficient to enable it
to finance its growth and meet its projected capital expenditures and other
short-term and long-term liquidity requirements. Management may determine that
it is necessary or desirable to obtain financing for acquisitions through
additional bank borrowings or the issuance of new debt or equity securities.

QUARTERLY RESULTS AND SEASONALITY

Historically, the Company's operating results have reflected seasonal
variations. The Company experiences lower net sales and income from operations
during its third quarter, which includes the winter months. The following table
sets forth certain summary information with respect to the Company's operations
for the most recent eight fiscal quarters.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED JULY 1, 1995
--------------------------------------------------------
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales................................. $ 279,839 $ 272,405 $ 258,560 $ 297,449
Income from operations.................... 7,746 8,294 6,043 10,868
Operating margin.......................... 2.8% 3.0% 2.3% 3.7%
</TABLE>

<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 29, 1996
--------------------------------------------------------
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales................................. $ 310,760 $ 302,342 $ 295,803 $ 333,771
Income from operations.................... 9,242 8,909 7,445 13,277
Operating margin.......................... 3.0% 2.9% 2.5% 4.0%
</TABLE>

25
<PAGE> 27

BUSINESS

FOODSERVICE DISTRIBUTION INDUSTRY

Companies in the U.S. foodservice distribution industry purchase, store,
market and transport food products, paper products and other supplies and
food-related items to establishments that prepare and serve meals to be eaten
away from home. Net sales for the industry were approximately $129 billion in
1995. For the three-year period ended 1995, foodservice distribution sales
increased at a compounded annual rate of 2.4%, which was comparable to the rate
of increase in the U.S. gross national product during the same period.

Foodservice distribution companies generally are classified as "broadline,"
"specialty" or "system" distributors. Broadline distributors offer a
comprehensive range of food and related products from a single source of supply
and provide foodservice establishments with the cost savings associated with
large, full-service deliveries. Specialty distributors generally are small,
family-owned enterprises that supply only one or two product categories. System
distributors typically supply a narrow range of products to a limited number of
multi-unit businesses operating in a broad geographical area.

The foodservice distribution industry is extremely fragmented, with over
3,000 companies in operation in 1995. Nevertheless, over the last 20 years, the
industry has experienced substantial consolidation as larger distributors have
acquired small and regional distributors and have used their superior
competitive position to grow at the expense of smaller distributors.
Consolidation in turn has permitted large foodservice distributors to benefit
from various economies of scale produced by large, low-cost distribution
facilities, increased net purchasing power and the elimination of redundant
management and other overhead expenses. Larger distributors also have been able
to take advantage of more sophisticated management techniques and the
development of management information systems specifically designed to enhance
customer service and increase operating efficiency. The following table
illustrates the impact of these trends on the percentage of total net sales in
the industry generated by the largest broadline distributors during the periods
indicated.

<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET SALES
YEAR ENDED DECEMBER
31
-------------------
1985 1995
---- ----
<S> <C> <C>
Ten largest broadline distributors............................... 9.8% 21.2%
Fifty largest broadline distributors............................. 19.7 25.8
</TABLE>

Management anticipates further consolidation in the industry as smaller
specialty distributors confront increasingly difficult competitive challenges
from broadline companies that have access to the significant capital investment
needed to construct and equip large, efficient distribution centers, maintain a
modern fleet of delivery vehicles and develop the sophisticated information
systems required for cost-efficient operations. The Company believes that large,
well-capitalized broadline distributors generally will benefit from continuing
industry consolidation as well as from certain forecasted demographic and
economic trends. These trends include an increasing number of two wage-earner
families who eat meals away from home, the increasing availability of convenient
take-out meals and restaurant home delivery services and the increasing
affluence of the "baby boomer" segment of the population. In addition,
forecasted expansion of many chain restaurants is anticipated to generate
additional sales volume for broadline distributors that can satisfy the product
and delivery requirements of this customer segment.

26
<PAGE> 28

COMPETITIVE STRENGTHS

JP Foodservice believes that its primary competitive strengths are the
following:

Leading Market Position. The Company derives significant benefits from its
position as one of the three leading broadline distributors in each of its
principal geographic service areas. The Company's large-scale operations provide
it with significant name recognition and operating efficiencies. In addition,
the scope of its distribution network gives the Company the ability to offer its
growing chain customers a consistent array of products and services across a
broad geographic area encompassing approximately one-half of the U.S.
population. The size and diverse nature of the customer base reduces the
Company's dependence on any individual customer or chain account to sustain
growth or profitability.

Diverse High-Quality Product Line. The Company's product line is one of
the largest in the industry and enables the Company to provide a single source
of supply to its customers. To satisfy the needs of its diverse customer base,
the Company continually updates its product mix. Compared to its principal
competitors, the Company devotes a larger portion of its product line to
national brand products, which accounted for approximately 85% of net sales in
fiscal 1996. In addition to national brands, the Company provides its customers
with an expanding line of quality-assured, value-priced products under its
JP(TM), JP Power(TM) and Harvest Value(TM) private brands. The Company also
offers an exclusive line of signature products, which are comparable in quality
to national brand items and priced competitively with such items. Signature
products are marketed under the Roseli(TM), Hilltop Hearth(TM), Cattlemen's
Choice(TM), Patuxent Farms(TM), el Pasado(TM) and Rituals(TM) brands. The
Company, unlike certain of its competitors, utilizes centralized purchasing,
which promotes a consistently high level of quality for its proprietary brand
products throughout the Company's distribution network.

Superior Customer Service. The Company's focus on customer service ensures
accurate fulfillment of customer orders and on-time product delivery. During
fiscal 1996, the Company maintained an order fill rate that exceeded 98.4%,
excluding substituted products, and 99%, including substituted products, which
the Company believes is one of the highest order fill rates in the industry. The
Company's ability to maintain these rates is attributable to its sophisticated
inventory management system, professional centralized purchasing staff,
proprietary order fulfillment system and inbound freight management techniques.

The Company has achieved its superior customer service by employing a
decentralized operating strategy, utilizing proprietary information systems and
providing an array of value-added services. The Company's decentralized
operating strategy allows each of the Company's twelve distribution centers to
function as autonomous divisions. This approach, which permits the personnel of
each branch to control the branch's sales, marketing and distribution functions,
enables the Company to be more responsive to customer needs.

The Company's sophisticated information systems contribute significantly to
its ability to maintain high service levels. The information systems have the
flexibility to accommodate a range of customer requirements, and include
features that provide a variety of order entry alternatives for customers,
produce special price lists for key accounts and create customized reports and
data bases for customer use.

The Company offers its customers a broad range of value-added services to
assist them in managing their foodservice operations more efficiently and
profitably, including advice and assistance on product selection, menu planning
and recipes, nutritional information, inventory analysis, product costing and
marketing strategies, and in-service training of customer personnel.

Low Cost Structure. Management believes that the Company's overall cost
structure is lower than that of many of its principal competitors. The Company's
modern, large-scale distribution centers enable it to realize cost savings in
branch overhead, warehouse operations and transportation services. The Company
has centralized only those functions that benefit from significant economies of
scale or require consistent application of management controls, such as
purchasing, finance and accounting, advertising and promotion, and information
systems. The Company's information systems allow it to reduce administrative
costs and improve responsiveness to operational requirements at the branch
level.

Proprietary Information Systems. The Company has made a significant
investment in its proprietary information systems, which it believes are among
the most advanced in the industry, and continually upgrades those systems in an
effort to achieve additional cost reductions and operating efficiencies. The
ordering, shipment, storage and delivery of the Company's products are managed
through a centralized information

27
<PAGE> 29

system that allows all of the Company's distribution facilities and its
corporate headquarters to obtain information on a "real time" basis regarding
the Company's inventory, product availability, customers, sales, financial
reports, truck routing and other significant operating areas. The Company's
facilities utilize common information systems that permit them to access and
consolidate invoices, inventory data, customer records and financial
information, thereby ensuring consistency of product, sales and financial
information. In coordination with its integrated information systems, the
Company employs, at both the corporate and branch levels, a proprietary
strategic information system that allows it to analyze systematically the
profitability of customer accounts, sales territories and product groups.
Although the Company intends to integrate the entities acquired in the
Acquisitions into its information system, at the present time, these entities
are operating under their own information systems.

BUSINESS STRATEGY

The Company's business strategy is to target customers and product segments
that allow for internal growth and provide favorable profitability levels and to
take advantage through strategic acquisitions of growth opportunities resulting
from the industry's continuing consolidation.

Increased Sales to Existing Customers. The Company seeks to be the primary
broadline distributor to each of its customers, and believes that there is a
significant opportunity to increase sales penetration of its existing accounts.
The typical foodservice customer uses one broadline distributor for the majority
of its foodservice needs, but also relies on one or two additional broadline
distributors and a number of specialty and system distributors. Increased sales
to existing customers generally are more profitable than sales to new customers,
because they often do not require significant additional delivery expenses,
sales calls or other additional administrative services.

The Company's strategy also emphasizes supporting the growth of its
existing chain accounts. Many of the Company's current chain customers,
primarily restaurants, are experiencing more rapid sales growth than other types
of foodservice businesses. Because of the proven concepts of these chains and
the operating economies accruing to their large-scale operations, the Company
believes that the future growth prospects for these chains are significant.

Targeting of New Accounts. The fragmented nature of the industry favors
expansion of the Company's operations through an increase in market share. The
Company will continue to pursue its long-term strategy of increasing street
account sales as a percentage of net sales by attempting to expand sales to
street customers at a faster rate than sales to chain customers. To achieve
street account sales growth, the Company currently plans to continue to increase
the number of commission sales people that service such accounts. Management
believes that increased street account sales will contribute to the stability of
the Company's customer base by diversifying sales over a larger number of
customers. As independent operators, street customers are more likely than chain
customers to utilize the full range of value-added services offered by the
Company. Street account sales increased 6.5% in fiscal 1995 and 9.1% in fiscal
1996.

The Company also plans to target new chain customers which it believes
represent attractive growth opportunities. The Company intends to focus on those
accounts that are located primarily within the Company's current distribution
network and that can benefit from the Company's existing product line and
service capabilities.

Increased Sales of Proprietary Products. Private and signature brand items
enable the Company to offer its customers attractive product alternatives to
comparable national brands across a wide range of prices. The Company
historically has sold a significantly lower proportion of proprietary private
and signature brand products than its primary competitors, whose proprietary
brand sales have accounted for 30% to over 60% of their sales volume. Sales of
the Company's proprietary brands accounted for approximately 15% of net sales in
fiscal 1996, compared to approximately 12% in fiscal 1995. Although it intends
to continue to emphasize sales of national brand products, the Company plans to
expand sales of its newly developed private and signature brand product lines
through national and local advertising, representation at national and
Company-sponsored food shows and training of its sales force regarding the
attributes of these products.

Sales of private and signature brand items are supported by the Company's
centralized purchasing operations, which enable the Company to provide
consistent product quality and pricing to its entire customer base. Because the
sale of proprietary brands does not entail payment of the price premiums
associated with

28
<PAGE> 30

national brands and their associated higher overhead costs, the Company believes
sales of its proprietary brands will enhance both its profitability and the
profitability of its customers. The Company also believes that because its
signature brands are available exclusively through the Company, sales of these
products promote increased customer loyalty.

Focus on Specialized Markets. JP Foodservice has directed its product and
service development efforts to satisfy the needs of specialized markets believed
to have strong growth potential. Through its integrated service program called
DirectCare: Meals, Menus and More(R), the Company provides over 700 nursing
homes and hospitals with special nutritional plans, inventory analysis, a
variety of marketing services and in-service training of institutional
personnel. Sales to healthcare institutions under this program amounted to $62
million in fiscal 1996, compared to $30 million in fiscal 1994. In addition, the
Company has responded to the increasing popularity of foodservice specialities
by marketing a variety of Italian-style products under its Roseli(TM) signature
brand, which the Company introduced in fiscal 1994, as well as a full line of
Mexican products under its el Pasado(TM) signature brand and a complete line of
gourmet and foodservice coffees and related products under its Rituals(TM)
signature brand, both of which the Company introduced in fiscal 1996. In the
first half of fiscal 1997, the Company plans to continue development and
expansion of a full line of Oriental-style products under its Beijing Chef (TM)
signature brand and to introduce a full line of seafood products under its
Harbor Banks(TM) signature brand.

Strategic Acquisitions. The Company supplements internal growth with a
program of strategic acquisitions to increase its market presence in its
existing operating areas and to expand its operations into new markets. The
Company expects that the continued presence of many small, privately-owned
distributors within the Company's existing markets will provide it with
opportunities to effect "fold-in" acquisitions of these concerns by integrating
their customer base and sales force into the Company's current operations. The
Company also will consider acquiring larger-sized distributors as a means of
expanding into new geographic markets. The Company believes that it can reduce
the operating expenses and purchasing costs and enhance the sales and profit
margins of an acquired business by providing the acquired business with access
to its centralized purchasing programs, information systems, broad product line
and value-added services. The Company further believes that its decentralized
operating strategy and the flexibility of its centralized, mainframe-based
computer system will facilitate the integration of acquired operations. The
Company's ability to compete for acquisition opportunities with other
foodservice businesses is enhanced by its financial resources, which include
access to the public capital markets.

Pursuant to its acquisition strategy, the Company recently consummated two
"fold-in" acquisitions. In the fourth quarter of fiscal 1995, the Company
acquired Tri River Foods, Inc., a foodservice distribution company specializing
in custom-cut meat products, frozen seafood and other complementary canned, dry
and frozen food products. The acquired company, which conducted operations
primarily within a 50-mile radius of Pittsburgh, had net sales of approximately
$15 million. In the second quarter of fiscal 1996, the Company purchased certain
assets of Rotelle, Inc., a foodservice distribution company operating in
Pennsylvania with annual net sales of approximately $35 million.

In the first quarter of fiscal 1997, the Company acquired Valley Foods, a
broadline distributor with a leading market share of the Las Vegas, Nevada
foodservice market. The Company believes that Las Vegas is one of the country's
fastest growing foodservice markets and that the Valley Acquisition will provide
a basis for the Company to expand its operations into the Western region of the
United States. See "Prospectus Summary -- Recent Acquisitions" and "Unaudited
Pro Forma Condensed Combined Financial Statements."

Also in the first quarter of fiscal 1997, the Company acquired Arrow, a
broadline distributor based in Norwich, Connecticut. The Arrow Acquisition
increases the Company's presence in the New England marketplace and positions
the Company for further expansion into the southern Connecticut, Westchester
County and New York City markets. See "Prospectus Summary -- Recent
Acquisitions" and "Unaudited Pro Forma Condensed Combined Financial Statements."

In the second quarter of fiscal 1997, the Company acquired Squeri, a
broadline distributor serving the Greater Cincinnati, Dayton, Columbus,
Indianapolis, Louisville and Lexington markets. The Squeri Acquisition fills a
gap in the Company's existing distribution network in the Midwestern region of
the United States and is expected to provide cost savings through distribution
efficiencies in its Midwestern distribution network.

29
<PAGE> 31

See "Prospectus Summary -- Recent Acquisitions" and "Unaudited Pro Forma
Condensed Combined Financial Statements."

The Company has adopted a policy pursuant to which it generally does not
announce proposed acquisitions until it enters into definitive agreements with
respect to such acquisitions.

PRODUCTS AND SERVICES

Products

The Company's extensive selection of food and related products enables it
to provide a single source of supply to a diverse base of customers whose
product needs vary significantly. The Company's product line of over 30,000
items encompasses a broad selection of canned and dry food products, fresh
meats, poultry, seafood, frozen foods, fresh produce, dairy and other
refrigerated products and related goods and supplies. Many of the Company's
product offerings feature "center of the plate" or entree selections. The
Company also distributes a wide variety of nonfood products and equipment,
including paper products, disposable napkins, plates, cups and cleaning
supplies. In most locations, the Company also offers coffee and beverage
equipment, supplies and service and, to a limited extent, tableware (such as
china and silverware), glassware and light restaurant equipment and supplies.

The following table sets forth the product categories of the items sold by
the Company and the percentage of the Company's net sales generated by each
product category during the periods indicated.

<TABLE>
<CAPTION>
PERCENTAGE OF NET SALES
FISCAL YEAR ENDED
---------------------------------------------
JULY 2, 1994 JULY 1, 1995 JUNE 29, 1996
------------ ------------ -------------
<S> <C> <C> <C>
Canned and dry products................................... 27% 27% 26%
Meats..................................................... 20 20 20
Other frozen foods........................................ 18 18 18
Poultry................................................... 9 9 10
Seafood................................................... 8 8 8
Dairy products............................................ 7 8 9
Perishable food products.................................. 4 4 3
Paper products............................................ 4 4 4
Equipment and supplies.................................... 2 1 1
Janitorial supplies....................................... 1 1 1
--- --- ---
Total net sales........................................... 100% 100% 100%
========= ========= ==========
</TABLE>

National Brands. In fiscal 1996, the Company supplied more than 26,000
national brand items, which accounted for approximately 85% of the Company's net
sales in that period. National brand products represent a greater proportion of
the Company's product line than the product lines of the Company's principal
competitors. Management believes that national brands are attractive to chain
accounts and other customers seeking consistent product quality throughout their
operations. The Company's national brand strategy has promoted closer
relationships with many national suppliers, who provide important sales and
marketing support to the Company.

Private Brands. The Company offers its customers an expanding line of
products under its JP(TM), JP Power(TM) and Harvest Value(TM) private brands.
The Company currently offers over 1,900 private brand products, including frozen
and canned goods, fruits, vegetables and meats, through its JP Gold(TM) (highest
quality), JP Blue(TM), JP Red(TM) and Harvest Value(TM) private labels and
approximately 70 cleaning products under its JP Power(TM) brand. The multi-tier
quality system has been developed to meet the specific requirements of different
market segments.

Signature Brands. The Company offers its customers an exclusive and
expanding line of signature products which are comparable in quality to national
brand items and priced competitively with such items. The Company markets these
products under the names Roseli(TM) (Italian-style products), Hilltop Hearth(TM)
(bread and bakery products), Cattlemen's Choice(TM) (meats), Patuxent Farms(TM)
(processed meats), el Pasado(TM) (Mexican products), Rituals(TM) (gourmet
coffee) brands, and, beginning in the first half of fiscal

30
<PAGE> 32

1997, Beijing Chef (TM) (Oriental-style products) and Harbor Banks(TM) (seafood
products). The Company currently offers more than 1,100 signature brand items.

Services

To strengthen its customer relationships and increase account penetration,
JP Foodservice offers an array of value-added services that, in their scope and
quality, differentiate it from other foodservice distributors. The Company
offers the following types of services:

- Management Support and Assistance. The Company's highly trained sales
force assists customers in managing their foodservice operations more
efficiently and profitably by providing advice and assistance on product
selection, menu planning and recipes, nutritional information, inventory
analysis and product costing and marketing strategies. The Company also
provides in-service training of customer personnel.

- Specialized Market Services. The Company offers services and programs
tailored to specialized markets. For example, through its integrated
service program, called DirectCare: Meals, Menus and More(R), the Company
provides healthcare service providers with special nutritional plans,
customized software packages (JP directAdvantage(TM)), a variety of
marketing services and in-service training of institutional personnel. In
order to be eligible to participate in this program, healthcare
institutions must maintain a specified minimum volume of purchases from
the Company.

- Customized Technology. The Company offers its customers a proprietary
hand-held computer system, the JP Connection(TM), which automates many
restaurant management functions, including the management and reordering
of product inventory. The system automatically re-orders products
directly through the Company's mainframe computer. The Company also is
upgrading the electronic order entry system utilized by its sales
personnel by equipping them with laptop computers which it believes
enables the sales force to present product and menu ideas, take orders
and prepare presentations more efficiently. Through this upgrade, the
Company will be providing its customers with an enhanced personal
computer-based order entry system.

- Publications. The Company promotes active customer use of its other
services and its products through the distribution of professionally
printed publications, including its biweekly newsletter, JP FoodNews(TM).
The Company's publications highlight selected products, including
proprietary private and signature brand items, present menu suggestions,
provide nutritional information and include recipes using the Company's
products. Customers also may participate, at no cost, in the Company's
recipe program, To Your Taste(R), in which the Company furnishes
participants every two weeks with recipe cards that describe new menu
concepts.

CUSTOMERS

The Company's customer base of over 34,000 accounts encompasses a wide
variety of foodservice establishments. The Company's chain customers include Old
Country Buffett, Perkins Family Restaurants, Subway, Compass Group, Ruby
Tuesday, Pizzeria Uno and other foodservice establishments. The Company also is
a foodservice supplier to the United States Congress, Fenway Park and other
prominent institutions. The following table sets forth the segments of the
Company's customer base by type of institution for fiscal 1996.

<TABLE>
<CAPTION>
PERCENTAGE
TYPE OF CUSTOMER OF NET SALES
------------------------------------------------------------------------- ------------
<S> <C>
Restaurants.............................................................. 70%
Limited menu establishments.............................................. 11
Hotels................................................................... 2
Healthcare institutions.................................................. 5
Schools and colleges..................................................... 3
Other.................................................................... 9
---
100%
=========
</TABLE>

Street Customers. The Company's street customers are independent
restaurants, hotels, schools and other foodservice businesses. Street customers
are serviced directly by commission sales personnel who

31
<PAGE> 33

personally call on customers, place orders, coordinate product delivery and
provide the value-added services offered to these customers. Street accounts
represented approximately 53% of the Company's net sales in fiscal 1996.

Chain Customers. The majority of the Company's chain customers consist of
franchises or corporate-owned units of national or regional family dining and
other restaurant "concepts" and, to a lesser extent, hotels and other regional
institutional operators. Many of the Company's current chain account customers,
primarily restaurants, are experiencing more rapid sales growth than other types
of foodservice businesses. The Company has developed strong working
relationships with its chain accounts, which have enabled these accounts, in
conjunction with the Company, to develop distribution programs tailored to
precise delivery and product specifications. These distribution programs have
created operating and cost efficiencies for both the chain customers and the
Company.

Chain customers generally are serviced by salaried sales and service
representatives who coordinate the procurement and delivery of all products
throughout the system from a central location. Gross profit margins generally
are lower for chain customers than for street customers. However, because there
are typically no commission sales costs related to chain account sales and
because chain customers usually have larger deliveries to individual locations,
sales and delivery costs generally are lower for chain accounts than for street
accounts. Chain accounts represented approximately 47% of the Company's net
sales in fiscal 1996.

No single customer accounted for 10% or more of the Company's net sales in
fiscal 1996. Consistent with industry practice, the Company has no long-term
contract with any customer that may not be canceled by either party at its
option.

SALES AND MARKETING

The Company's principal marketing activities at June 29, 1996 were
conducted by approximately 480 street sales, 50 chain sales and 100 customer
service representatives. As part of its strategy to increase street account
sales, the Company currently plans to continue to increase its commission sales
force, which grew an average of 7% in fiscal 1995 and fiscal 1996. The Company's
sales and service representatives are responsible for soliciting and processing
orders, servicing customers by telephone, reviewing account balances and
assisting with new product information. In addition, the Company's sales
representatives advise customers on menu selection, methods of preparing and
serving food and other operating issues. The Company provides an extensive
in-house training program for its entry-level sales and service representatives,
which includes seminars, on-the-job training and direct one-on-one supervision
by experienced sales personnel.

The Company's commission program is designed to reward account
profitability and promote sales growth. The Company systematically measures the
profitability of each account and product segment and modifies its incentive
program accordingly.

Including the Acquisitions, the Company maintains sales offices at each of
its 12 full-service distribution centers and at three additional locations in
Pennsylvania, Illinois and South Dakota. The Company employs sales and marketing
staff at both the corporate and branch levels to solicit and manage
relationships with multiunit chain accounts.

The Company supplements its market presence with advertising campaigns in
national and regional trade publications, which typically focus on the Company's
services and its ability to service targeted industry segments. The Company
supports this effort with a variety of promotional services and programs,
including its biweekly newspaper, JP FoodNews(R), and its recipe program, To
Your Taste(R).

DISTRIBUTION

JP Foodservice distributes its products out of its 12 full-service
distribution centers located in Massachusetts, Connecticut, Pennsylvania,
Maryland, Minnesota, Indiana, Illinois, Iowa, Nevada and Ohio. The Company
extends this geographic coverage through remote distribution locations
including, among others, facilities in Ohio, Maryland, Michigan, Vermont and New
Jersey. The Company's customers generally are located within 150 miles of one of
the Company's distribution centers, although the Company's distribution network
and reciprocal arrangements with other distributors enable the Company to serve
customers outside of its principal market areas. Services to both street and
chain customers are supported by the same distribution facilities and equipment.

32
<PAGE> 34

The 12 full-service distribution centers have a total of approximately 1.8
million square feet of warehouse space. Each distribution center operates from a
warehouse complex that contains dry, refrigerated and frozen storage areas, as
well as office space for sales, marketing and distribution personnel.

Products are delivered to the Company's distribution centers by
manufacturers, common carriers and the Company's own fleet of trucks. The
Company employs a management information system which, together with its
centralized purchasing operations, enables it to lower its inbound
transportation costs by making optimal use of its own fleet of trucks or by
consolidating deliveries into full truckloads. Orders from multiple suppliers or
to multiple distribution centers are consolidated into single truckloads for
efficient use of available vehicle capacity and return-trip hauls.

Orders typically are entered electronically by the commission sales force
with the appropriate distribution center through a hand-held computer device or
laptop computer. These devices facilitate order entry through the use of
pre-coded price lists which automatically price orders, apply pricing controls
and allow the sales representative to review the gross profit of each order at
the time of sale. Customers also have the option to place orders by telephone to
service representatives at each of the branches. Certain large customers place
orders through a direct connection to the Company's mainframe computer by means
of a computer terminal, personal computer or touchtone telephone, or through the
Company's proprietary restaurant inventory and management system, the JP
Connection(TM).

Under all forms of order placement, the salesperson or customer is notified
immediately about product availability, which facilitates instant product
substitution, if necessary. Products are reserved automatically at the time of
order, thereby ensuring complete fulfillment of orders upon delivery. Customers'
orders are assembled in the warehouse, sorted and shrink-wrapped to ensure order
completeness. The products are staged according to the required delivery
sequence.

Products are delivered door-to-door, typically on the day following
placement of the order. The Company delivers its products through its fleet of
tractor-trailer and straight trucks, each of which is equipped with separate
temperature-controlled compartments. In dispatching trucks, the Company employs
a computerized routing system designed to optimize delivery efficiency and
minimize drive time, wait time and excess mileage. The majority of the Company's
fleet utilizes onboard computer systems that monitor vehicle speeds, fuel
efficiency, idle time and other vital statistical information. The Company
collects and analyzes such data in an effort continually to monitor and improve
transportation efficiency and reduce costs.

In certain geographic markets, the Company utilizes its remote
redistribution facilities to achieve a higher level of customer service.
Products are transported in large tractor-trailers or double trailers to the
redistribution facility, where the loads are then transferred to smaller
equipment for delivery in the normal fashion.

SUPPLIERS

At June 29, 1996, JP Foodservice employed approximately 20 purchasing
agents with expertise in specific product lines to purchase products for the
Company from over 2,000 suppliers located throughout the United States and
overseas. Substantially all types of products distributed by the Company are
available from a variety of suppliers, and the Company is not dependent on any
single source of supply.

The management of all purchasing operations from the Company's corporate
headquarters in Columbia, Maryland results in lower costs through increased
purchasing leverage with suppliers and greater ordering efficiency. To maximize
the benefits of its centralized purchasing function, the Company attempts to
concentrate purchases with selected suppliers. Through this strategy, the
Company is able to buy high-quality products on advantageous terms. The Company
cooperates closely with these suppliers to promote new and existing products.
The suppliers assist in training the Company's sales force and customers
regarding new products, new trends in the industry and new menu ideas, and
collaborate with the Company in advertising and promoting these products both
through printed advertisements and through annual branch-sponsored food shows
and national trade shows.

Through its centralized purchasing department, the Company is able to
monitor the quality of the products offered by various suppliers and ensure
consistency of product quality across its distribution network. The
concentration of purchasing power at the corporate level often provides the
Company's buyers with early access to new product concepts which, if attractive,
can be quickly introduced to the Company's customers.

33
<PAGE> 35

The Company maintains a comprehensive quality control and assurance program
that at June 29, 1996 actively involved over 60 employees in daily quality
control activities. The program is managed by members of the central purchasing
department, including product group managers who each manage specific segments
of the product line and product line managers who purchase products for the nine
branches, and is supported at each branch by the merchandising manager, the
branch buyer and an inventory control specialist. The quality control process
includes the selection of suppliers and the policing of quality standards
through product sampling at both the Company's corporate offices and branch
locations and through visits to growing fields, manufacturing facilities and
storage operations.

The Company requires all of its suppliers and manufacturers to maintain
specified levels of product liability insurance and to name the Company as an
additional insured on the applicable insurance policies.

COMPETITION

The foodservice distribution industry is extremely fragmented, with over
3,000 companies in operation in 1995. In recent years, the foodservice
distribution industry has been characterized by significant consolidation and
the emergence of larger competitors. The Company competes in each of its markets
with at least one other large national distribution company, generally SYSCO
Corp. or Alliant (formerly Kraft) Foodservice, Inc., as well as with numerous
regional and local distributors.

The Company believes that, although price is an important consideration,
distributors in the foodservice industry compete principally on the basis of
service, product quality and customer relations. The Company attributes its
ability to compete effectively against smaller regional and local distributors
in part to its wider product selection, the cost advantages resulting from its
size and centralized purchasing operations and its ability to offer broad and
consistent market coverage. The Company competes effectively against other
broadline distributors primarily by providing its customers with accurate and
timely fulfillment of orders and an array of value-added services.

The Company typically competes against other foodservice distribution
companies for potential acquisitions. The Company believes that its financial
resources and its ability to offer owners of acquisition targets an interest in
the combined business through ownership of JP Foodservice Common Stock provide
the Company with an advantage over many of its competitors.

REGULATION

The Company's operations are subject to regulation by state and local
health departments, the U.S. Department of Agriculture and the Food and Drug
Administration, which generally impose standards for product quality and
sanitation. The Company's facilities generally are inspected at least annually
by state or federal authorities.

The Company's relationship with its fresh food suppliers with respect to
the grading and commercial acceptance of produce shipments is governed by the
Federal Produce and Agricultural Commodities Act, which specifies standards for
sale, shipment, inspection and rejection of agricultural products. The Company
also is subject to regulation by state authorities for the accuracy of its
weighing and measuring devices.

Federal, state and local provisions which have been enacted or adopted
regulating the discharge of materials into the environment, or otherwise
relating to the protection of the environment, generally are not directly
applicable to the Company. Certain of the Company's distribution facilities have
underground and above-ground storage tanks for diesel fuel and other petroleum
products, which are subject to laws regulating such storage tanks. Such laws
have not had a material adverse effect on the capital expenditures, earnings or
competitive position of the Company.

Certain hazardous substances have been released on the site of the
Company's Boston branch. The Massachusetts Department of Environmental
Protection has advised the Company that such agency has entered into an
administrative consent decree with three parties responsible under Massachusetts
law to clean up hazardous substances in areas contiguous to the site. The agency
also advised the Company in 1990 that, as the current owner of the site, the
Company also may be deemed to be a responsible party under Massachusetts law for
hazardous substances on the site. The Company has not been the subject of any
action or proceeding seeking to require it to remove hazardous substances from
the site or to make payment in respect of the cleanup of the site or related
costs. In June 1996, the Massachusetts Department of Environmental Protection
advised the Company that, based on the information currently available to it,
the agency is not requiring the

34
<PAGE> 36

Company to remove hazardous substances from the site. The Company has been
indemnified against any losses it may incur in connection with hazardous
substances on the site, and does not believe resolution of this matter will have
a material adverse effect on its financial condition or operating results.

INTELLECTUAL PROPERTY

JP Foodservice has proprietary rights to a number of trademarks used in its
business, including trademarks used in connection with the marketing of its
private and signature brand products, its proprietary restaurant inventory and
management system and a variety of customized service programs. A number of
these trademarks are registered with the U.S. Patent and Trademark Office, each
for an initial period of 20 years, which is renewable for as long as the Company
continues to use the trademarks. The Company considers its trademarks to be of
material importance to its business plans.

FACILITIES AND EQUIPMENT

JP Foodservice occupies its corporate headquarters in Columbia, Maryland,
which consists of 30,800 square feet of office space, pursuant to a lease which
expires on December 31, 2003.

The Company owns all of its 12 full-service distribution centers, which
contain a total of 1.8 million square feet of warehouse space. The centers
contain dry, refrigerated and frozen storage areas and office space for the
sales and administrative operations of the branch. The following chart provides
information on the approximate size of each of the Company's 12 full-service
distribution centers.

<TABLE>
<CAPTION>
AREA IN
LOCATION SQUARE FEET
------------------------------------------------------------------------- -----------
<S> <C>
Las Vegas, Nevada........................................................ 210,000
Norwich, Connecticut..................................................... 200,000
Baltimore, Maryland...................................................... 187,000
Altoona, Pennsylvania.................................................... 164,000
Minneapolis, Minnesota................................................... 160,000
Boston, Massachusetts.................................................... 149,000
Streator, Illinois....................................................... 146,000
Hartford, Connecticut.................................................... 141,000
Des Moines, Iowa......................................................... 131,000
Fort Wayne, Indiana...................................................... 111,000
Allentown, Pennsylvania.................................................. 110,000
Cincinnati, Ohio......................................................... 87,000
-----------
Total............................................................... 1,796,000
=========
</TABLE>

Equipment and machinery owned by the Company and used in its operations
consist principally of electronic data processing equipment and product handling
equipment. The Company also operates a fleet of vehicles, which consisted of
over 570 tractor-trailer combinations and straight trucks at the end of fiscal
1996, for long hauls and local deliveries. At June 29, 1996, the Company owned
approximately 5% of these vehicles and leased the remainder. See Note 11 to the
Company's Consolidated Financial Statements.

The Company outsources its data center operations pursuant to a five-year
contract which expires on December 31, 1997 and which may be extended by the
Company. As the Company's business needs warrant, it can either increase or
decrease the amount of computer capacity it purchases upon short notice to the
vendor. Management believes that this arrangement provides the Company with more
reliable and flexible service at a lower cost than the Company could achieve by
operating its own data center.

The Company regularly evaluates the capacity of its various facilities and
equipment and makes capital investments to expand capacity where necessary. In
fiscal 1995 and fiscal 1996, the Company spent a total of $25.3 million on
capital expenditures, primarily for new trucks and trailers and expansion of its
distribution centers in Streator, Illinois and Boston. The Company undertakes
expansion or replacement of its facilities as and when needed to accommodate the
Company's growth. The Company is currently undertaking a 45,000 square foot
expansion of its Allentown, Pennsylvania distribution center, with completion
expected in

35
<PAGE> 37

November 1996. The Company is also in the initial planning stage of a 20,000
square foot expansion of the Fort Wayne facility. Facility expansion costs are
expected to total approximately $7 million in fiscal 1997.

EMPLOYEES

JP Foodservice has approximately 3,500 full-time employees, of whom
approximately 120 were employed in corporate management and administration and
approximately 2,100 of whom were hourly employees. Approximately 1,100 of the
Company's employees were covered by collective bargaining contracts with 12
different local unions which are associated with the International Brotherhood
of Teamsters. Six collective bargaining contracts, which cover approximately 350
employees, will expire during fiscal 1997. Other than a temporary action
involving Squeri in the spring of 1993, the Company has not experienced any
labor disputes or work stoppages. The Company believes that its relationships
with its employees are satisfactory.

LITIGATION

From time to time, the Company is involved in litigation and proceedings
arising out of the ordinary course of its business. There are no pending
material legal proceedings to which the Company is a party or to which the
property of the Company is subject.

36
<PAGE> 38

MANAGEMENT

The following table sets forth certain information regarding the executive
officers and directors of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------- --- ---------------------------------------------------------
<S> <C> <C>
James L. Miller........ 47 Chairman of the Board of Directors, President and Chief
Executive Officer
Lewis Hay, III......... 41 Director, Senior Vice President and Chief Financial
Officer
David M. Abramson...... 43 Director, Senior Vice President and General Counsel
Mark P. Kaiser......... 39 Director, Senior Vice President-Sales, Marketing and
Procurement
George T. Megas........ 43 Vice President-Finance, Assistant Secretary and Assistant
Treasurer
Michael J. Drabb....... 62 Director
Eric E. Glass.......... 56 Director
Paul I. Latta.......... 53 Director
George A. Midwood...... 62 Director
Dean R. Silverman...... 45 Director
</TABLE>

James L. Miller has served as Chairman of the Board of Directors and as
President and Chief Executive Officer of the Company since July 1989. From 1986
to 1989, Mr. Miller served as Executive Vice President and Chief Operating
Officer of the Northern Division of PYA/Monarch, Inc. ("PYA/Monarch"), a
subsidiary of Sara Lee. From 1983 to 1985, Mr. Miller served as Vice President
and General Manager of PYA/Monarch's Northeast division. Before joining
PYA/Monarch, Mr. Miller was employed by SYSCO Corp., from 1972 to 1983, where he
held the positions of Vice President of Operations, Vice President of Sales,
Vice President and General Manager.

Lewis Hay, III joined the Company in 1991 as Senior Vice President and
Chief Financial Officer, and has served as a director since that date. Before
joining the Company, Mr. Hay was a Vice President and partner of Mercer
Management Consulting (formerly Strategic Planning Associates, Inc.), a
management consulting firm, where he led the strategy consulting practice in the
firm's Washington, D.C. office. Mr. Hay joined the firm in 1982 and, beginning
in 1986, participated in a number of consulting projects for PYA/Monarch,
including the transaction resulting in the formation of the Company in 1989.

David M. Abramson has served as Senior Vice President and General Counsel
of the Company since July 1, 1996 and as a director of the Company since August
1994. Mr. Abramson was the President and Managing Principal of the law firm of
Levan, Schimel, Belman & Abramson, P.A. from 1992 to 1996. Previously, Mr.
Abramson was a Vice President and Principal of that firm. Mr. Abramson serves as
a director of Monocacy Bancshares, Inc., which is the parent corporation of
Taneytown Bank & Trust Company in Taneytown, Maryland.

Mark P. Kaiser has served as the Senior Vice President-Sales, Marketing and
Procurement of the Company since 1993 and as a director of the Company since
September 1996. From 1989 to 1991, Mr. Kaiser served as the Company's Vice
President-Sales and Marketing and as Executive Vice President-Sales, Marketing
and Procurement of the Company from 1991 to 1993. Mr. Kaiser previously held a
number of positions at PYA/Monarch, including Vice President-Sales from 1985 to
1989.

George T. Megas joined the Company in 1991 as Vice President-Finance,
Assistant Secretary and Assistant Treasurer and is responsible for the
accounting, treasury and finance functions. Mr. Megas, a Certified Public
Accountant, previously served as the Corporate Controller for Strategic Planning
Associates, Inc., a management consulting firm, from 1979 to 1990, when it was
acquired by Mercer Management Consulting, and served as a Controller for certain
regions of Mercer Management Consulting until 1991.

Michael J. Drabb has served as a director of the Company since 1994. Mr.
Drabb has served as Executive Vice President of O'Brien Asset Management, Inc.,
an institutional asset management firm, since August 1993. From April 1992 to
July 1993, Mr. Drabb was retired. Mr. Drabb served as an Executive Vice
President and a member of the cabinet of The Mutual Life Insurance Company of
New York ("MONY") from 1989 to 1992 and was employed by MONY from 1961 until his
retirement in 1992. Mr. Drabb also

37
<PAGE> 39

serves as a director of the New York Life Fund, Inc., the New York Life MFA
Series Fund, Inc., the MONY Series Fund, Inc. and United States Leather, Inc.

Eric E. Glass has served as a director of the Company since February 1996.
Mr. Glass has served as the Chairman of the Board for The Taney Corporation, a
manufacturer of wooden stairway components and stairways, since 1995.
Previously, from 1962 to 1995, Mr. Glass served as President of The Taney
Corporation. Mr. Glass also serves as a director of the Gettysburg Hospital in
Gettysburg, Pennsylvania and Vice Chairman of the Board and Chairman of the
Executive Committee of Monocacy Bancshares, Inc., which is the parent
corporation of Taneytown Bank & Trust Company in Taneytown, Maryland.

Paul I. Latta has served as a director of the Company since September 1996.
Mr. Latta has served most recently as Senior Vice President of The Rouse
Company, where he is responsible for all retail properties. Mr. Latta previously
held a number of positions with The Rouse Company, where he has worked since
1968.

George A. Midwood has served as a director of the Company since 1990. Mr.
Midwood has been a consultant with Phillips International L.P., of Atlanta, a
Georgia merchant banking firm, since 1990. Mr. Midwood served as Vice President
and Treasurer of R.J.R. Nabisco from 1987 to 1989 and as Treasurer of American
Cyanamid Company from 1979 to 1987.

Dean R. Silverman has served as a director of the Company since September
1996. Mr. Silverman has served as the President of Dean & Company, a strategic
management consulting company, since 1993. Prior to 1993, Mr. Silverman was
Executive Vice President and partner of Mercer Management Consulting.

38
<PAGE> 40

SELLING STOCKHOLDERS

The Selling Stockholders, which are the Sara Lee Foundation, Sara Lee
Foodservice Holdings, Inc. and the former stockholders of Valley Foods and the
transferees of such stockholders, are offering shares of Common Stock pursuant
to the exercise of registration rights. The Selling Stockholders have granted
the Underwriters an option, exercisable within 30 days from the date of this
Prospectus, to purchase up to an aggregate of 729,028 shares of Common Stock to
cover over-allotments, if any. The following table sets forth certain
information, as of October 1, 1996 and as adjusted to reflect the sale of Common
Stock offered hereby, regarding the ownership of the Common Stock by the Selling
Stockholders.

<TABLE>
<CAPTION>
OWNERSHIP OWNERSHIP
PRIOR TO OFFERING NUMBER AFTER OFFERING
-------------------- OF SHARES --------------------
NAME OF NUMBER OFFERED NUMBER
SELLING STOCKHOLDER OF SHARES PERCENT HEREBY OF SHARES PERCENT
- --------------------------------------------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
Sara Lee Foodservice Holdings, Inc.(1)(2).... 5,138,210 23.1% 4,557,449 580,761 2.6%
Sara Lee Foundation(2)....................... 1,000,000 4.5 886,972 113,028 *
Mark and Linda Zobrist Charitable
Remainder Annuity Trust.................... 70,000 0.3 61,518 8,482 *
Duane H. Zobrist............................. 317,749 1.4 32,344 285,405 1.3
Richard D. Zobrist........................... 317,749 1.4 32,344 285,405 1.3
Church of Jesus Christ of Latter Day
Saints..................................... 35,000 0.2 30,759 4,241 *
Lloyd K. Benson.............................. 317,749 1.4 27,949 289,800 1.3
Gerry R. Zobrist............................. 317,749 1.4 23,555 294,194 1.3
E. Mark Zobrist.............................. 242,749 1.1 23,555 219,194 1.0
R. Phillip Zobrist........................... 317,749 1.4 23,555 294,194 1.3
</TABLE>

- ---------------
(*) Represents holdings of less than 1%.

(1) Shares are held of record by Sara Lee Foodservice Holdings, Inc., a
wholly-owned subsidiary of Sara Lee Corporation, which may be deemed to be
the beneficial owner of such shares.

(2) If the over-allotment option is exercised in full with respect to shares
owned by the Sara Lee Selling Stockholders, the Sara Lee Selling
Stockholders will not own any shares of Common Stock.

39
<PAGE> 41

SHARES ELIGIBLE FOR FUTURE SALE

As of the date of this Prospectus, there are 22,210,088 outstanding shares
of Common Stock. All of the 5,700,000 shares offered in the Offering will be
freely transferable without restriction or further registration under the
Securities Act, except that any shares held by an "affiliate" of the Company (as
that term is defined under Rule 144 of the Securities Act) will be subject to
the resale limitations of Rule 144. Of the Company's outstanding shares other
than the shares offered hereby, 4,080,421 are "restricted securities" within the
meaning of Rule 144. Such restricted securities may not be sold except in
compliance with the registration requirements of the Securities Act or pursuant
to an exemption from registration, such as the exemption provided by Rule 144.

In general, Rule 144 provides that any person (or persons whose shares are
aggregated), including an affiliate, who has beneficially owned shares for at
least a two-year period (as computed under Rule 144) is entitled to sell within
any three-month period the number of shares that does not exceed the greater of
(i) 1% of the then outstanding shares of the Common Stock (approximately 222,100
shares) and (ii) the average weekly reported trading volume of the then
outstanding shares of Common Stock during the four calendar weeks immediately
preceding the date on which the notice of sale is filed with the Securities and
Exchange Commission. Sales under Rule 144 also are subject to certain provisions
relating to the manner and notice of sale and the availability of current public
information about the Company. A person (or persons whose shares are aggregated)
who is not deemed an affiliate of the Company at any time during the 90 days
immediately preceding a sale, and who has beneficially owned shares for at least
a three-year period (as computed under Rule 144), would be entitled to sell such
shares under Rule 144(k) without regard to the volume limitation and other
conditions described above. Rule 144A under the Securities Act permits the
immediate sale by the current holders of restricted securities of all or a
portion of those securities to certain qualified institutional buyers, as
defined in Rule 144A, subject to certain conditions. The foregoing summary of
Rule 144 and Rule 144A is not intended to be a complete description of such
rules.

The Company, certain of its executive officers and directors and the
Selling Stockholders (with respect to unsold shares of Common Stock) have agreed
that, for a period of 90 days after the date of this Prospectus, they will not,
without the prior consent of Smith Barney Inc., offer, sell, contract to sell or
otherwise dispose of any shares of Common Stock or any securities convertible
into, or exercisable or exchangeable for, Common Stock (subject, in the case of
the Company, to an exception for the grant of options and issuance of shares
pursuant to the Company's stock plans). With the consent of Smith Barney Inc.,
such shares may be sold before the expiration of the lock-up period without
prior notice to the other stockholders of the Company or to any public market in
which the Common Stock trades. Upon the expiration of the lock-up period,
2,926,569 shares will be eligible for sale in the public market pursuant to Rule
144.

40
<PAGE> 42

No prediction can be made as to the effect, if any, that future sales of
shares of Common Stock or the availability of shares for future sale will have
on the market price of the Common Stock prevailing from time to time. Sales of
substantial amounts of Common Stock, or the perception that such sales could
occur, could adversely affect the prevailing market prices of the Common Stock
and the Company's ability to raise capital in the future through the sale of
additional securities.

41
<PAGE> 43

UNDERWRITING

Under the terms and subject to the conditions stated in the Underwriting
Agreement dated the date hereof, each of the underwriters named below (the
"Underwriters"), for whom Smith Barney Inc., Goldman, Sachs & Co., The
Robinson-Humphrey Company, Inc. and Rodman & Renshaw, Inc. are acting as the
representatives (the "Representatives"), has severally agreed to purchase, and
the Selling Stockholders have agreed to sell to each Underwriter, the number of
shares of Common Stock set forth opposite the name of such Underwriter below:
<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
- ------------------------------------------ ---------
<S> <C>
Smith Barney Inc..........................
Goldman, Sachs & Co. .....................
The Robinson-Humphrey Company, Inc. ......
Rodman & Renshaw, Inc. ...................

<CAPTION>
NUMBER
UNDERWRITER OF SHARES
- ------------------------------------------ ---------
<S> <C>
---------
5,700,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares are subject to
approval of certain legal matters by counsel and to certain other conditions.
The Underwriters are obligated to take and pay for all shares of Common Stock
offered hereby (other than those covered by the over-allotment option described
below) if any such shares are taken.

The Underwriters initially propose to offer part of the shares directly to
the public at the public offering price set forth on the cover page of this
Prospectus and part of the shares to certain dealers at a price which represents
a concession not in excess of $ per share under the public offering price.
The Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per share to the other Underwriters or to certain other dealers.
After the Offering, the public offering price and such concessions may be
changed by the Underwriters. The Representatives of the Underwriters have
advised the Selling Stockholders that the Underwriters do not intend to confirm
any shares to any accounts over which they exercise discretionary authority.

The Selling Stockholders have granted to the Underwriters an option,
exercisable for 30 days from the date of this Prospectus, to purchase up to
729,028 additional shares of Common Stock at the price to public set forth on
the cover page of this Prospectus minus the underwriting discounts and
commissions. The Underwriters may exercise such option solely for the purpose of
covering over-allotments, if any, in connection with the offering of the shares
offered hereby. To the extent such option is exercised, each Underwriter will be
obligated, subject to certain conditions, to purchase approximately the same
percentage of such additional shares as the number of shares set forth opposite
each Underwriter's name in the preceding Underwriters' table bears to the total
number of shares.

The Company, certain of its officers and directors and the Selling
Stockholders (with respect to unsold shares of Common Stock) have agreed that,
for a period of 90 days after the date of this Prospectus, they will not,
without the prior written consent of Smith Barney Inc., offer, sell, contract to
sell or otherwise dispose of any shares of Common Stock or any securities
convertible into, or exercisable or exchangeable for, Common Stock (subject, in
the case of the Company, to an exception for the grant of options and issuance
of shares pursuant to the Company's stock plans) in the public market. With the
consent of Smith Barney Inc., such shares may be sold before the expiration of
the lock-up period without prior notice to the other stockholders of the Company
or to any public market in which the Common Stock trades.

In connection with the Offering, the Underwriters and certain selling group
members may engage in transactions (including passive market making) for their
own accounts or the accounts of others in the Common Stock on the Nasdaq
National Market immediately prior to the commencement of the sale of the

42
<PAGE> 44

shares in the Offering, in accordance with Rules 10b-6A, 10b-6 and 10b-7 under
the Exchange Act. Such transactions may stabilize the market price of the Common
Stock at a level above that which might otherwise prevail and, if commenced, may
be discontinued at any time. Rule 10b-6A permits, upon satisfaction of certain
conditions, persons participating in a distribution that are Nasdaq market
makers in the security being distributed to engage in limited market making
"passive market making" transactions during the period when Rule 10b-6 would
otherwise prohibit such activity. Distribution participants may not effect
transactions in, or display bids for, the Common Stock at a price that exceeds
the highest bid for the Common Stock displayed on the Nasdaq National Market by
a market maker that is not participating in the distribution of the Common
Stock, may not have net daily purchases of the Common Stock that exceed 30% of
average daily trading volume for the two full consecutive calendar months
immediately preceding the filing date of the registration statement of which
this Prospectus is a part, and must identify their bids as bids made by a
passive market maker.

The Company, the Selling Stockholders and the Underwriters have agreed to
indemnify each other against certain liabilities, including liabilities under
the Securities Act.

The Representatives have provided and continue to provide the Company with
additional investment banking services.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Shaw, Pittman, Potts & Trowbridge, Washington, D.C., a partnership
including professional corporations. Certain legal matters will be passed upon
for the Underwriters by Wachtell, Lipton, Rosen & Katz. Wachtell, Lipton, Rosen
& Katz has provided and continues to perform services for the Company.

EXPERTS

The consolidated financial statements of the Company as of July 1, 1995 and
June 29, 1996 and for each of the three fiscal years in the period ended June
29, 1996 included in this Prospectus have been so included in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.

The combined financial statements of Valley Industries, Inc. and
Subsidiaries and Z Leasing Company (A General Partnership) as of January 31,
1994, 1995 and 1996 and for each of the years in the three-year period ended
January 31, 1996, appearing in the Company's Current Report on Form 8-K filed
for a reportable event dated July 1, 1996, have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, and upon the
authority of such firm as experts in accounting and auditing.

The combined financial statements of Arrow Paper and Supply Co., Inc. and
Affiliate as of December 29, 1995, appearing in the Company's Current Report on
Form 8-K filed for a reportable event dated July 17, 1996, have been
incorporated by reference herein and in the registration statement in reliance
upon the report of Blum Shapiro and Company, P.C., independent public
accountants, and upon the authority of such firm as experts in accounting and
auditing.

43
<PAGE> 45

AVAILABLE INFORMATION

This Prospectus, which constitutes a part of a Registration Statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act, omits certain of the
information set forth in the Registration Statement in accordance with the rules
and regulations of the Commission. Reference is hereby made to the Registration
Statement and to the exhibits thereto for further information with respect to
the Company and the securities offered hereby. Copies of the Registration
Statement and the exhibits thereto are on file at the offices of the Commission
and may be obtained upon payment of the prescribed fee or may be examined
without charge at the public reference facilities of the Commission described
below. The Commission also maintains a Web site (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding registrants such as the Company which file electronically with the
Commission.

The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information filed by the Company with the Commission may be inspected and copied
at the public reference facility maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and the
following regional offices of the Commission: New York Regional Office, Seven
World Trade Center, 13th Floor, New York, New York 10048; and Chicago Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material also may be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.

The Company furnishes its stockholders with annual reports containing
audited financial statements and quarterly reports for each of the first three
quarters of each fiscal year containing unaudited interim financial information.

44
<PAGE> 46

JP FOODSERVICE, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE(S)
--------
<S> <C>
Report of Independent Accountants................................................... F-2
Consolidated Balance Sheets as of July 1, 1995 and June 29, 1996.................... F-3
Consolidated Statements of Operations of the Company for the fiscal years ended
July 2, 1994, July 1, 1995 and June 29, 1996...................................... F-4
Consolidated Statements of Stockholders' Equity (Deficit) for the fiscal years ended
July 2, 1994, July 1, 1995 and June 29, 1996...................................... F-5
Consolidated Statements of Cash Flows for the fiscal years ended July 2, 1994, July
1, 1995 and June 29, 1996......................................................... F-6
Notes to Consolidated Financial Statements.......................................... F-7
</TABLE>

F-1
<PAGE> 47

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of JP Foodservice, Inc.:

In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) and (2) on page 23 present fairly, in all material
respects, the financial position of JP Foodservice, Inc. and its subsidiaries at
July 1, 1995 and June 29, 1996, and the results of their operations and their
cash flows for each of the fiscal years ended July 2, 1994, July 1, 1995 and
June 29, 1996, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the company's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

/s/ Price Water House LLP
PRICE WATERHOUSE LLP

Baltimore, Maryland
August 2, 1996, except as to Note 16,
which is as of September 10, 1996

F-2
<PAGE> 48

JP FOODSERVICE, INC.

CONSOLIDATED BALANCE SHEETS
($ IN THOUSANDS)

<TABLE>
<CAPTION>
JULY 1, 1995 JUNE 29, 1996
------------ -------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents....................................... $ 15,418 $ 11,613
Receivables..................................................... 123,491 134,961
Inventories..................................................... 67,629 72,758
Current deferred tax asset...................................... 434 670
Other current assets............................................ 8,319 8,557
---------- -----------
Total current assets....................................... 215,291 228,559
Property and equipment............................................... 81,153 90,173
Goodwill and other noncurrent assets................................. 76,594 82,281
---------- -----------
Total assets............................................... $373,038 $ 401,013
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current obligations under capital leases........................ $ 4,092 $ 4,690
Accounts payable................................................ 96,619 96,550
Accrued expenses................................................ 10,857 12,635
---------- -----------
Total current liabilities.................................. 111,568 113,875
---------- -----------
Noncurrent liabilities
Senior debt..................................................... 130,000 135,378
Subordinated debt with related parties.......................... 4,000 4,067
Obligations under capital leases................................ 12,557 16,675
Noncurrent deferred tax liability............................... 11,542 11,744
---------- -----------
158,099 167,864
---------- -----------
Total liabilities.......................................... 269,667 281,739
---------- -----------
Commitments and contingent liabilities (Notes 10, 11 and 15)
Stockholders' equity
Preferred stock, 5,000,000 shares authorized, none issued
Common stock
Voting, $.01 par value, 45,000,000 shares authorized,
15,920,434 and 16,025,929 issued and outstanding......... 159 160
Paid-in-capital................................................. 187,618 189,463
Accumulated deficit............................................. (39,463) (25,406)
Distribution in excess of net book value of continuing
stockholder's interest........................................ (44,943) (44,943)
---------- -----------
Total stockholders' equity................................. 103,371 119,274
---------- -----------
Total liabilities and stockholders' equity........................... $373,038 $ 401,013
========= ==========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-3
<PAGE> 49

JP FOODSERVICE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
($ IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
---------------------------------------------
JULY 2, 1994 JULY 1, 1995 JUNE 29, 1996
------------ ------------ -------------
<S> <C> <C> <C>
Net sales................................................ $ 1,029,000 $ 1,108,253 $ 1,242,676
Cost of sales............................................ 857,117 921,902 1,028,987
------------ ------------ ------------
Gross profit............................................. 171,883 186,351 213,689
Operating expenses....................................... 140,081 150,428 172,478
Amortization of intangible assets........................ 2,265 2,263 2,338
Stock compensation charge................................ 709
------------ ------------ ------------
Income from operations................................... 29,537 32,951 38,873
------------ ------------ ------------
Interest expense
Borrowings.......................................... 14,731 13,901 13,012
Borrowings-related parties.......................... 14,851 5,879 68
Amortization of loan acquisition costs.............. 1,129 639 259
------------ ------------ ------------
30,711 20,419 13,339
Nonrecurring charges..................................... 1,517
------------ ------------ ------------
Other costs and expenses................................. 30,711 20,419 14,856
------------ ------------ ------------
Income (loss) before income taxes and extraordinary
charge................................................. (1,174) 12,532 24,017
Provision for income taxes............................... (641) (5,962) (9,960)
------------ ------------ ------------
Income (loss) before extraordinary charge................ (1,815) 6,570 14,057
Extraordinary charge on early extinguishment of debt (net
of $3,059 of taxes).................................... (4,590)
------------ ------------ ------------
Net income (loss)........................................ (1,815) 1,980 14,057
Preference dividends..................................... (504) (40)
------------ ------------ ------------
Net income (loss) applicable to common stockholders...... $ (2,319) $ 1,940 $ 14,057
============ ============ ============
Net income (loss) per common share
Before extraordinary charge......................... $ (0.59) $ 0.59 $ 0.88
Extraordinary charge................................ (0.42)
------------ ------------ ------------
Net income (loss) per common share....................... $ (0.59) $ 0.17 $ 0.88
============ ============ ============
Weighted average common shares outstanding
(giving retroactive effect to a 3.936-for-one stock
split effective as of October 20, 1994)................ 3,932,748 11,122,343 15,964,626
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE> 50

JP FOODSERVICE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
JULY 3, 1993 THROUGH JUNE 29, 1996
($ IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCK
--------------------------------------------------
PREFERRED CLASS A CLASS C CLASS B CLASS E PAID-IN
STOCK VOTING VOTING VOTING NONVOTING NONVOTING CAPITAL
--------- ------ ------- ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance July 3, 1993........................... $ 8,465 $12 $ 27 $ 10,005
Net loss.......................................
Exchange agreement............................. (8,582) (4) $ 8 (27) $ 16 46,898
Net (purchases) of common stock for cash.......
Preference dividends
Preferred stock............................ 117
Yield support..............................
-------- ----- ------ ----- ------- ------- ---------
Balance July 2, 1994........................... 8 8 16 56,903
-------- ----- ------ ----- ------- ------- ---------
Net income.....................................
Preference dividends
Preferred stock............................ 40
Initial public offering........................ (40) $110 (8) (8) (16) 81,094
Debt conversion................................ 47 47,221
Stock issued in connection with business
acquisition.................................. 2 2,098
Employee stock purchase........................ 302
-------- ----- ------ ----- ------- ------- ---------
Balance July 1, 1995........................... 159 187,618
-------- ----- ------ ----- ------- ------- ---------
Net income.....................................
Stock options exercised........................ 247
Company 401(k) contribution.................... 1 1,260
Employee stock purchases....................... 338
-------- ----- ------ ----- ------- ------- ---------
Balance June 29, 1996.......................... $ $160 $ $ $ $ $ 189,463
======== ===== ====== ===== ======= ======= =========

<CAPTION>
DISTRIBUTION IN
EXCESS OF
NET BOOK
ACCUMULATED TREASURY VALUE OF CONTINUING
DEFICIT STOCK STOCKHOLDER'S INTEREST TOTAL
----------- -------- ---------------------- --------
<S> <C> <C> <C> <C>
Balance July 3, 1993........................... $ (39,084) $ (470) $(44,943) $ (65,988)
Net loss....................................... (1,815) (1,815)
Exchange agreement............................. 527 38,836
Net (purchases) of common stock for cash....... (57) (57)
Preference dividends
Preferred stock............................ (199) (82)
Yield support.............................. (305) (305)
---------- ------- -------- --------
Balance July 2, 1994........................... (41,403) (44,943) (29,411)
---------- ------- -------- --------
Net income..................................... 1,980 1,980
Preference dividends
Preferred stock............................ (40)
Initial public offering........................ 81,132
Debt conversion................................ 47,268
Stock issued in connection with business
acquisition.................................. 2,100
Employee stock purchase........................ 302
---------- ------- -------- --------
Balance July 1, 1995........................... (39,463) (44,943) 103,371
---------- ------- -------- --------
Net income..................................... 14,057 14,057
Stock options exercised........................ 247
Company 401(k) contribution.................... 1,261
Employee stock purchases....................... 338
---------- ------- -------- --------
Balance June 29, 1996.......................... $ (25,406) $ $(44,943) $ 119,274
========== ======= ======== ========

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE> 51

JP FOODSERVICE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
($ IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
---------------------------------------------
JULY 2, 1994 JULY 1, 1995 JUNE 29, 1996
------------ ------------ -------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss).................................... $ (1,815) $ 1,980 $ 14,057
Adjustments to reconcile net income (loss) to net
cash provided by operating activities
Depreciation of property and equipment.......... 7,780 8,345 8,871
Amortization of intangible assets............... 3,394 2,902 2,599
Preferred stock liquidation expense............. 182
Write-off of loan acquisition costs............. 3,065
Stock compensation.............................. 709
Gain on disposal of property and equipment...... (1,102) (248) (189)
Increase (decrease) in deferred taxes payable... 4,224 (683) 202
Yield support interest payable in senior
subordinated notes............................ 406
PIK note interest payable in additional notes... 9,516 1,284
Changes in assets and liabilities
(Increase) decrease in receivables, net......... (9,401) (20,825) (11,470)
(Increase) decrease in inventories......... 8,442 (1,560) (5,129)
(Increase) decrease in other current
assets................................... (1,723) (1,131) (238)
(Increase) decrease in current portion of
deferred taxes........................... (3,978) 2,657 (236)
Increase (decrease) in accounts payable.... 23,619 14,481 (69)
Increase (decrease) in accrued expenses.... 229 (471) 1,778
Increase in PYA/Monarch accrued interest,
net...................................... 1,005 602 67
---------- ---------- -----------
Net cash provided by operating activities................. 40,596 11,289 10,243
---------- ---------- -----------
Cash flows from investing activities
Additions to property and equipment.................. (1,895) (3,610) (8,788)
Cost of business acquisition, net of cash acquired... (434) (2,773)
Proceeds from sales of property and equipment........ 1,235 248 338
---------- ---------- -----------
Net cash used in investing activities..................... (660) (3,796) (11,223)
---------- ---------- -----------
Cash flows from financing activities
Net proceeds from initial public offering............ 79,927
Long-term debt (repayments) borrowings............... (74,848) 5,378
Payment of recapitalization costs.................... (1,430) (1,432)
Payment of loan acquisition costs.................... (1,690) (13)
Reduction of senior debt............................. (37,900)
Proceeds from issuance of subordinated debt.......... 7,500
Redemption of preferred stock........................ (643)
Proceeds from employee benefit plan stock
purchases.......................................... 302 1,846
Principal payments under capital lease obligations... (3,926) (4,989) (4,536)
Issuance of note receivable to Valley Group.......... (5,500)
Purchases of treasury stock.......................... (57)
---------- ---------- -----------
Net cash used in financing activities..................... (35,813) (3,373) (2,825)
---------- ---------- -----------
Net increase (decrease) in cash and cash equivalents...... 4,123 4,120 (3,805)
Cash and cash equivalents
Beginning of period.................................. 7,175 11,298 15,418
---------- ---------- -----------
End of period........................................ $ 11,298 $ 15,418 $ 11,613
========== ========= ==========
Supplemental disclosure of cash paid during the year for:
Interest............................................. $ 18,332 $ 16,546 $ 12,035
========== ========= ==========
Income taxes......................................... $ 313 $ 730 $ 8,988
========== ========= ==========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
<PAGE> 52

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 1 -- BUSINESS

JP Foodservice, Inc. ("JPF") and its consolidated subsidiaries (the
"Company") were formed on July 3, 1989, following a management-led leveraged
acquisition of certain operations of PYA/Monarch, Inc. ("PYA/Monarch"), a
wholly-owned subsidiary of Sara Lee Corporation ("Sara Lee"). The Company
operates as a broadline distributor of fresh, frozen and packaged foods, paper
products, equipment and ancillary products to foodservice businesses, with
distribution centers in the Mid-Atlantic, Midwest and Northeast United States.
The Company's operations are considered to be in one predominant business
segment. The Company's principal customers are restaurants, hotels, healthcare
facilities, cafeterias and schools encompassing both independent and multi-unit
businesses. Sales to the Company's single largest customer constituted
approximately 7.0%, 8.1% and 8.4% of net sales in fiscal 1994, 1995 and 1996
respectively.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Principles of Consolidation

The consolidated financial statements include the accounts of JPF and its
wholly-owned subsidiaries. Significant intercompany transactions have been
eliminated in consolidation.

B. Cash Equivalents

For purposes of financial statement disclosure, cash equivalents consist of
all highly liquid instruments with original maturities of three months or less.
The cost of these investments is equivalent to fair market value.

C. Revenue and Receivables

Revenue is recognized when product is shipped to the customer. Allowances
are provided for estimated uncollectible receivables based on historical
experience and review of specific accounts.

Allowances and credits received from suppliers in connection with the
Company's buying and merchandising activities are recognized as earned.

D. Inventories

Inventories, consisting principally of fresh, frozen and packaged foods,
are valued at the lower of cost or market, with cost (net of applicable purchase
rebates) being determined under the first-in, first-out (FIFO) method.

E. Property and Equipment

Property and equipment are stated at cost less accumulated depreciation.
The cost of property and equipment transferred during the original
capitalization of the Company was based on fair market value at the date of
transfer. Major renewals and betterments are capitalized, and ordinary repairs
and maintenance are charged against operations in the period in which the costs
are incurred. Related costs and accumulated depreciation are eliminated from the
accounts upon disposition of an asset and the resulting gain or loss is
reflected in the statement of operations.

F-7
<PAGE> 53

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

Depreciation is computed using the straight-line method over estimated
useful lives from date of acquisition as follows:

<TABLE>
<S> <C>
Buildings and improvements............................................. 25-40 years
Machinery and equipment................................................ 5-15 years
Leasehold improvements................................................. Life of lease
Delivery vehicles...................................................... 7-10 years
</TABLE>

F. Goodwill and Other Noncurrent Assets

Goodwill and other intangible assets are amortized over the periods
expected to be benefited but not exceeding 40 years, using the straight-line
method.

Legal and bank fees associated with the acquisition of loans are
capitalized and amortized using the effective interest method over the term of
the related debt. Such costs are written off upon refinancing or restructuring
of the related debt. (See Note 13).

G. Recoverability of Long-Lived Assets

The recoverability of goodwill and other long-lived assets is assessed
annually and whenever adverse events or changes in circumstances or business
climate indicate that undiscounted cash flows previously anticipated warrant a
reassessment.

H. Income Taxes

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 (FAS 109), "Accounting for Income Taxes".
FAS 109 prescribes an asset and liability approach that requires the recognition
of deferred tax assets and liabilities for the expected future tax consequences
of events that have been recognized in the Company's financial statements or tax
returns. In estimating future tax consequences, FAS 109 generally considers all
expected future events other than changes in the tax law or rates.

I. Statement of Cash Flows

Cash equivalents include interest bearing investments with an original
maturity of less than 90 days. Noncash financing activities for fiscal 1994,
1995 and 1996 include the following:

<TABLE>
<CAPTION>
FISCAL YEAR
--------------------------
1994 1995 1996
------ ------ ------
<S> <C> <C> <C>
Capital lease obligations for additions to the Company's
transportation fleet...................................... $6,320 $3,652 $9,252
Noncash dividends on:
Accretion of mandatorily redeemable preferred stock.... 82 40
Preferred stock (9% on outstanding shares)............. 117
Yield support (20% compounded rate on $5,000 of
equity).............................................. 305
------ ------ ------
$6,824 $3,692 $9,252
====== ====== ======
</TABLE>

F-8
<PAGE> 54

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

J. Net Income (Loss) Per Common Share

Net income (loss) per common share is based on the weighted average number
of shares outstanding, after giving retroactive effect to a 3.936-for-one stock
split approved by the Board of Directors of the Company on September 13, 1994
and effective on October 20, 1994. Shares used in such calculation for all years
also include shares issued to management on October 20, 1994. Net income (loss)
per common share has been adjusted for the preference dividends for
computational purposes for the applicable periods.

K. Accounting Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles 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 period. Actual results could differ from those estimates.

L. Reclassifications

Certain amounts in the prior years' consolidated financial statements have
been reclassified to conform to the current year's presentation.

NOTE 3 -- NONRECURRING CHARGES

On February 19, 1996, the Company terminated discussions with Sara Lee
regarding the proposed combination of the Company and PYA Monarch. As a result
of the termination of these discussions, which began with a proposal submitted
by Sara Lee in November 1995, the Company wrote off the costs incurred related
to the transaction (primarily legal and advisory fees) of approximately $1.5
million. The after-tax impact of this non-recurring charge was $0.9 million
($.06 per share). Excluding this charge, net income would have been $15.0
million for the year, and net income per share would have been $0.94 for the
year.

NOTE 4 -- ACQUISITION

Effective November 24, 1995, the Company purchased for cash certain assets
of the foodservice business of Rotelle, Inc. for $6.1 million. The excess of
purchase price over the fair value of net assets acquired of approximately $2.6
million will be amortized using the straight-line method over 40 years.
Unaudited fiscal 1995 sales of this business approximated $37 million.

F-9
<PAGE> 55

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 5 -- RECEIVABLES

Receivables are composed of the following:

<TABLE>
<CAPTION>
JULY 1, 1995 JUNE 29, 1996
------------ -------------
<S> <C> <C>
Customer accounts and notes.................................. $ 87,279 $ 91,743
Less allowance for doubtful accounts......................... (2,253) (2,073)
---------- -----------
Net customer................................................. 85,026 89,670
---------- -----------
From suppliers............................................... 28,636 38,417
From related parties......................................... 3,818 1,566
Less allowance for doubtful accounts......................... (273) (100)
---------- -----------
Net supplier................................................. 32,181 39,883
---------- -----------
Tax refunds.................................................. 799
Other........................................................ 5,485 5,408
---------- -----------
Total other.................................................. 6,284 5,408
---------- -----------
$123,491 $ 134,961
========== ===========
</TABLE>

NOTE 6 -- PROPERTY AND EQUIPMENT

The components of property and equipment are as follows:

<TABLE>
<CAPTION>
JULY 1, 1995 JUNE 29, 1996
------------ -------------
<S> <C> <C>
Land......................................................... $ 9,685 $ 9,712
Buildings.................................................... 47,059 52,879
Machinery and equipment...................................... 27,849 30,280
Leasehold improvements....................................... 5,831 5,834
Vehicles held under capital leases (Note 11)................. 33,950 43,996
---------- -----------
124,374 142,701
Accumulated depreciation..................................... (43,221) (52,528)
---------- -----------
$ 81,153 $ 90,173
========== ===========
</TABLE>

F-10
<PAGE> 56

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 7 -- GOODWILL AND OTHER NONCURRENT ASSETS

Goodwill and other noncurrent assets are composed of the following:

<TABLE>
<CAPTION>
JULY 1, 1995 JUNE 29, 1996
------------ -------------
<S> <C> <C>
Goodwill..................................................... 83,143 85,916
Accumulated amortization..................................... (12,340) (14,456)
---------- -----------
70,803 71,460
---------- -----------
Loan acquisition costs....................................... 1,690 1,703
Accumulated amortization..................................... (158) (419)
---------- -----------
1,532 1,284
---------- -----------
Other intangible assets...................................... 5,601 5,601
Accumulated amortization..................................... (1,342) (1,564)
---------- -----------
4,259 4,037
---------- -----------
Note receivable -- Valley Industries......................... 5,500
---------- -----------
$ 76,594 $ 82,281
========== ===========
</TABLE>

NOTE 8 -- RELATED PARTY TRANSACTIONS

The Company regularly purchases products from Sara Lee and its affiliates
for resale to customers. Related party payables from such transactions are
$5,060 and $2,666 at July 1, 1995 and June 29, 1996, respectively. The Company
believes that such purchases are at prices not more favorable than those charged
to unrelated distributors of Sara Lee products. Total purchases from Sara Lee
and its affiliates aggregated $69,820, $72,590 and $64,774 in fiscal 1994, 1995
and 1996, respectively.

NOTE 9 -- ACCRUED EXPENSES

The components of accrued expenses are as follows:

<TABLE>
<CAPTION>
JULY 1, 1995 JUNE 29, 1996
------------ -------------
<S> <C> <C>
Compensation................................................. $ 3,343 $ 3,940
Benefits/taxes............................................... 2,175 2,710
Interest..................................................... 1,903 1,887
Operating expenses........................................... 3,436 4,098
--------- ----------
$ 10,857 $12,635
========= ==========
</TABLE>

F-11
<PAGE> 57

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 10 -- DEBT

Long-term debt is composed of the following:

<TABLE>
<CAPTION>
JULY 1, 1995 JUNE 29, 1996
------------ -------------
<S> <C> <C>
Revolving credit loan........................................ $ 45,000 $ 1,000
Trade accounts receivable securitization..................... 49,378
Senior notes................................................. 85,000 85,000
-------- ---------
Noncurrent senior debt.................................. 130,000 135,378
Subordinated debt
Promissory note payable to PYA/Monarch.................. 4,000 4,067
-------- ---------
Total long-term debt.................................... $134,000 $ 139,445
======== =========
</TABLE>

Under the revolving credit loan arrangement, the Company is entitled to
borrow up to $110 million with interest payable quarterly at the bank's prime
rate or, at the option of the Company, the London Interbank Offered Rate
("LIBOR"), plus .50% per annum. Borrowings are limited to 85% of eligible
receivables and subsidiary borrowing base plus 50% of eligible inventory. While
the Company may repay all or a portion of such borrowings at any time, any
outstanding principal must be paid in full on or before November 10, 1999. The
Company is required to pay an annual commitment fee of 0.2% on the unused
portion of the credit arrangement.

In May 1996, the Company entered into a three year agreement pursuant to
which the Company sells, on an ongoing basis and without recourse, an undivided
percentage ownership interest in a designated pool of trade accounts receivable
to an independent issuer of receivable-backed paper (the "Conduit") for proceeds
up to $50 million. In order to maintain the designated balance in the pool of
accounts receivables sold, the Company is obligated to sell undivided percentage
interests in new receivables as existing receivables are collected. Pursuant to
the agreement, the Company established a wholly-owned, bankruptcy remote
subsidiary (JPFD Funding Company) to purchase the receivables from the operating
subsidiaries and then sell the undivided percentage ownership interest in the
designated pool of receivables to the Conduit. The commitment of the Conduit
under the agreement is renewable annually. The Company has retained
substantially the same credit risk as if the receivables had not been sold. The
Company retains collection and administrative responsibilities on the
participating interest sold as agent for the purchaser. The interest rate on
borrowings under this program is reset at intervals not exceeding 90 days, at
the option of the Company, and is based on the Conduit's commercial paper rates
plus 30 basis points. The effective interest rate on outstanding borrowings
under the agreement at June 29, 1996 is 5.70%.

The senior notes are payable in seven annual installments beginning in
October 1998. Interest is paid semiannually at an annual rate of 8.55%.

In 1989, the Company loaned to PYA/Monarch $110 million in exchange for a
promissory note. The note is due in installments through December 31, 1998 and
bears interest at rates between 10.35% and 10.8% per annum. The Company assumed
a promissory note payable to PYA/Monarch of $112 million which is due in
installments through May 31, 1998 and bears interest at 11.0% per annum. Under a
Note Offset Agreement between the parties, maturities of principal and interest
payable under the two notes are to be settled by offsetting amounts due, with
the net difference being carried until settlement as an obligation or
receivable. The accompanying consolidated balance sheets reflect a net
noncurrent note payable balance of $4,000 and $4,067 at July 1, 1995 and June
29, 1996, respectively.

At June 29, 1996, the Company has approximately $12.1 million of
outstanding letters of credit securing the Company's medical and workers'
compensation insurance policies.

F-12
<PAGE> 58

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 10 -- DEBT -- (CONTINUED)

Bank loan and senior note covenants restrict the payment of dividends and
require the Company and certain subsidiaries to maintain specified levels of
working capital and net worth to meet various financial ratios. Bank and senior
note borrowings are unsecured.

Aggregate annual principal payments applicable to long-term debt, excluding
capital leases (see Note 11), are as follows:

<TABLE>
<CAPTION>
FISCAL
YEAR ENDING
-----------
<S> <C>
1997...................................................................... $ 0
1998...................................................................... 4,067
1999...................................................................... 12,143
2000...................................................................... 62,521
2001...................................................................... 12,143
2002 and thereafter....................................................... 48,571
--------
$139,445
========
</TABLE>

Based on the borrowing rates currently available to the Company for
indebtedness with similar terms and average maturities, the fair value of the
Company's long-term debt is estimated to be $142,043.

NOTE 11 -- LEASES

Operating

The Company leases its corporate office facilities and certain equipment
under operating leases. Charges to operations for all operating leases were
$5,432, $6,026 and $6,298 in fiscal 1994, 1995 and 1996, respectively.

Capital

The Company leases the majority of its delivery fleet under capital leases.
Capitalized delivery fleet leases are reflected for the targeted lease periods.
The interest portion of the future minimum capital lease payments has been
calculated using a combination of a floating interest rate, currently at 4.5%,
and fixed rates ranging from 4.85% to 8.43% based on the terms of the lease. The
Company is charged interest monthly based on a fixed or floating rate option
based on the prime rate or the lessor's commercial paper rate.

F-13
<PAGE> 59

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 11 -- LEASES -- (CONTINUED)

Set forth below are the future minimum lease payments under capital leases
and operating leases with noncancelable terms beyond one year.

<TABLE>
<CAPTION>
FISCAL OPERATING CAPITAL
YEAR ENDING LEASES LEASES
------------------------------------------------------------------ --------- -------
<S> <C> <C>
1997.............................................................. $ 4,772 $ 5,767
1998.............................................................. 3,705 4,660
1999.............................................................. 2,013 4,172
2000.............................................................. 1,698 3,874
2001.............................................................. 1,652 3,520
2002 and thereafter............................................... 1,734 2,739
------- -------
$15,574 24,732
=======
Less interest portion............................................. (3,367)
-------
21,365
Less current obligations.......................................... (4,690)
-------
Noncurrent obligations............................................ $16,675
=======
</TABLE>

NOTE 12 -- INCOME TAXES

The components of income tax expense (before extraordinary charge) are as
follows:

<TABLE>
<CAPTION>
FISCAL YEAR
---------------------------
1994 1995 1996
----- ------- -------
<S> <C> <C> <C>
Current tax (expense) benefit
U.S. federal......................................... $ 125 $(2,632) $(8,933)
State and local...................................... (244) (928) (1,061)
----- ------- -------
Total current................................... (119) (3,560) (9,994)
----- ------- -------
Deferred tax (expense) benefit
U.S. federal......................................... (516) (2,332) 26
State and local...................................... (6) (70) 8
----- ------- -------
Total deferred.................................. (522) (2,402) 34
----- ------- -------
Total tax expense recorded................................ $(641) $(5,962) $(9,960)
===== ======= =======
</TABLE>

Deferred income taxes represent the taxes payable by the Company in future
periods arising from temporary differences between assets and liabilities for
financial reporting and tax purposes. Deferred tax

F-14
<PAGE> 60

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 12 -- INCOME TAXES -- (CONTINUED)

(expense) benefit results from changes in the deferred tax assets and
liabilities. Temporary differences and the resulting deferred income taxes are
as follows:

<TABLE>
<CAPTION>
JULY 1, 1995 JUNE 29, 1996
------------ -------------
<S> <C> <C>
Current
Inventory............................................... $ (361) $ (294)
Allowance for doubtful accounts......................... 567 873
Accrued expenses and other.............................. 228 91
---------- -----------
Current deferred tax asset......................... 434 670
---------- -----------
Noncurrent
Property and equipment.................................. (8,846) (9,362)
Intangible assets....................................... (1,712) (1,623)
Other, net.............................................. (984) (759)
---------- -----------
Noncurrent deferred tax liability.................. (11,542) (11,744)
---------- -----------
Total deferred income taxes........................ $(11,108) $ (11,074)
========== ===========
</TABLE>

The effective income tax rate on consolidated pre-tax income (loss) differs
from the statutory U.S. federal income tax rate for fiscal 1994, 1995 and 1996
as shown below:
<TABLE>
<CAPTION>
FISCAL YEAR
-----------------------------------------------------------
1994 1995 1996
--------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Computed statutory (expense)
benefit....................... $ 411 35.00% $(4,386) (35.00)% $(8,427) (35.00)%
State and local income tax, net
of federal tax................ (161) (13.71) (649) (5.20) (785) (3.26)
Permanent differences........... (761) (64.82) (1,161) (9.29) (845) (3.51)
Enacted tax rate change......... (156) (13.29)
Gas tax credit.................. 125 10.65 156 1.25 97 0.40
Other........................... (99) (8.43) 78 0.64
----- ------ ------- ------ ------- ------
$(641) (54.60)% $(5,962) (47.60)% $(9,960) (41.37)%
===== ====== ======= ====== ======= ======
</TABLE>

All tax years of the Company are open for examination. The Internal Revenue
Service and certain state authorities have examinations in process. In fiscal
1994, the Company increased its U.S. deferred tax liability as a result of tax
legislation enacted August 10, 1993 increasing the corporate tax rate from 34%
to 35%.

NOTE 13 -- STOCKHOLDERS' EQUITY

Original Capitalization and Recapitalization

For financial reporting purposes, the original capitalization of the
Company was accounted for under guidelines established for leveraged buyout
transactions when the previous owner's interest declines as established by the
Financial Accounting Standards Board's Emerging Issues Task Force. Under this
guidance, the capitalization of the Company was treated as an asset purchase
(fair value accounting) to the extent of new investors' interests and as a
capital reorganization (carryover basis) to the extent of PYA/Monarch's
continuing interest. Distributions to PYA/Monarch in excess of its carryover
basis for its continuing ownership interest were treated as a separate component
of stockholders' equity.

F-15
<PAGE> 61

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 13 -- STOCKHOLDERS' EQUITY -- (CONTINUED)

In November 1994, the Company completed a recapitalization plan (the
"Recapitalization"). The principal components of the Recapitalization included:
(1) the initial public offering (the "Offering") of 7,825,000 shares of common
stock, par value $0.01 per share, of the Company at a price of $11.00 per share;
(2) the establishment of a new $110 million bank credit facility; (3) the
private placement of $85 million aggregate principal amount of 8.55% Senior
Notes due 2004; (4) the conversion into shares of common stock of $47.3 million
principal amount of subordinated payment-in-kind Promissory Notes due 2004; (5)
the conversion into shares of common stock of all of the outstanding shares of
the Company's zero coupon senior preferred stock having a mandatory redemption
date of July 3, 2004; and (6) the redemption of all of the outstanding shares of
the Company's zero coupon junior preferred stock having a mandatory redemption
date of July 3, 2004. The net proceeds from the Recapitalization were used to
repay or refinance substantially all of the existing indebtedness of the Company
and to redeem the junior preferred stock. In connection with the
Recapitalization, the Company incurred a $4.6 million extraordinary charge (net
of tax benefits of $3.1 million) in the second quarter of fiscal 1995 for the
write-off of deferred financing costs relating to existing indebtedness as well
as other fees and expenses related to the early extinguishment of debt. As of
the Offering closing date, all outstanding shares of all classes of the
Company's common stock were converted into the class of common stock issued in
the Offering.

Employee Stock Purchase Plan

Effective on the Offering closing date, the Company adopted the 1994
Employee Stock Purchase Plan, pursuant to which all full-time employees of the
Company and its subsidiaries who have been employed by the Company for 90 days
or more are eligible to purchase shares of common stock from the Company. An
aggregate 1,500,000 shares of common stock may be issued and purchased under the
plan. Eligible employees may purchase shares of common stock at a price equal to
85% of the market price per share on each quarterly investment date. Purchases
under this plan totaled 28,080 shares and 33,940 shares during fiscal 1995 and
fiscal 1996, respectively.

Management Stock Options

Effective on the Offering closing date, the Company adopted the 1994 Stock
Incentive Plan (the "Stock Option Plan"). The Stock Option Plan, which
terminates on the tenth anniversary of the effective date of the Plan,
authorizes the grant of incentive stock options, non-qualified stock options,
restricted stock awards, stock appreciation rights, or any combination thereof,
at the discretion of the Compensation Committee of JP's Board of Directors.
Subject to adjustment in certain circumstances, the aggregate number of shares
of common stock which may be issued under the Stock Option Plan upon the
exercise of options or stock appreciation rights and vesting of restricted stock
may not exceed 1,532,404 shares.

The option price per share under each option granted under the Stock Option
Plan may not be less than 100% (110% in the case of an optionee who is a 10%
stockholder) of the fair market value per share on the date of the option grant.
One-third of each option granted to a participant vests on each of the first,
second and third anniversary of the date on which the option was granted. Upon a
change in control (as defined in the Stock Option Plan) of the Company, all
outstanding and previously unvested options will become immediately exercisable.
The Company applied the intrinsic value based method of accounting prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," in accounting for its stock option awards. Accordingly, the Company
has not recognized any related compensation expense. Beginning with financial
statements for fiscal 1997, the Company will be required to make certain
additional disclosures as if the fair value based method of accounting defined
in SFAS No. 123, "Accounting for Stock-Based Compensation," had been applied to
the Company's stock option grants made subsequent to 1994.

F-16
<PAGE> 62

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 13 -- STOCKHOLDERS' EQUITY -- (CONTINUED)

A summary of changes in outstanding stock options follows:

<TABLE>
<CAPTION>
INCENTIVE OPTION PRICE
STOCK OPTIONS PER SHARE
------------- ---------------
<S> <C> <C>
Balance, July 2, 1994................................... 0
Options granted.................................... 400,877 $11.00 - $12.50
Options cancelled.................................. (32,245) $11.00
Options exercised.................................. 0
---------- ---------------
Balance, July 1, 1995................................... 368,632 $11.00 - $12.50
Options granted.................................... 158,868 $14.25 - $17.75
Options canceled................................... (57,142) $11.00 - $14.25
Options exercised.................................. (16,881) $11.00 - $12.50
---------- ---------------
Balance, June 29, 1996.................................. 453,477 $11.00 - $17.75
</TABLE>

The Compensation Committee has the authority to determine the terms and
conditions of any restricted stock awards under the Stock Option Plan. No such
awards were made through June 29, 1996.

Directors Stock Options

Effective on the Offering closing date, the Company adopted the Outside
Directors Stock Option Plan (the "Plan"). The Plan provides for an initial grant
of an option to each director of the Company who is not also an employee of the
Company or a nominee or officer of Sara Lee or its affiliates to purchase 5,000
shares and for an annual grant of an option to purchase 1,000 shares at the then
current market value. Options are granted for a term of ten years. One fourth of
each option granted under the Plan vests on the date of grant, and an additional
one-fourth of each such option vests on each of the first, second and third
anniversary of the option grant date. Options for 15,000 shares and 8,000 shares
were granted under the Plan at an exercise price of $11.00 per share and
$15.75 -- $19.25 per share during fiscal 1995 and fiscal 1996, respectively. All
such options granted remain outstanding at June 29, 1996.

Shareholder Rights Plan

In 1996, the Board of Directors of the Company adopted a shareholder rights
plan. Issuance of rights under the rights plan, subject to specified exceptions,
would be triggered by the acquisition (or certain actions that would result in
the acquisition) of 10% or more of the Company's common stock by any person or
group and by the acquisition (or certain actions that would result in the
acquisition) of any additional shares of common stock by any person or group
owning 10% or more of the common stock on February 19, 1996.

Pursuant to this plan, the Board of Directors of the Company declared a
dividend of one preferred share purchase right (a "Right") for each outstanding
share of common stock of the Company. The dividend was paid on March 1, 1996 to
stockholders of record at the close of business on March 1, 1996. Each newly
issued share of common stock will have attached one Right which will be
initially represented by such share. Each Right entitles the registered holder
of common stock to purchase from the Company, upon the occurrence of the
specified triggering events, one-hundredth of a share of a newly authorized
issue of junior participating

F-17
<PAGE> 63

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 13 -- STOCKHOLDERS' EQUITY -- (CONTINUED)

preferred stock at a price of $95, subject to adjustment. The Company may redeem
the Rights at a price of $.01 per Right prior to a triggering event. The Rights
expire on February 19, 2006.

NOTE 14 -- EMPLOYEE RETIREMENT BENEFITS

The majority of the Company's union employees are covered by
union-administered pension plans. Since these plans are part of multi-employer
pension arrangements, it is not practicable to determine the amount of
accumulated plan benefits or plan net assets applicable solely to the Company's
employees. Charges to operations for all employer defined benefit pension
contributions required by union agreements aggregated $1,632, $1,848 and $2,329
in fiscal 1994, 1995 and 1996, respectively.

The Company sponsors a savings and retirement plan which qualifies under
Section 401(k) of the Internal Revenue Code and for which all full-time
non-union employees of the Company are eligible. In accordance with the terms of
the plan, employees may contribute up to 15% of their annual compensation,
subject to certain limitations. The Company is required to match up to 2% of
each qualified employee's annual contribution, and may make any additional
contributions on an elective basis. The Company's matching contribution may be
made with common stock of the Company. Employer contributions to this plan vest
on the fifth anniversary of participation in the plan. Charges to operations for
employer contributions under this plan were $1,145, $1,274 and $1,482 in fiscal
1994, 1995 and 1996, respectively.

The Company has no defined benefit pension plan for non-union employees.
The Company does not grant any post-retirement benefits other than those
described above.

NOTE 15 -- CONTINGENCIES

The Company is involved, from time to time, in litigation and proceedings
arising out of the ordinary course of business. There are no pending material
legal proceedings or environmental investigations to which the Company is a
party or to which the property of the Company is subject.

The Company is aware of an unasserted environmental claim related to the
Company's Boston branch. The Company has not been the subject of any action or
proceeding related to the site. The Company has been indemnified against any
losses it may incur in connection with hazardous substances on the site, and
does not believe resolution of this matter will have a material adverse effect
on its financial condition or operating results.

NOTE 16 -- SUBSEQUENT EVENTS

Merger with Valley Group

On August 30, 1996, the Company completed a merger with Valley Industries,
Inc. (together with its affiliates, the "Valley Group"), a broadline foodservice
distributor located in Las Vegas, Nevada, for a purchase price of approximately
$40.7 million (net of indebtedness assumed). Under the terms of the merger, to
be accounted for as a pooling of interests, the Company exchanged common shares
for all of the Valley Group's 9,999,996 common shares and ownership interests of
an affiliate, at an exchange rate of approximately .19 of a share of the
Company's common stock for each Valley Group common share.

The financial position and results of operations of the Company and the
Valley Group will be combined in fiscal 1997 retroactive to June 30, 1996, and
the fiscal year of the Valley Group has been conformed to the Company's fiscal
year. In addition, all prior periods presented will be restated to give effect
to the merger. The Company's fiscal 1996 financial statements will be combined
with the Valley Group's fiscal 1996 financial statements for the fiscal year
ended January 31, 1996. The Valley Group's operating results for the period

F-18
<PAGE> 64

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 16 -- SUBSEQUENT EVENTS -- (CONTINUED)

February 1, 1996 to June 29, 1996 will be reflected as an adjustment to the
combined Company's retained earnings on June 30, 1996.

Presented below are pro forma condensed combined financial statements as of
and for the year ended June 29, 1996. Amounts related to the Valley Group are
presented as of and for the year ended January 31, 1996.

PRO FORMA CONDENSED COMBINED BALANCE SHEET
(IN THOUSANDS)

<TABLE>
<CAPTION>
JPF VALLEY GROUP COMBINED
-------- ------------ --------
<S> <C> <C> <C>
Assets
Current assets................................. $228,559 $ 18,081 $246,640
Property, plant and equipment, net............. 90,173 8,417 98,590
Other noncurrent assets........................ 82,281 679 82,960
-------- ---------- --------
$401,013 $ 27,177 $428,190
======== ========== ========
Liabilities and stockholders' equity
Current liabilities............................ $113,875 $ 15,126 $129,001
Long-term obligations.......................... 156,120 9,583 165,703
Other noncurrent liabilities................... 11,744 127 11,871
-------- ---------- --------
281,739 24,836 306,575
Stockholders' equity................................ 119,274 2,341 121,615
-------- ---------- --------
$401,013 $ 27,177 $428,190
======== ========== ========
</TABLE>

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
JPF VALLEY GROUP COMBINED
---------- ------------ ----------
<S> <C> <C> <C>
Net sales........................................ $1,242,676 $121,504 $1,364,180
Net income....................................... 14,057 1,824 15,881
Net income per common share...................... $ 0.88 $ 0.18 $ 0.88
</TABLE>

Arrow Acquisition

Effective August 31, 1996, the Company completed the acquisition of Arrow
Paper and Supply Co., Inc. (together with its affiliates, "Arrow"), a broadline
foodservice distributor in Norwich, Connecticut. Under the terms of the
agreement, which is accounted for as a purchase, the Company purchased certain
assets, assumed or discharged certain liabilities and paid consideration of
$29.6 million. Approximately $1.7 million of the consideration was paid in the
form of common stock and the remainder was paid in cash. The excess of purchase
price over the fair value of net assets is approximately $30.6 million and will
be amortized using the straight-line method over 40 years. Audited fiscal 1995
net sales for Arrow were $74.6 million.

Stock Offering

In August 1996, the Company completed the sale of 3,000,000 shares of
common stock in a public offering (the "Offering") and generated $65.7 million
in net proceeds. The net proceeds of the Offering were used to fund the cash
portion of the Arrow purchase price and to repay indebtedness assumed or
discharged by the Company in connection with its acquisitions of the Valley
Group and Arrow, as discussed above. In

F-19
<PAGE> 65

JP FOODSERVICE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS EXCEPT WHERE NOTED)

NOTE 16 -- SUBSEQUENT EVENTS -- (CONTINUED)

September 1996, the Company received additional net proceeds of $1.6 million in
the Offering from the sale of 75,000 shares to cover over-allotments.

NOTE 17 -- QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial data for the fiscal years ended July 1, 1995
and June 29, 1996 is as follows:

<TABLE>
<CAPTION>
1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- --------
<S> <C> <C> <C> <C>
1996
Net sales................................... $310,760 $302,342 $295,803 $333,771
Gross profit................................ 52,860 51,861 51,509 57,459
Net income.................................. 3,476 3,191 1,402 5,988
Net income per common share................. $ 0.22 $ 0.20 $ 0.09 $ 0.37
======== ======== ======== ========
1995
Net sales................................... $279,839 $272,405 $258,560 $297,449
Gross profit................................ 46,586 45,387 43,424 50,954
Net income (loss) before extraordinary
item...................................... (614) 1,302 1,510 4,372
Net income (loss)........................... (614) (3,288) 1,510 4,372
Net income (loss) per common share before
extraordinary charge...................... $ (0.16) $ 0.14 $ 0.10 $ 0.28
Net income (loss) per common share.......... $ (0.16) $ (0.36) $ 0.10 $ 0.28
======== ======== ======== ========
</TABLE>

F-20
<PAGE> 66

[TEXT ACCOMPANYING GRAPHICS ON GATEFOLD.]

CURRENTLY WITH TWELVE BRANCHES in the Mid-Atlantic, Midwestern and Northeastern
regions of the United States and in Las Vegas, Nevada, JP Foodservice, Inc.(R)
ranks as the nation's sixth largest broadline distributor of food and related
products to restaurants and other institutional foodservice establishments. The
recent acquisitions of Valley Industries, Inc., Arrow Paper and Supply Co., Inc.
and Squeri Food Service, Inc. have extended JP Foodservice's distribution
network into the Western regions of the U.S. and increased the Company's
presence in the Northeastern and Midwestern regions of the U.S., respectively.
The Company markets and distributes over 30,000 national, private and signature
brand items to over 34,000 foodservice customers, including restaurants, hotels,
healthcare facilities, cafeterias and schools. JP Foodservice provides customers
with a single source of supply to satisfy substantially all of their foodservice
needs and offers a comprehensive range of products, including canned and dry
food products, fresh meats, poultry, seafood, frozen foods, fresh produce, dairy
and other refrigerated foods, paper products, cleaning supplies, light
<PAGE> 67

restaurant equipment and other supplies. The Company's product line is one of
the largest in the industry, with national brand products accounting for
approximately 85% of net sales in fiscal 1996. The Company's private label
brands offer its customers a wide range of quality-assured, value-priced
products and its exclusive line of signature products are comparable in quality
and price to national brand items. The Company believes it has one of the best
records in the industry in providing customers with accurate and timely delivery
of product orders. This superior customer service, coupled with the full array
of value-added services offered by the Company, enables the Company to compete
effectively against other foodservice distributors.
<PAGE> 68

[TEXT ACCOMPANYING GRAPHICS ON BACK COVER PAGE]

JP Foodservice has introduced several exclusive signature brand lines in
response to the increasing popularity of foodservice specialties. The Roseli(TM)
line features authentic Italian ingredients in a full line of products. In
addition, during 1996 the Company introduced a full line of Mexican products
under its el Pasado(TM) signature brand and a complete line of gourmet and
foodservice coffees under its Rituals(TM) signature brand.

The Company offers customers a comprehensive range of products, including canned
and dry food products, fresh meats, poultry, seafood, frozen foods, fresh
produce, dairy and other refrigerated foods.
<PAGE> 69

- ------------------------------------------------------
------------------------------------------------------
- ------------------------------------------------------
------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES
OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THOSE TO WHICH IT
RELATES IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER
IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT
THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THIS DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Incorporation of Certain Documents by
Reference............................ 3
Prospectus Summary..................... 4
Risk Factors........................... 8
Use of Proceeds........................ 11
Price Range of Common Stock
and Dividend Policy.................. 11
Capitalization......................... 12
Unaudited Pro Forma Condensed Combined
Financial Statements................. 13
Supplemental Consolidated Financial
Statements........................... 16
Selected Consolidated Financial Data... 20
Management's Discussion and Analysis
of Financial Condition and Results of
Operations........................... 21
Business............................... 26
Management............................. 37
Selling Stockholders................... 39
Shares Eligible for Future Sale........ 40
Underwriting........................... 42
Legal Matters.......................... 43
Experts................................ 43
Available Information.................. 44
Index to Consolidated Financial
Statements........................... F-1

5,700,000 SHARES

JP FOODSERVICE, INC.

COMMON STOCK

LOGO
---------

PROSPECTUS

, 1996

------------
SMITH BARNEY INC.

GOLDMAN, SACHS & CO.

THE ROBINSON-HUMPHREY
COMPANY, INC.
RODMAN & RENSHAW, INC.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable in connection with the sale and
distribution of the securities being registered. All amounts except the
Securities and Exchange Commission registration fee are estimated. All of the
expenses below will be paid by the Company.

<TABLE>
<CAPTION>
ITEM AMOUNT
------------------------------------------------------------------- -------
<S> <C>
Registration fee................................................... $44,322
NASD filing fee.................................................... 15,000
Nasdaq Additional Listing fee...................................... *
Blue Sky fees and expenses......................................... *
Printing and engraving expenses.................................... *
Legal fees and expenses............................................ *
Accounting fees and expenses....................................... *
Transfer Agent and Registrar fees.................................. *
Miscellaneous...................................................... *
-------
Total......................................................... $
=======
</TABLE>

- ---------------
* To be filed by amendment

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Reference is made to the provisions of Article XII of the registrant's
Restated Certificate of Incorporation filed as Exhibit 3.1 hereto and the
provisions of Article XII of the registrant's Amended and Restated By-laws filed
as Exhibit 3.2 hereto.

The registrant is a Delaware corporation, subject to the applicable
indemnification provisions of the General Corporation Law of the State of
Delaware (the "DGCL"). Section 145 of the DGCL provides for the indemnification,
under certain circumstances, of any person in connection with any action, suit
or proceeding, whether civil, criminal, administrative or investigative (other
than derivative actions), brought or threatened involving such persons because
of such person's service in any such capacity with respect to another
corporation or other entity at the request of such corporation.

The registrant's Amended and Restated By-Laws provide for the
indemnification of the officers and directors of the registrant to the fullest
extent permitted by the DGCL. Article XII of the By-laws provides that each
person who was or is made a party to (or is threatened to be made a party to)
any civil or criminal action, suit or proceeding by reason of the fact that such
person is or was a director or officer of the registrant shall be indemnified
and held harmless by the registrant to the fullest extent authorized by the DGCL
against all expense, liability and loss (including, without limitation,
attorneys' fees) incurred by such person in connection therewith, if such person
acted in good faith and in a manner he or she reasonably believed to be or not
opposed to the best interests of the registrant and had no reason to believe
that his or her conduct was illegal.

Article XII of the registrant's Restated Certificate of Incorporation
provides that, to the fullest extent permitted by the DGCL, the registrant's
directors will not be personally liable to the registrant or its stockholders
for monetary damages resulting from a breach of their fiduciary duties as
directors. However, nothing contained in such Article XII shall eliminate or
limit the liability of directors (i) for any breach of the director's duty of
loyalty to the registrant or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of the
law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which
the director derived an improper personal benefit.

II-1
<PAGE> 71

Under the terms of the Amended and Restated Registration Rights Agreement
by and among the registrant, PYA/Monarch, Inc. ("PYA/Monarch") and the other
investors named therein, the registrant has agreed to indemnify PYA/Monarch (and
its permitted transferees), its officers and directors and each underwriter and
person, if any, who controls PYA/Monarch, from certain liabilities relating to
any registration statement that may be filed by the registrant on behalf of such
stockholder, under the terms of that agreement.

There are in effect directors' and officers' liability insurance policies
which insure the registrant's directors and officers against certain liabilities
that they may incur in such capacities.

The Underwriting Agreement (filed as Exhibit 1.1 hereto) provides for
indemnification by the Underwriters of the Company and its officers and
directors, and by the Company of the Underwriters, for certain liabilities
arising under the Securities Act or otherwise.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

The following Exhibits are filed herewith and incorporated herein by
reference:

<TABLE>
<C> <S>
*1.1 Form of Underwriting Agreement.
3.1 Restated Certificate of Incorporation of the Company. Filed as Exhibit 3.1 to
the Company's Quarterly Report on Form 10-Q for the quarterly period ended
March 30, 1996 and incorporated herein by reference.
3.2 Amended and Restated By-Laws of the Company. Filed as Exhibit 3.2 to the
Company's Quarterly Report on Form 10-Q for the quarterly period ended March
30, 1996 and incorporated herein by reference.
4.1 See Exhibits 3.1 and 3.2 for provisions of the Restated Certificate of
Incorporation and the Amended and Restated By-Laws of the Company defining the
rights of holders of the Company's Common Stock.
4.2 Specimen certificate representing common stock, par value $.01 per share, of
the Company. Filed as Exhibit 4.3 to the Company's Registration Statement on
Form S-1 (No. 33-82724) and incorporated herein by reference.
*5.1 Opinion of Shaw, Pittman, Potts & Trowbridge, counsel to the Company, regarding
the validity of the securities being issued.
**23.1 Consent of Price Waterhouse LLP, Independent Accountants.
**23.2 Consent of KPMG Peat Marwick LLP, Independent Accountants.
**23.3 Consent of Blum Shapiro and Company, P.C., Independent Accountants.
*23.4 Consent of Shaw, Pittman, Potts & Trowbridge (contained in Exhibit 5.1).
24.1 Power of Attorney (included on page II-6).
**27 Financial Data Schedule.
</TABLE>

- ---------------
* To be filed by amendment.

** Filed herewith.

(b) Financial Statement Schedules

Either not applicable or shown in the financial statements or notes
thereto.

ITEM 17. UNDERTAKINGS

The Registrant hereby undertakes to provide the Underwriters at the closing
specified in the Underwriting Agreement, certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.

II-2
<PAGE> 72

The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted as to directors, officers, and controlling persons of the
Registrant pursuant to the Delaware General Corporation Law, the Restated
Certificate of Incorporation or the Amended and Restated By-laws of Registrant,
indemnification agreements entered into between Registrant and its officers and
directors, the Underwriting Agreement, or otherwise, Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a director, officer, or controlling person of Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering herein.

II-3
<PAGE> 73

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Columbia, State of Maryland, on October 10, 1996.

JP FOODSERVICE, INC.
(Registrant)

By /s/ JAMES L. MILLER
------------------------------------
James L. Miller
President and Chief Executive
Officer
(Duly Authorized Officer)

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James L. Miller, Lewis Hay, III and
George T. Megas, and each of them, as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the date indicated.

<TABLE>
<S> <C>
October 10, 1996 /s/ JAMES L. MILLER
-----------------------------------------------
James L. Miller, Chairman of the Board,
President and Chief Executive Officer
(Principal Executive Officer)

October 10, 1996 /s/ LEWIS HAY, III
-----------------------------------------------
Lewis Hay, III, Director,
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

October 10, 1996 /s/ GEORGE T. MEGAS
-----------------------------------------------
George T. Megas, Vice President -- Finance
(Principal Accounting Officer)

October 10, 1996 /s/ GEORGE A. MIDWOOD
-----------------------------------------------
George A. Midwood, Director

October 10, 1996 /s/ MICHAEL J. DRABB
-----------------------------------------------
Michael J. Drabb, Director

October 10, 1996 /s/ DAVID M. ABRAMSON
-----------------------------------------------
David M. Abramson, Director,
Senior Vice President and General Counsel

October 10, 1996 /s/ ERIC E. GLASS
-----------------------------------------------
Eric E. Glass, Director
</TABLE>

II-4
<PAGE> 74

<TABLE>
<S> <C>
October 10, 1996 /s/ MARK P. KAISER
-----------------------------------------------
Mark P. Kaiser, Director,
Senior Vice President -- Sales,
Marketing and Procurement

October 10, 1996 /s/ PAUL I. LATTA
-----------------------------------------------
Paul I. Latta, Director

October 10, 1996 /s/ DEAN R. SILVERMAN
-----------------------------------------------
Dean R. Silverman, Director
</TABLE>

II-5
<PAGE> 75

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
------- -------------------------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement.
3.1 Restated Certificate of Incorporation of the Company. Filed as Exhibit 3.1 to
the Company's Quarterly Report on Form 10-Q for the quarterly period ended
March 30, 1996 and incorporated herein by reference.
3.2 Amended and Restated By-Laws of the Company. Filed as Exhibit 3.2 to the
Company's Quarterly Report on Form 10-Q for the quarterly period ended March
30, 1996 and incorporated herein by reference.
4.1 See Exhibits 3.1 and 3.2 for provisions of the Restated Certificate of
Incorporation and the Amended and Restated By-Laws of the Company defining the
rights of holders of the Company's Common Stock.
4.2 Specimen certificate representing common stock, par value $.01 per share, of
the Company. Filed as Exhibit 4.3 to the Company's Registration Statement on
Form S-1 (No. 33-82724) and incorporated herein by reference.
*5.1 Opinion of Shaw, Pittman, Potts & Trowbridge, counsel to the Company, regarding
the validity of the securities being issued.
**23.1 Consent of Price Waterhouse LLP, Independent Accountants.
**23.2 Consent of KPMG Peat Marwick LLP, Independent Accountants.
**23.3 Consent of Blum Shapiro and Company, P.C., Independent Accountants.
*23.4 Consent of Shaw, Pittman, Potts & Trowbridge (contained in Exhibit 5.1).
24.1 Power of Attorney (included on page II-6).
**27 Financial Data Schedule.
</TABLE>

- ---------------
* To be filed by amendment.

** Filed herewith.

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in and to the incorporation by reference in
the Prospectus constituting part of this Registration Statement on Form S-3 of
JP Foodservice, Inc. of our report dated August 2, 1996, except as to Note 16,
which is as of September 10, 1996, which appears in such Prospectus and on page
F-1 of JP Foodservice, Inc.'s Annual Report on Form 10-K for the year ended
June 29, 1996. We also consent to the references to us under the headings
"Experts" and "Selected Consolidated Financial Data" in such Prospectus.
However, it should be noted that Price Waterhouse LLP has not prepared or
certified such "Selected Consolidated Financial Data."

PRICE WATERHOUSE LLP

Baltimore, Maryland
October 9, 1996

<PAGE> 1
EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

The Board of Directors
Valley Industries, Inc. and Subsidiaries
and Z Leasing Company (A General Partnership):

We consent to the incorporation by reference in the Prospectus constituting
part of the Registration Statement on Form S-3 of JP Foodservice,
Inc. of our report dated June 17, 1996, with respect to the combined balance
sheets of Valley Industries, Inc. and Subsidiaries and Z Leasing Company (A
General Partnership) as of January 31, 1996, 1995, and 1994 and the related
combined statements of earnings, stockholders' and partners' equity, and cash
flows for each of the years in the three year period ended January 31, 1996
which report appears in current report on Form 8-K of JP Foodservice, Inc.
dated July 1, 1996. We also consent to the reference to our firm under the
heading "Experts" in the Prospectus.

KPMG PEAT MARWICK LLP

Las Vegas, Nevada
October 9, 1996

<PAGE> 1
EXHIBIT 23.3

[BLUM SHAPIRO & COMPANY LETTERHEAD]

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of the
Registration Statement on Form S-3 of JP Foodservice, Inc. of our report dated
July 15, 1996, with respect to the combined financial statements of Arrow Paper
and Supply Co., Inc. and Affiliate for the year ended December 29, 1995.

/s/ BLUM SHAPIRO & COMPANY, P.C.

West Hartford, Connecticut
October 9, 1996

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> JUL-01-1995 JUN-29-1996
<PERIOD-START> JUL-03-1994 JUL-02-1995
<PERIOD-END> JUL-01-1995 JUN-29-1996
<CASH> 15,418 11,613
<SECURITIES> 0 0
<RECEIVABLES> 126,017 137,134
<ALLOWANCES> 2,526 2,173
<INVENTORY> 67,629 72,758
<CURRENT-ASSETS> 215,291 228,559
<PP&E> 124,374 142,701
<DEPRECIATION> 43,221 52,528
<TOTAL-ASSETS> 373,038 401,013
<CURRENT-LIABILITIES> 111,568 113,875
<BONDS> 0 0
0 0
0 0
<COMMON> 159 160
<OTHER-SE> 103,212 119,114
<TOTAL-LIABILITY-AND-EQUITY> 373,038 401,013
<SALES> 1,108,253 1,242,676
<TOTAL-REVENUES> 1,108,253 1,242,676
<CGS> 921,902 1,028,987
<TOTAL-COSTS> 153,400 174,816
<OTHER-EXPENSES> 20,419 14,856
<LOSS-PROVISION> 1,619 1,682
<INTEREST-EXPENSE> 20,419 13,339
<INCOME-PRETAX> 12,532 24,017
<INCOME-TAX> 5,962 9,960
<INCOME-CONTINUING> 6,570 14,057
<DISCONTINUED> 0 0
<EXTRAORDINARY> 4,590 0
<CHANGES> 0 0
<NET-INCOME> 1,940<F1> 14,057
<EPS-PRIMARY> 0.17 0.88
<EPS-DILUTED> 0.17 0.88
<FN>
<F1>INCLUDES $40 OF PREFERENCE DIVIDENDS APPLICABLE TO COMMON SHAREHOLDERS
</FN>

</TABLE>