JP FOODSERVICE INC, S-3, 1996-07-01

JP FOODSERVICE INC
S-3, 1996-07-01
GROCERIES, GENERAL LINE

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 1, 1996

REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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
(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
(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
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED(1) PER SHARE(2) PRICE(1)(2)(3) REGISTRATION FEE(3)

- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01....... 3,450,000 shares $24.35 $84,007,500 $28,968.10
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Includes up to 450,000 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 3,450,000 shares of Common Stock was based on an
estimated maximum offering price of $24.35 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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

JP FOODSERVICE, INC.

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

FORM S-3 REGISTRATION STATEMENT
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K

<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION CAPTION IN PROSPECTUS
----------------------------------------- ---------------------------------------------
<C> <S> <C>
1. Forepart of the Registration Statement
and Outside Front Page of Prospectus... Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages
of Prospectus.......................... Inside Front Cover Page; Outside Back Cover
Page
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges..... Prospectus Summary; Risk Factors
4. Use of Proceeds.......................... Use of Proceeds
5. Determination of Offering Price.......... Underwriting
6. Dilution................................. Not Applicable
7. Selling Security Holders................. Not Applicable
8. Plan of Distribution..................... Outside Front Cover Page; Underwriting
9. Description of Securities to be
Registered............................. Not Applicable
10. Interests of Named Experts and Counsel... Not Applicable
11. Material Changes......................... Front Cover Page; Prospectus Summary; Risk
Factors; Use of Proceeds; Price Range of
Common Stock and Dividend Policy;
Capitalization; Unaudited Pro Forma
Condensed Combined Financial Statements;
Selected Consolidated Financial Data;
Management's Discussion and Analysis of
Financial Condition and Results of
Operations; Business; Management; Principal
Stockholders; Shares Eligible for Future
Sale
12. Incorporation of Certain Information by
Reference.............................. Incorporation of Certain Information by
Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities............................ Not Applicable
</TABLE>
<PAGE> 3

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 JULY 1, 1996

PROSPECTUS
3,000,000 SHARES

(LOGO)
COMMON STOCK
------------------

All 3,000,000 shares of common stock (the "Common Stock") of JP
Foodservice, Inc. (the "Company" or "JP Foodservice") offered hereby (the
"Offering") are being sold by the Company. Each share will have attached one
preferred share purchase right which will initially be represented by such
share. The Common Stock is quoted on the Nasdaq National Market under the symbol
"JPFS." On June 28, 1996, the last reported sale price of the Common Stock, as
reported on the Nasdaq National Market, was $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.

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

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>
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share $ $ $
- --------------------------------------------------------------------------------------------------
Total(3) $ $ $
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>

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

(2) Before deducting expenses estimated at $ , which are payable by the
Company.

(3) The Company has granted to the Underwriters a 30-day option to purchase
up to 450,000 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 Company will be $ , $ and $ , respectively.

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

The shares of Common Stock offered hereby 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.

THE ROBINSON-HUMPHREY COMPANY, INC.
RODMAN & RENSHAW, INC.
, 1996
<PAGE> 4

[MAP OF DISTRIBUTION SERVICE AREA
AND PHOTOGRAPHS OF 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> 5

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 July 1, 1995; (b) the Company's Quarterly Reports on Form 10-Q for the
fiscal quarters ended September 30, 1995, December 30, 1995 and March 30, 1996;
(c) the Company's Current Reports on Form 8-K filed for reportable events dated
November 2, 1995, November 30, 1995, December 21, 1995, January 22, 1996,
February 19, 1996, May 17, 1996 and July 1, 1996; (d) the Company's Proxy
Statement for the Annual Meeting of Stockholders held on November 17, 1995; and
(e) 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
executive offices located at 9830 Patuxent Woods Drive, Columbia, Maryland
21046, telephone number (410) 312-7100.

3
<PAGE> 6

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 appearing elsewhere
in this Prospectus and incorporated herein by reference. Except as otherwise
indicated herein, all share and per share amounts set forth in this Prospectus
assume no exercise of the Underwriters' over-allotment option and exclude the
2,009,900 shares of Common Stock (subject to adjustment) issuable upon
consummation of the Valley Acquisition (as defined). Unless the context
otherwise requires, as used in this Prospectus, the "Company" or "JP
Foodservice" refers to JP Foodservice, Inc. and its subsidiaries. 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. The
Company ranks as the nation's sixth largest broadline distributor based on 1995
calendar year net sales. Upon consummation of its proposed acquisition of Valley
Food Distributors of Nevada as described below, which will extend the Company's
operations into the Western region of the United States, the Company will rank
as the nation's fifth largest broadline distributor based on pro forma 1995
calendar year net sales. 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
nine full-service distribution centers. The Company markets and distributes
approximately 28,000 national, private and signature brand items to over 23,000
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 the nine months ended March 30, 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 completed acquisitions in the fourth
quarter of fiscal 1995 and the second quarter of fiscal 1996, which accounted
for net sales growth of approximately 2.0% in the nine months ended March 30,
1996. The Company's gross profit margin improved from 16.7% in fiscal 1994 to
16.8% in fiscal 1995 and 17.2% in the nine months ended March 30, 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 the nine months ended March 30, 1996. As
a result, the Company's income from operations increased 11.6% in fiscal 1995
and 15.9% in the nine months ended March 30, 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> 7

- 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 currently account for approximately 83% of net sales. 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 1994, the Company 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 the first half of fiscal 1997, the Company plans to introduce
a full line of Oriental-style products under its Beijing
Chef (TM)signature brand and 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 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

5
<PAGE> 8

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 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

Since June 1995, the Company has completed two fold-in acquisitions of
businesses with combined annual net sales of approximately $50 million in the
Company's Pennsylvania market. In addition, the Company has sought to extend the
scope of its distribution network into the Western region of the United States
by entering into a definitive agreement on May 17, 1996 to acquire Valley Food
Distributors of Nevada (together with its affiliates, "Valley Foods"), a
broadline distributor with a leading market share of the Las Vegas, Nevada
foodservice market (the "Valley Acquisition"). 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. The Company
believes that Las Vegas is one of the country's fastest growing foodservice
markets.

The Company's agreement with Valley Foods provides that JP Foodservice will
acquire Valley Foods in consideration for 2,009,900 shares of Common Stock
(subject to adjustment). Consummation of the Valley Acquisition, which is
subject to satisfaction of customary conditions, is currently expected to occur
on or before August 31, 1996. Neither the Offering nor the Valley Acquisition is
conditioned upon consummation of the other transaction.

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 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 which
reduced the Company's indebtedness and related interest expense and improved its
operating and financial flexibility.

THE OFFERING

<TABLE>
<S> <C>
Offering..................................... 3,000,000 shares
Common Stock to be outstanding after the
Offering................................... 19,025,929 shares(1)
Use of proceeds.............................. The net proceeds of the Offering will be used
for repayment of indebtedness and for working
capital and general corporate purposes,
including facility expansion and
acquisitions.
Nasdaq National Market symbol................ JPFS
</TABLE>

- ---------------
(1) Does not include (i) 450,000 shares subject to the Underwriters'
over-allotment option, (ii) 461,504 shares subject to stock options granted
by the Company under its stock option plans as of June 28, 1996 or (iii)
2,009,900 shares of Common Stock (subject to adjustment) issuable upon
consummation of the Valley Acquisition. See "Unaudited Pro Forma Condensed
Combined Financial Statements."

6
<PAGE> 9

SUMMARY CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-------------------------------------------------------------
JULY 1, 1995
--------------------------
JULY 3, 1993(1) JULY 2, 1994 ACTUAL PRO FORMA(2)
--------------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales................ $ 1,025,854 $1,029,000 $1,108,253 $1,229,757
Gross profit............. 175,046 171,883 186,351 207,485
Amortization of
intangible assets...... 2,266 2,265 2,263 2,263
Stock compensation
charge................. -- -- 709 709
Income from operations... 26,579 29,537 32,951 36,630
Nonrecurring charge...... -- -- -- --
Interest expense......... 36,971 30,711 20,419 21,690
Income (loss) before
income taxes and
extraordinary charge... (10,392) (1,174) 12,532 14,967
Income (loss) before
extraordinary charge... (7,596) (1,815) 6,570 8,160
Net income (loss)........ (7,596) (1,815) 1,980 3,570
Preference dividends..... (2,427) (504) (40) (40)
Net income (loss)
applicable to common
stockholders........... (10,023) (2,319) 1,940 3,530
PER SHARE DATA:
Net income (loss) per
common share before
extraordinary charge... $ (2.55) $ (0.59) $ 0.59(3) $ 0.65(3)
Net income (loss) per
common share........... (2.55) (0.59) 0.17(3) 0.28(3)
Weighted average number
of shares of common
stock outstanding...... 3,932,748 3,932,748 11,122,343 12,607,143

<CAPTION>
NINE MONTHS ENDED
-----------------------------------------
MARCH 30, 1996
APRIL 1, --------------------------
1995 ACTUAL PRO FORMA(2)
----------- ---------- ------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales................$ 810,804 $ 908,905 $1,003,552
Gross profit............. 135,397 156,230 172,730
Amortization of
intangible assets...... 1,697 1,741 1,741
Stock compensation
charge................. 709 -- --
Income from operations... 22,083 25,596 28,637
Nonrecurring charge...... -- 1,517 1,517
Interest expense......... 16,933 9,913 10,862
Income (loss) before
income taxes and
extraordinary charge... 5,150 14,166 16,295
Income (loss) before
extraordinary charge... 2,197 8,069 9,272
Net income (loss)........ (2,393 ) 8,069 9,272
Preference dividends..... (40 ) -- --
Net income (loss)
applicable to common
stockholders........... (2,433 ) 8,069 9,272
PER SHARE DATA:
Net income (loss) per
common share before
extraordinary charge...$ 0.23 (3) $ 0.51(4) $ 0.52(4)
Net income (loss) per
common share........... (0.25)(3) 0.51(4) 0.52(4)
Weighted average number
of shares of common
stock outstanding...... 9,599,520 15,944,455 17,954,355
</TABLE>

<TABLE>
<CAPTION>
MARCH 30, 1996
------------------------------------------
PRO FORMA
ACTUAL PRO FORMA(5) AS ADJUSTED(6)
-------- ------------ --------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital................................................................. $116,464 $119,465 $126,848
Total assets.................................................................... 411,041 438,429 441,244
Long-term debt, excluding current maturities.................................... 160,467 170,076 106,499
Stockholders' equity............................................................ 113,248 115,599 186,559
</TABLE>

- ---------------
(1) 53-week fiscal year.

(2) The pro forma Statement of Operations Data assume the Valley Acquisition is
consummated on the first day of each period indicated. See "Unaudited Pro
Forma Condensed Combined Financial Statements."

(3) Reflects a reduction in net income of $0.7 million resulting from a one-time
non-cash stock compensation charge, as follows: $0.06 per common share for
the fiscal year ended July 1, 1995, actual and pro forma, and $0.07 per
common share for the nine months ended April 1, 1995.

(4) Reflects a reduction in net income of $0.9 million resulting from the
nonrecurring charge, as follows: $0.06 per common share for the actual nine
months ended March 30, 1996, and $0.05 per common share for the pro forma
nine months ended March 30, 1996.

(5) The pro forma Balance Sheet Data assume the Valley Acquisition is
consummated on March 30, 1996. See "Unaudited Pro Forma Condensed Combined
Financial Statements."

(6) Gives effect to the pro forma adjustments for the Valley Acquisition and the
receipt and application of the estimated net proceeds of the Offering as
described under "Use of Proceeds."

7
<PAGE> 10

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 (including the
Valley Acquisition), 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.
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

As of March 30, 1996, approximately 940 employees, representing
approximately 36% of the Company's full-time employees and approximately 75% of
the employees employed in the Company's warehouse and distribution operations,
were members of ten different local unions associated with the International
Brotherhood of Teamsters. Although the Company has not experienced any labor
disputes or work stoppages and believes that its relations with its employees
are satisfactory, a work stoppage could have a material adverse effect on the
Company. See "Business -- Employees."

8
<PAGE> 11

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."

POTENTIAL INFLUENCE BY AND RELATIONSHIP WITH CERTAIN STOCKHOLDERS

After the Offering, Sara Lee Corporation ("Sara Lee") will beneficially own
approximately 27.0% of the outstanding Common Stock. To the extent that Sara Lee
exercises its voting and investment rights in concert with other stockholders,
Sara Lee and such other stockholders may be able to exercise control over the
Company's business by virtue of their voting power with respect to the election
of directors and actions requiring stockholder approval. The Sara Lee Foundation
will beneficially own approximately 5.3% of the outstanding Common Stock after
the Offering. See "Principal Stockholders." The Company and Sara Lee engage in a
material amount of transactions in the ordinary course of their businesses. See
Note 10 to the Company's Consolidated Financial Statements.

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 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. See the Company's Current Report
on Form 8-K for the reportable event dated February 19, 1996 incorporated herein
by reference.

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 (including the Valley Acquisition), 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. There will be
19,025,929 outstanding shares of Common Stock upon completion of the Offering
(excluding 2,009,900 shares issuable upon consummation of the Valley
Acquisition). All of the 3,000,000 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

9
<PAGE> 12

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 remaining outstanding shares, 6,867,475 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, each of its executive officers and directors set forth under
the section "Management" in this Prospectus and certain other management
stockholders have agreed that, for a period of 90 days after the date of this
Prospectus, and Sara Lee and the Sara Lee Foundation have agreed that, until
November 15, 1996, 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 pursuant to the Company's stock option plans) in the public market.
Such consent permitting shares to be sold before the expiration of such periods
(collectively, 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, 6,677,950 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."

The Company has filed a Registration Statement on Form S-4 with the
Securities and Exchange Commission to register 2,009,900 shares of Common Stock
(subject to adjustment) issuable in connection with the Valley Acquisition. See
"Prospectus Summary -- Recent Acquisitions." Up to 190,259 of such shares upon
consummation of the Valley Acquisition, and the remainder of such shares after
publication of the results of at least 30 days of combined operations of the
Company and Valley Foods, will be eligible for sale in the public market subject
to compliance with certain requirements of Rule 144.

The Company has granted certain registration rights with respect to the
5,138,210 shares of Common Stock beneficially owned by Sara Lee and the
1,000,000 shares beneficially owned by the Sara Lee Foundation. Sara Lee and the
Sara Lee Foundation are entitled to require the Company to register the sale of
their shares on up to four occasions under the Securities Act. 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, Sara
Lee, the Sara Lee Foundation, certain management stockholders and (upon
consummation of the Valley Acquisition) the current stockholders of Valley Foods
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, 6,739,408 shares of Common Stock (excluding shares issuable upon
consummation of the Valley Acquisition), or 35.4% 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 restricted by the terms of the Senior Notes and 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

10
<PAGE> 13

number of factors, including those identified under this "Risk Factors" section
and elsewhere in this Prospectus. See "Prospectus Summary," "Use of Proceeds,"
"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.

USE OF PROCEEDS

The net proceeds to the Company from the Offering are estimated to be
$ million ($ million if the Underwriters exercise their over-allotment
option in full), after deducting underwriting discounts and commissions and
other expenses payable by the Company. The Company intends to use a portion of
the net proceeds from the Offering to repay in full all of its outstanding
indebtedness under the Bank Facility, estimated to be approximately $11 million
at August 15, 1996. The Bank Facility is a revolving credit facility which
expires in November 1999 and bears interest at LIBOR plus 50 basis points. See
Note 15 to the Company's Consolidated Financial Statements.

Approximately $20 million of the net proceeds will be used to repay
indebtedness of Valley Foods to be assumed by the Company upon consummation of
the Valley Acquisition. The indebtedness to be repaid consists of (i) a secured
revolving credit loan which expires on May 31, 1998 and bears interest at
varying floating rates (averaging 7.6% annually) and (ii) secured and unsecured
notes payable maturing at various dates from 1997 to 2009 and bearing interest
at annual rates from 6.0% to 11.5%.

The balance of the net proceeds will be used for working capital and
general corporate purposes, including approximately $24 million for expansion of
the Company's facilities and other capital expenditures, payment of fees
incurred in connection with the Valley Acquisition, and funding of potential
acquisitions. Pursuant to its strategy of supplementing internal expansion with
a program of acquisitions, the Company is continuously engaged in discussions or
negotiations with respect to prospective acquisitions.

Pending application of the net proceeds of the Offering as described above,
the Company intends to invest the net proceeds in short-term, interest-bearing
investment grade securities.

11
<PAGE> 14

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 1/4 9 1/4
Fourth quarter.............................................. 14 3/8 10 3/4
1996
First quarter............................................... $ 18 $12 3/4
Second quarter.............................................. 19 3/4 15 1/4
Third quarter............................................... 22 3/4 18
Fourth quarter (through June 28, 1996)...................... 25 18
</TABLE>

On June 28, 1996, the closing sale price of the Common Stock as reported on
the Nasdaq National Market was $25 per share. There were approximately 950
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
Senior Notes were issued and the agreement for the Bank Facility contain
provisions restricting the Company's ability to pay cash dividends on the Common
Stock.

12
<PAGE> 15

CAPITALIZATION

The following table sets forth, as of March 30, 1996, (i) the actual
capitalization of the Company, (ii) the pro forma capitalization of the Company
after giving effect to the Valley Acquisition and (iii) such pro forma
capitalization of the Company as adjusted to give effect to the sale by the
Company of 3,000,000 shares of Common Stock in the Offering and the application
of the net proceeds therefrom. This table should be read in conjunction with
"Use of Proceeds" and "Unaudited Pro Forma Condensed Combined Financial
Statements."
<TABLE>
<CAPTION>
AS OF MARCH 30, 1996
-----------------------------------
PRO PRO FORMA
ACTUAL FORMA AS ADJUSTED
-------- -------- -----------
<S> <C> <C> <C>
(IN THOUSANDS)

<CAPTION>
<S> <C> <C> <C>
Short-term debt:
Current portion of obligations under capital leases..... $ 5,513 $ 5,759 $ 5,759
Current portion of long-term debt....................... -- 4,568 --
-------- -------- -----------
Total short-term debt.............................. $ 5,513 $ 10,327 $ 5,759
======== ======== =========
Long-term debt:
Bank Facility(1)........................................ $ 54,500 $ 54,500 $ --
Senior Notes............................................ 85,000 85,000 85,000
Mortgage notes.......................................... -- 6,938 --
Related party indebtedness.............................. -- 2,139 --
Offset Notes(2)......................................... 4,050 4,050 4,050
Obligations under capital leases........................ 16,917 17,449 17,449
-------- -------- -----------
Total long-term debt............................... 160,467 170,076 106,499
-------- -------- -----------
Stockholders' equity (3):
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; 16,025,014 shares issued and outstanding;
18,034,914 shares issued and outstanding, pro forma;
21,034,914 shares issued and outstanding, pro forma
as adjusted........................................... 160 180 210
Additional paid-in capital.............................. 189,425 190,556 261,486
Accumulated deficit..................................... (31,394) (30,194) (30,194)
Distribution in excess of net book value of continuing
stockholder's interest(4)............................. (44,943) (44,943) (44,943)
-------- -------- -----------
Total stockholders' equity......................... 113,248 115,599 186,559
-------- -------- -----------
Total capitalization............................... $273,715 $285,675 $ 293,058
======== ======== =========
</TABLE>

- ---------------
(1) Subsequent to March 30, 1996, the Company repaid $49.3 million of
outstanding borrowings under the Bank Facility with the proceeds from the
Company's trade receivables securitization program. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

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

(3) Does not include 461,504 shares of Common Stock subject to stock options
granted by the Company under its stock option plans as of June 28, 1996.

(4) See Note 4 to the Company's Consolidated Financial Statements.

13
<PAGE> 16

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined financial statements
relate to the Valley Acquisition, pursuant to which the Company will acquire a
foodservice distribution business conducting operations from Las Vegas, Nevada
in consideration for the assumption by the Company of certain liabilities of the
acquired business and the issuance by the Company of its Common Stock. See
"Prospectus Summary -- Recent Acquisitions." The Valley Acquisition has two
components: (i) the merger of Valley Industries, Inc., a Nevada corporation
("Industries"), with and into JP Foodservice Distributors, Inc., a Delaware
corporation and wholly owned subsidiary of JP Foodservice, Inc., and (ii) the
acquisition of all of the assets and assumption of all of the liabilities by the
Company of "Z" Leasing Co., a Nevada general partnership affiliated with
Industries. Industries, its wholly owned subsidiary E&H Distributing Co., Inc.,
a Nevada corporation doing business as Valley Food Distributors of Nevada, and
"Z" Leasing Co. are collectively referred to as "Valley Foods."

The following unaudited pro forma condensed combined financial statements
assume a business combination between the Company and Valley Foods accounted for
as a pooling of interests. The unaudited pro forma condensed combined statements
of income combine the historical condensed consolidated statements of operations
of the Company for the fiscal year ended July 1, 1995 and the unaudited
condensed consolidated statements of operations of the Company for the nine
months ended March 30, 1996 with the historical condensed consolidated
statements of income of Valley Foods for the year ended January 31, 1996 and the
unaudited condensed consolidated statements of income of Valley Foods for the
nine months ended March 31, 1996, respectively. The unaudited pro forma
condensed combined balance sheets combine the historical condensed consolidated
balance sheet of the Company as of March 30, 1996 with the historical condensed
consolidated balance sheet of Valley Foods as of March 31, 1996.

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 Valley Foods for each period (assuming for the purposes hereof that
Valley Foods constituted a single corporate entity), based on the respective
ownership percentages of the Company and Valley Foods in the combined entity
after the Valley Acquisition. The pro forma condensed combined balance sheet
reflects the issuance of 2,009,900 shares of Common Stock of the Company in
exchange for all shares of Valley Foods common stock outstanding at March 30,
1996 (assuming for the purposes hereof that Valley Foods constituted a single
corporate entity), based on the applicable exchange ratio.

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 Valley Acquisition had been consummated as
presented in the accompanying unaudited pro forma condensed combined financial
statements, nor is it necessarily indicative of future operating results.

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.
For historical consolidated statements of income and consolidated balance sheets
of Valley Foods, see the Company's Current Report on Form 8-K for the reportable
event dated July 1, 1996 incorporated herein by reference.

14
<PAGE> 17

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

<TABLE>
<CAPTION>
FISCAL YEAR ENDED JULY 1, 1995
--------------------------------------------
JP FOODSERVICE VALLEY FOODS PRO FORMA
-------------- ------------ ----------
<S> <C> <C> <C>
Net sales............................................ $1,108,253 $121,504 $1,229,757
Cost of sales........................................ 921,902 100,370 1,022,272
-------------- ------------ ----------
Gross profit......................................... 186,351 21,134 207,485
Operating expenses................................... 150,428 17,455 167,883
Amortization of intangible assets.................... 2,263 -- 2,263
Stock compensation charge............................ 709 -- 709
-------------- ------------ ----------
Income from operations............................... 32,951 3,679 36,630
-------------- ------------ ----------
Other (income) expenses
Interest expense................................ 20,419 1,271 21,690
Other expenses.................................. -- (27) (27)
-------------- ------------ ----------
Total other expenses................................. 20,419 1,244 21,663
-------------- ------------ ----------
Income before income taxes........................... 12,532 2,435 14,967
Provision for income taxes........................... (5,962) (845) (6,807)
-------------- ------------ ----------
Net income before extraordinary charge............... 6,570 1,590 8,160
Extraordinary charge on early extinguishment of
debt............................................... (4,590) -- (4,590)
-------------- ------------ ----------
Net income........................................... 1,980 1,590 3,570
Preference dividend.................................. (40) -- (40)
-------------- ------------ ----------
Net income applicable to common stockholders......... $ 1,940 $ 1,590 $ 3,530
=========== ========= =========
Net income per common share:
Before extraordinary item....................... $ 0.59(1) $ 0.65(1)
Extraordinary item.............................. (0.42) (0.37)
-------------- ----------
Net income........................................... $ 0.17(1) $ 0.28(1)
=========== =========
</TABLE>

- ---------------
(1) Reflects a reduction in net income of $0.7 million resulting from the
one-time non-cash stock compensation charge, as follows: $0.06 per common
share for the fiscal year ended July 1, 1995, actual and pro forma.

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

15
<PAGE> 18

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

<TABLE>
<CAPTION>
NINE MONTHS ENDED MARCH 30, 1996
--------------------------------------------
JP FOODSERVICE VALLEY FOODS PRO FORMA
-------------- ------------ ----------
<S> <C> <C> <C>
Net sales............................................ $908,905 $ 94,647 $1,003,552
Cost of sales........................................ 752,675 78,147 830,822
-------------- ------------ ----------
Gross profit......................................... 156,230 16,500 172,730
Operating expenses................................... 128,893 13,459 142,352
Amortization of intangible assets.................... 1,741 -- 1,741
-------------- ------------ ----------
Income from operations............................... 25,596 3,041 28,637
-------------- ------------ ----------
Other (income) expenses
Interest expense................................ 9,913 949 10,862
Nonrecurring charge............................. 1,517 -- 1,517
Other expenses.................................. -- (37) (37)
-------------- ------------ ----------
Total other expenses................................. 11,430 912 12,342
-------------- ------------ ----------
Income before income taxes........................... 14,166 2,129 16,295
Provision for income taxes........................... (6,097) (926) (7,023)
-------------- ------------ ----------
Net income applicable to common stockholders......... $ 8,069 $ 1,203 $ 9,272
=========== ========= =========
Net income per common share.......................... $ 0.51(1) $ 0.52(1)
=========== =========
</TABLE>

- ---------------
(1) Reflects a reduction in net income of $0.9 million resulting from the
nonrecurring charge, as follows: $0.06 per common share for the actual nine
months ended March 30, 1996, and $0.05 per common share for the pro forma
nine months ended March 30, 1996.

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

16
<PAGE> 19

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS
(IN THOUSANDS)

<TABLE>
<CAPTION>
MARCH 30, 1996
-------------------------------------------
JP FOODSERVICE VALLEY FOODS PRO FORMA
-------------- ------------ ---------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents............................ $ 7,960 $ 454 $ 8,414
Receivables, net of allowance........................ 141,784 11,612 153,396
Inventories.......................................... 81,071 5,720 86,791
Current deferred tax asset........................... 540 -- 540
Other current assets................................. 10,637 516 11,153
-------------- ------------ ---------
Total current assets............................ 241,992 18,302 260,294
-------------- ------------ ---------
Property and equipment, net............................... 91,625 8,543 100,168
Goodwill and other intangible assets, net................. 77,424 -- 77,424
Other noncurrent assets................................... -- 543 543
-------------- ------------ ---------
Total noncurrent assets......................... 169,049 9,086 178,135
-------------- ------------ ---------
Total assets.................................... $411,041 $ 27,388 $ 438,429
=========== ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of senior debt.................... $ -- $ 768 $ 768
Revolving bank line of credit........................ -- 3,800 3,800
Current obligations under capital leases............. 5,513 246 5,759
Accounts payable..................................... 108,769 8,992 117,761
Accrued expenses..................................... 11,246 1,495 12,741
-------------- ------------ ---------
Total current liabilities....................... 125,528 15,301 140,829
-------------- ------------ ---------
Noncurrent liabilities
Senior debt.......................................... 139,500 6,938 146,438
Subordinated debt with related parties............... 4,050 2,139 6,189
Obligations under capital leases..................... 16,917 532 17,449
Noncurrent deferred tax liability.................... 11,798 127 11,925
-------------- ------------ ---------
Total noncurrent liabilities.................... 172,265 9,736 182,001
-------------- ------------ ---------
Total liabilities............................... 297,793 25,037 322,830
-------------- ------------ ---------
Stockholders' equity
Common stock......................................... 160 20 180
Paid-in-capital...................................... 189,425 1,131 190,556
Accumulated deficit.................................. (31,394) 1,200 (30,194)
Distribution in excess of book value of continuing
stockholder's interest............................. (44,943) -- (44,943)
-------------- ------------ ---------
Total stockholders' equity...................... 113,248 2,351 115,599
-------------- ------------ ---------
Total liabilities and stockholders' equity................ $411,041 $ 27,388 $ 438,429
=========== ========= ========
</TABLE>

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

17
<PAGE> 20

NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS

NOTE 1 -- In order to conform Valley Foods' year-end to the Company's
fiscal year-end, the unaudited pro forma condensed combined statement of income
for the nine months ended March 30, 1996 includes seven months (July 1995
through January 1996) for Valley Foods which are also included in the unaudited
pro forma condensed combined statement of income for the year ended January 31,
1996. Accordingly, an adjustment has been made in the nine months ended March
30, 1996 to retained earnings for the duplication of net income of $1.1 million
for such seven-month period. Other results of operations for such seven-month
period of Valley Foods include net sales of $73.1 million, income before taxes
of $0.6 million, and income tax benefits of $1.7 million. The unaudited pro
forma condensed combined financial data for the nine months ended March 30, 1996
combined the Company's financial statements for the nine months ended March 30,
1996 with the financial statements of Valley Foods for the nine months ended
March 30, 1996.

NOTE 2 -- The additional unaudited pro forma condensed combined financial
data are based upon historical combined income before taxes, adjusted to reflect
a provision for income taxes as if Valley Foods and its combining companies had
all been "C" corporations under the Internal Revenue Code of 1986, as amended.

NOTE 3 -- Certain reclassifications, none of which is material, have been
made to the financial statements of Valley Foods in the unaudited pro forma
condensed combined financial statements to conform to classifications of the
Company. There are no other material adjustments required to the historical
financial statements of the Company and Valley Foods to arrive at the unaudited
pro forma condensed combined balance sheets and statements of income.

NOTE 4 -- Total costs to be incurred by the Company and Valley Foods in
connection with the Valley Acquisition are estimated to be approximately $5.5
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.

18
<PAGE> 21

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 July 1, 1995 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 historical
consolidated financial data at April 1, 1995 and March 30, 1996 and for the nine
months ended April 1, 1995 and March 30, 1996 presented below are unaudited, but
include all adjustments (consisting only of normal recurring entries) which
management believes to be necessary for the fair presentation of the financial
position, results of operations and cash flows of the Company at and for the
periods presented. The results of operations of the Company for the nine months
ended March 30, 1996 are not necessarily indicative of the results to be
expected for the full year. 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 Valley Acquisition. See "Unaudited Pro Forma Condensed
Combined Financial Statements."
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-------------------------------------------------------------
JULY 1, 1995
--------------------------
JULY 3, 1993(1) JULY 2, 1994 ACTUAL PRO FORMA(2)
--------------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.................... $ 1,025,854 $1,029,000 $1,108,253 $1,229,757
Gross profit................. 175,046 171,883 186,351 207,485
Amortization of intangible
assets..................... 2,266 2,265 2,263 2,263
Stock compensation charge.... -- -- 709 709
Income from operations....... 26,579 29,537 32,951 36,630
Interest expense............. 36,971 30,711 20,419 21,690
Nonrecurring charge.......... -- -- -- --
Income (loss) before income
taxes and extraordinary
charge..................... (10,392) (1,174) 12,532 14,967
Income (loss) before
extraordinary charge....... (7,596) (1,815) 6,570 8,160
Net income (loss)............ (7,596) (1,815) 1,980 3,570
Preference dividends......... (2,427) (504) (40) (40)
Net income (loss) applicable
to common stockholders..... (10,023) (2,319) 1,940 3,530
PER SHARE DATA:
Net income (loss) per common
share before extraordinary
charge..................... $ (2.55) $ (0.59) $ 0.59(3) $ 0.65(3)
Net income (loss) per common
share...................... (2.55) (0.59) 0.17(3) 0.28(3)
Weighted average number of
shares of common stock
outstanding................ 3,932,748 3,932,748 11,122,343 12,607,143

<CAPTION>
NINE MONTHS ENDED
-----------------------------------------
MARCH 30, 1996
APRIL 1, --------------------------
1995 ACTUAL PRO FORMA(2)
----------- ---------- ------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales....................$ 810,804 $ 908,905 $1,003,552
Gross profit................. 135,397 156,230 172,730
Amortization of intangible
assets..................... 1,697 1,741 1,741
Stock compensation charge.... 709 -- --
Income from operations....... 22,083 25,596 28,637
Interest expense............. 16,933 9,913 10,862
Nonrecurring charge.......... -- 1,517 1,517
Income (loss) before income
taxes and extraordinary
charge..................... 5,150 14,166 16,295
Income (loss) before
extraordinary charge....... 2,197 8,069 9,272
Net income (loss)............ (2,393 ) 8,069 9,272
Preference dividends......... (40 ) -- --
Net income (loss) applicable
to common stockholders..... (2,433 ) 8,069 9,272
PER SHARE DATA:
Net income (loss) per common
share before extraordinary
charge.....................$ 0.23 (3) $ 0.51(4) $ 0.52(4)
Net income (loss) per common
share...................... (0.25)(3) 0.51(4) 0.52(4)
Weighted average number of
shares of common stock
outstanding................ 9,599,520 15,944,455 17,954,355
</TABLE>

<TABLE>
<CAPTION>
MARCH 30, 1996
------------------------------------------
PRO FORMA
ACTUAL PRO FORMA(5) AS ADJUSTED(6)
-------- ------------ --------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital..................................................................... $116,464 $119,465 $126,848
Total assets........................................................................ 411,041 438,429 441,244
Long-term debt, excluding current maturities........................................ 160,467 170,076 106,499
Stockholders' equity................................................................ 113,248 115,599 186,559
</TABLE>

- ---------------
(1) 53-week fiscal year.

(3) Reflects a reduction in net income of $0.7 million resulting from the
one-time non-cash stock compensation charge, as follows: $0.06 per common
share for the fiscal year ended July 1, 1995, actual and pro forma, and
$0.07 per common share for the nine months ended April 1, 1995.

(5) The pro forma Balance Sheet Data assume the Valley Acquisition is
consummated on March 30, 1996. See "Unaudited Pro Forma Condensed Combined
Financial Statements."

(6) Gives effect to the pro forma adjustments for the Valley Acquisition and the
receipt and application of the estimated net proceeds of the Offering as
described under "Use of Proceeds."

19
<PAGE> 22

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

GENERAL

Overview. In recent years, the Company's net sales have increased
predominantly as a result of internal expansion through continued growth in
street account and chain account sales. 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 and the second quarter of fiscal
1996. 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.

During this period, the balance sheet improved as a result of enhanced
management of inventory and accounts payable and consummation of a
recapitalization in the second quarter of fiscal 1995 that included the
Company's initial public offering of Common Stock (the "Recapitalization"). The
Recapitalization enabled the Company to reduce its overall indebtedness by
$123.7 million and the effective annual interest rate on such indebtedness to
7.6% in fiscal 1995 from 10.4% prior to the Recapitalization. See Note 6 to the
Company's Consolidated Financial Statements.

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 1995 and 1994 each consisted of 52 weeks, while fiscal 1993 was a 53-week
year.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain income
and expense items expressed as a percentage of net sales.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED NINE MONTHS ENDED
---------------------------- -------------------------------
JULY 2, 1994 JULY 1, 1995 APRIL 1, 1995 MARCH 30, 1996
------------ ------------ ------------- --------------
<S> <C> <C> <C> <C>
Net sales............................. 100.00% 100.00% 100.00% 100.00%
Cost of sales......................... 83.30 83.19 83.30 82.81
------------ ------------ ------------- -------
Gross profit.......................... 16.70 16.81 16.70 17.19
Operating expenses.................... 13.61 13.57 13.68 14.18
Amortization of intangible assets..... 0.22 0.20 0.21 0.19
Stock compensation charge............. -- 0.06 0.09 --
------------ ------------ ------------- -------
Income from operations................ 2.87 2.98 2.72 2.82
Interest expense...................... 2.98 1.84 2.09 1.09
Nonrecurring charge................... -- -- -- 0.17
------------ ------------ ------------- -------
Income (loss) before taxes and
extraordinary charge................ (0.11) 1.14 0.63 1.56
Income taxes.......................... (0.06) (0.54) (0.36) (0.67)
------------ ------------ ------------- -------
Income (loss) before extraordinary
charge.............................. (0.17) 0.60 0.27 0.89
Extraordinary charge on early
extinguishment of debt.............. -- (0.41) (0.57) --
------------ ------------ ------------- -------
Net income (loss)..................... (0.17)% 0.19% (0.30)% 0.89%
========= ========= ========= ===========
</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

20
<PAGE> 23

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 0.5%, 0.7% and 1.4% in fiscal 1995, 1994
and 1993, 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.

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

NINE MONTHS ENDED MARCH 30, 1996 COMPARED TO NINE MONTHS ENDED APRIL 1, 1995

Net Sales. The Company's net sales increased 12.1% to $908.9 million for
the nine months ended March 30, 1996 (the "1996 fiscal period") from the $810.8
million net sales level achieved for the nine months ended April 1, 1995 (the
"1995 fiscal period"). Sales generated by foodservice businesses acquired by the
Company in the last quarter of fiscal 1995 and the second quarter of fiscal 1996
contributed 2.0% to this increase. The increase in net sales in the 1996 fiscal
period was attributable to strong growth in both chain account sales and street
sales. Chain account sales increased 16.1% in the 1996 fiscal period. The
increase in chain account sales reflected the continued growth in sales to the
Company's larger customers and the development of new chain account
relationships. As a percentage of net sales, chain account sales increased to
46.7% in the 1996 fiscal period from 45.0% in the 1995 fiscal period. Street
sales increased 8.8% in the 1996 fiscal period over the prior corresponding
period. The street sales growth resulted principally from the growth of the
street sales force, improved sales force productivity and the implementation of
new street sales promotion programs.

Gross Profit. The Company's gross profit margin increased to 17.2% in the
1996 fiscal period from 16.7% in the prior corresponding period. The increase
was primarily attributable to higher sales of the Company's private and
signature brand products, which increased to 22.3% of street sales at the end of
the 1996 fiscal period from 15.8% of street sales at the end of the 1995 fiscal
period. The increase in gross profit margin was also attributable to income
resulting from promotional programs, including promotional income from vendors
in support of the Company's private brand program.

Operating Expenses. Operating expenses increased 16.2% to $128.9 million
in the 1996 fiscal period from $110.9 million in the 1995 fiscal period. As a
percentage of net sales, operating expenses increased to 14.2% from 13.7% in the
1995 fiscal period. The increase in operating expenses, as a percentage of net
sales in the 1996 fiscal period, resulted primarily from increased costs
incurred in connection with the promotion of the Company's private and signature
brand products and costs associated with the adverse winter weather conditions
experienced in a majority of the Company's markets in the third quarter of
fiscal 1996.

Income from Operations. Income from operations (after amortization charges
of $1.7 million) increased 15.9% to $25.6 million in the 1996 fiscal period from
$22.1 million in the prior corresponding period. The increase was attributable
to increased sales volume and related gross profit, and to the absence of any
charge corresponding to the one-time stock compensation charge of $0.7 million
recorded in the 1995 fiscal period. Operating margin increased to 2.8% in the
1996 fiscal period from 2.7% in the 1995 fiscal period.

Interest Expense. Interest expense for the 1996 fiscal period decreased
41.5% to $9.9 million in 1996 from $16.9 million in 1995. The decrease was
primarily attributable to the repayment or refinancing of substantially all of
the Company's indebtedness in connection with the Recapitalization.

21
<PAGE> 24

Nonrecurring Charge. On February 19, 1996, the Company terminated
discussions with Sara Lee regarding a proposed combination of the Company and
Sara Lee'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 in November 1995, the Company wrote off the costs incurred related to the
transaction (primarily legal and advisory fees) of approximately $1.5 million.

Income Taxes. The provision for income tax for the 1996 fiscal period
increased $3.1 million over the provision for the 1995 fiscal period. The
increase in the provision was attributable to the Company's greater pretax
profit level in the 1996 fiscal period. The Company's effective tax rate (before
extraordinary charge) of 43.1% for the 1996 fiscal period decreased from the
effective rate of 57.3% for the 1995 fiscal period primarily because of the
effect on the 1995 fiscal period of the non-deductible stock compensation charge
of $0.7 million.

Extraordinary Charge. The Company incurred no extraordinary charge in the
1996 fiscal period. In the 1995 fiscal period, 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 increase of 9.3% in
chain account sales in fiscal 1995 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% in fiscal 1995 from 44% 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 by 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 proprietary products. The increase in sales of proprietary 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 , 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. See Note 7 to the
Company's Consolidated Financial Statements.

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.

22
<PAGE> 25

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 ($4.9) million, $11.3 million
and $40.6 million in the nine months ended March 30, 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 decrease in the nine months ended March
30, 1996 was primarily attributable to a change in the scheduled receipt date
from a major customer (which increased the month-end accounts receivable balance
by approximately $8.0 million), temporary seasonal inventory increases and
increased working capital requirements associated with the Company's accelerated
sales growth.

The Company's working capital requirement generally averages between 9% and
10% of annual sales. The Company's working capital balance at March 30, 1996 was
$116.5 million.

As of March 30, 1996, the Company's long-term indebtedness, including
current portion, was $166.0 million, with an overall weighted average interest
rate of 7.7% (excluding deferred financing costs and costs of interest rate
swaps and interest cap arrangements). As of the same date, $54.5 million of
borrowings and $11.5 million of letters of credit were outstanding under the
Bank Facility and an additional $44.0 million remained available to finance the
Company's working capital requirements.

Subsequent to March 30, 1996, the Company strengthened its liquidity
position by applying $49.3 million in proceeds from the securitization and sale
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 32 basis points.
The application of such proceeds has enabled the Company to reduce its working
capital investment and 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 currently expects to assume approximately $20 million of
indebtedness of Valley Foods upon consummation of the Valley Acquisition. A
portion of the net proceeds of the Offering will be used to repay such
indebtedness. See "Use of Proceeds."

The Company made capital expenditures of $16.9 million in the nine months
ended March 30, 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. 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. A
portion of the net proceeds of the Offering will be used for such capital
expenditures. See "Use of Proceeds."

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 Offering will be 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.

23
<PAGE> 26

QUARTERLY RESULTS AND SEASONALITY

The Company's operating results historically 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 periods indicated.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED JULY 2, 1994
--------------------------------------------------------
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales................................. $ 263,944 $ 250,723 $ 239,543 $ 274,790
Income from operations.................... 7,011 7,471 4,752 10,303
Operating margin.......................... 2.7% 3.0% 2.0% 3.7%
</TABLE>

<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>
NINE MONTHS ENDED MARCH 30, 1996
--------------------------------------------------------
1ST QUARTER 2ND QUARTER 3RD QUARTER
----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales................................. $ 310,760 $ 302,342 $ 295,803
Income from operations.................... 9,242 8,909 7,445
Operating margin.......................... 3.0% 2.9% 2.5%
</TABLE>

24
<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

25
<PAGE> 28

anticipated to generate additional sales volume for broadline distributors that
can satisfy the product and delivery requirements of this customer segment.

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 currently account for approximately 83% of net
sales. 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 1995, 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 nine 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,

26
<PAGE> 29

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 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.

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 6.2% in fiscal 1995 and 8.8% in the nine
months ended March 30, 1996 over the prior corresponding periods.

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

27
<PAGE> 30

their sales volume. Sales of the Company's proprietary brands are expected to
account 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 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 are expected to
amount 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 introduce a full
line of Oriental-style products under its Beijing Chef( TM) signature brand and
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 fourth quarter of fiscal 1996, the Company entered into a definitive
agreement to acquire 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."
For additional information regarding the Valley Acquisition, see the

28
<PAGE> 31

Company's Registration Statement on Form S-4 filed with the Securities and
Exchange Commission and incorporated herein by reference.

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 approximately
28,000 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
NINE MONTHS
FISCAL YEAR ENDED ENDED
-------------------------------------------- --------------
JULY 3, 1993 JULY 2, 1994 JULY 1, 1995 MARCH 30, 1996
------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Canned and dry products....................... 27% 27% 27% 26%
Meats......................................... 20 20 20 20
Other frozen foods............................ 17 18 18 18
Poultry....................................... 9 9 9 10
Seafood....................................... 8 8 8 8
Dairy products................................ 8 7 8 8
Perishable food products...................... 4 4 4 3
Paper products................................ 3 4 4 5
Equipment and supplies........................ 2 2 1 1
Janitorial supplies........................... 2 1 1 1
--- --- --- ---
Total net sales............................... 100% 100% 100% 100%
========= ========= ========= ===========
</TABLE>

National Brands. The Company supplies more than 26,000 national brand
items, which currently account for approximately 83% of the Company's net sales.
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 1,000 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 50 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.

29
<PAGE> 32

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 1997, Beijing Chef (TM) (Oriental-style products) and Harbor Banks(TM)
(seafood products). The Company currently offers more than 1,000 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 23,000 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.

30
<PAGE> 33

The following table sets forth the segments of the Company's customer base by
type of institution for the nine months ended March 30, 1996.

<TABLE>
<CAPTION>
PERCENTAGE
TYPE OF CUSTOMER OF NET SALES
------------------------------------------------------------------------- ------------
<S> <C>
Restaurants.............................................................. 70%
Limited menu establishments.............................................. 12
Hotels................................................................... 2
Healthcare institutions.................................................. 5
Schools and colleges..................................................... 3
Other.................................................................... 8
---
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 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 the nine months ended March 30, 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 the nine months ended March 30, 1996.

No single customer accounts for 10% or more of the Company's net sales.
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 are 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.

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<PAGE> 34

The Company maintains sales offices at each of its nine 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 nine full-service
distribution centers located in Massachusetts, Connecticut, Pennsylvania,
Maryland, Minnesota, Indiana, Illinois and Iowa. 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.

The nine full-service distribution centers have a total of approximately
1.3 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
over 570 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

32
<PAGE> 35

redistribution facility, where the loads are then transferred to smaller
equipment for delivery in the normal fashion.

SUPPLIERS

JP Foodservice employs 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.

The Company maintains a comprehensive quality control and assurance program
that actively involves 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.

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<PAGE> 36

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 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 nine full-service distribution centers, which
contain a total of 1.3 million square feet of warehouse space. The centers
contain dry, refrigerated and frozen storage areas and office space

34
<PAGE> 37

for the sales and administrative operations of the branch. The following chart
provides information on the approximate size of each of the Company's
distribution centers.

<TABLE>
<CAPTION>
AREA IN
LOCATION SQUARE FEET
------------------------------------------------------------------------- -----------
<S> <C>
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
-----------
Total............................................................... 1,299,000
=========
</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 over 570 vehicles, consisting of
tractors, trailers and straight trucks, which are used for long hauls and local
deliveries. At March 30, 1996, the Company owned approximately 5% of these
vehicles and leased the remainder. See Note 16 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 the nine months ended March 30, 1996, the Company spent a total
of $24.2 million on capital expenditures, primarily for new trucks and trailers
and expansion of its distribution centers in Streator, Illinois and Boston. The
Company will undertake expansion or replacement of its facilities as and when
needed to accommodate the Company's growth. The Company is currently expanding
its Allentown, Pennsylvania distribution center, with completion expected in
October 1996. Facility expansion costs are expected to total approximately $7
million in fiscal 1997. A portion of the net proceeds of the Offering will be
used for facility expansion and other capital expenditures. See "Use of
Proceeds."

EMPLOYEES

At March 30, 1996, JP Foodservice had approximately 2,600 full-time
employees, of whom approximately 120 were employed in corporate management and
administration and approximately 1,350 of whom were hourly employees.
Approximately 940 of the Company's employees were covered by collective
bargaining contracts with ten different local unions which are associated with
the International Brotherhood of Teamsters. Five collective bargaining
contracts, which cover approximately 325 employees, will expire during fiscal
1997. 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.

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<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......... 40 Director, Senior Vice President and Chief Financial
Officer
Mark P. Kaiser......... 39 Senior Vice President-Sales, Marketing and Procurement
George T. Megas........ 43 Vice President-Finance, Assistant Secretary and Assistant
Treasurer
David M. Abramson...... 43 Director
Michael J. Drabb....... 62 Director
Eric E. Glass.......... 56 Director
George A. Midwood...... 62 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.

Mark P. Kaiser has served as the Senior Vice President-Sales, Marketing and
Procurement of the Company since 1993. 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.

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

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

36
<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.

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.

Prior to June 27, 1996, Sara Lee had designated three members of the Board
of Directors of the Company pursuant to a Board Membership Agreement, dated as
of November 15, 1994, between Sara Lee and the Company, which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part. In
view of Sara Lee's active continuing involvement in the foodservice distribution
industry through its subsidiary PYA/Monarch, Sara Lee determined that continued
service by its designees on the Company's Board of Directors might raise the
possibility of a conflict of interest. Effective June 27, 1996, Sara Lee's
designees resigned from the Company's Board of Directors.

37
<PAGE> 40

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information, as of June 16, 1996,
regarding the beneficial ownership of the Common Stock by (i) each person known
to the Company to be the beneficial owner of more than 5% of the Common Stock,
(ii) each director of the Company, (iii) each executive officer of the Company
and (iv) all directors and executive officers of the Company as a group. Under
rules of the Securities and Exchange Commission, beneficial ownership of Common
Stock includes any shares as to which a person has the sole or shared voting
power or investment power and also any shares which a person has the right to
acquire within 60 days through the exercise of any stock option or other right.
Except as indicated, each person identified in the following table has the sole
voting and investment power with respect to the shares shown.

<TABLE>
<CAPTION>
PERCENT OF CLASS
AMOUNT AND NATURE --------------------
NAME OF OF BENEFICIAL BEFORE AFTER
BENEFICIAL OWNER OWNERSHIP(1) OFFERING OFFERING
- ------------------------------------------------------------ ----------------- -------- --------
<S> <C> <C> <C>
Sara Lee Corporation(2)..................................... 5,138,210 32.0% 27.0%
Three First National Plaza
Chicago, Illinois 60602
Sara Lee Foundation......................................... 1,000,000 6.2 5.3
Three First National Plaza
Chicago, Illinois 60602
T. Rowe Price Associates, Inc.(3)........................... 1,668,300 10.4 8.8
100 E. Pratt Street
Baltimore, Maryland 21202
David M. Abramson(4)(5)..................................... 6,250 * *
Michael J. Drabb(5)......................................... 2,750 * *
Eric E. Glass(5)............................................ 1,650 * *
Lewis Hay, III(5)(6)........................................ 84,156 * *
Mark P. Kaiser(5)........................................... 44,715 * *
George T. Megas(5).......................................... 14,262 * *
George A. Midwood(5)........................................ 6,326 * *
James L. Miller(5)(7)....................................... 217,025 1.4 1.1
All directors and executive officers as a group (8
persons).................................................. 377,134 2.4 2.0
</TABLE>

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

(1) The shares shown as beneficially owned include shares credited to
participant accounts in the Company's 401(k) retirement savings plan, which
are voted by the plan's trustees, as follows: Mr. Hay, 481; Mr. Kaiser, 459;
Mr. Megas, 417; and Mr. Miller, 10,780.

(2) Shares are held of record by Sara Lee Corporation's wholly owned subsidiary,
PYA/Monarch, Inc., which may be deemed to be the beneficial owner of such
shares.

(3) Shares shown are reported on a Schedule 13G dated June 10, 1996 filed with
the Securities and Exchange Commission. Voting power with respect to all but
202,900 shares is exercised by other persons.

(4) Includes 2,000 shares held by a family trust for the benefit of Mr.
Abramson's minor children, of which Mr. Abramson acts as the trustee and
with respect to which he exercises voting power and investment power. Except
to the extent of his pecuniary interest therein, Mr. Abramson disclaims
beneficial ownership of the 1,500 shares held by the Levan, Schimel, Belman
& Abramson, P.A. 401(k) Profit Sharing Plan & Trust.

(5) Includes shares which may be acquired within 60 days pursuant to outstanding
options by the person or persons listed, as follows: Mr. Abramson, 2,750;
Mr. Drabb, 2,750; Mr. Glass, 1,250; Mr. Hay, 14,057; Mr. Kaiser, 13,150; Mr.
Megas, 4,380; Mr. Midwood, 2,750; Mr. Miller, 33,128; and all directors and
executive officers as a group, 74,215.

(6) Includes 381 shares held by Mr. Hay's wife as a custodian for their minor
children. Mr. Hay disclaims any beneficial interest in such shares.

(7) Includes 1,028 shares owned by members of Mr. Miller's family. Mr. Miller
disclaims any beneficial interest in such shares.

38
<PAGE> 41

SHARES ELIGIBLE FOR FUTURE SALE

There will be 19,025,929 outstanding shares of Common Stock upon completion
of the Offering (excluding 2,009,900 shares issuable upon consummation of the
Valley Acquisition). All of the 3,000,000 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 remaining outstanding
shares, 6,867,475 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 190,259
shares after giving effect to the Offering) 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, each of its executive officers and directors set forth under
the section "Management" in this Prospectus and certain other management
stockholders have agreed that, for a period of 90 days after the date of this
Prospectus, and Sara Lee and the Sara Lee Foundation have agreed that, until
November 15, 1996, 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 pursuant to the Company's stock option 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. Upon
the expiration of the lock-up period, 6,677,950 shares will be eligible for sale
in the public market pursuant to Rule 144.

The Company has filed a Registration Statement on Form S-4 with the
Securities and Exchange Commission to register 2,009,900 shares of Common Stock
(subject to adjustment) issuable in connection with the Valley Acquisition. See
"Prospectus Summary -- Recent Acquisitions." Up to 190,259 of such shares upon
consummation of the Valley Acquisition, and the remainder of such shares, after
publication of the results of at least 30 days of combined operations of the
Company and Valley Foods, will be eligible for sale in the public market subject
to compliance with certain requirements of Rule 144.

The Company has granted registration rights with respect to the Common
Stock held by certain of its current stockholders. Following completion of the
Offering, 6,739,408 shares of Common Stock (excluding shares issuable upon
consummation of the Valley Acquisition), or 35.4% of the total number of shares
of Common Stock outstanding, will be entitled to the benefits of such
registration rights. See "Risk Factors -- Shares Eligible for Future Sale;
Registration Rights."

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.

39
<PAGE> 42

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., The Robinson-Humphrey Company, Inc.
and Rodman & Renshaw, Inc. are acting as the representatives (the
"Representatives"), has severally agreed to purchase, and the Company has agreed
to sell to each Underwriter, the number of shares of Common Stock set forth
opposite the name of such Underwriter below:

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
--------------------------------------------------------------------- ----------------
<S> <C>
Smith Barney Inc.....................................................
The Robinson-Humphrey Company, Inc...................................
Rodman & Renshaw, Inc................................................

----------------
3,000,000
=============
</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 Company that the Underwriters do not intend to confirm any shares to
any accounts over which they exercise discretionary authority.

The Company has granted to the Underwriters an option, exercisable for 30
days from the date of this Prospectus, to purchase up to 450,000 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, each of its officers and directors set forth under the section
"Management" in this Prospectus and certain other management stockholders have
agreed that, for a period of 90 days after the date of this Prospectus, and Sara
Lee and the Sara Lee Foundation have agreed that, until November 15, 1996, 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
pursuant to the Company's stock option 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.

40
<PAGE> 43

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 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 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
July 2, 1994 and for each of the three fiscal years in the period ended July 1,
1995 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
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
public accountants, and upon the authority of such firm as experts in accounting
and auditing.

ADDITIONAL 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.

41
<PAGE> 44

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.

42
<PAGE> 45

JP FOODSERVICE, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE(S)
-----------
<S> <C>
Report of Independent Accountants............................................... F-2
Consolidated Balance Sheets as of July 2, 1994 and July 1, 1995................. F-3
Consolidated Statements of Operations of the Company for the fiscal years ended
July 3, 1993, July 2, 1994 and July 1, 1995................................... F-4
Consolidated Statements of Stockholders' Equity (Deficit) for the fiscal years
ended
July 3, 1993, July 2, 1994 and July 1, 1995................................... F-5
Consolidated Statements of Cash Flows for the fiscal years ended July 3, 1993,
July 2, 1994 and July 1, 1995................................................. F-6
Notes to Consolidated Financial Statements...................................... F-7
Condensed Consolidated Balance Sheets as of July 1, 1995 and March 30, 1996..... F-21
Condensed Consolidated Statements of Operations for the nine months ended April
1, 1995 and March 30, 1996.................................................... F-22
Condensed Consolidated Statements of Cash Flows for the nine months ended April
1, 1995 and March 30, 1996.................................................... F-23
Notes to Condensed Consolidated Financial Statements............................ F-24
</TABLE>

F-1
<PAGE> 46

REPORT OF INDEPENDENT ACCOUNTANTS

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

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of stockholders' equity (deficit), and of
cash flows present fairly, in all material respects, the financial position of
JP Foodservice, Inc. and its subsidiaries at July 2, 1994 and July 1, 1995, and
the results of their operations and their cash flows for each of the fiscal
years ended July 3, 1993, July 2, 1994 and July 1, 1995, 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, 1995

F-2
<PAGE> 47

JP FOODSERVICE, INC.

CONSOLIDATED BALANCE SHEETS
($ IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
JULY 2, 1994 JULY 1, 1995
------------ ------------
<S> <C> <C>
Current assets
Cash and cash equivalents........................................ $ 11,298 $ 15,418
Receivables...................................................... 101,624 123,491
Inventories...................................................... 65,810 67,629
Current deferred tax asset....................................... 3,091 434
Other current assets............................................. 6,620 8,319
------------ ------------
Total current assets........................................ 188,443 215,291
------------ ------------
Property and equipment................................................ 82,201 81,153
------------ ------------
Goodwill and other noncurrent assets.................................. 79,445 76,594
------------ ------------
Total assets................................................ $350,089 $373,038
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Current maturities of senior debt................................ $ 3,000
Current obligations under capital leases......................... 4,955 $ 4,092
Accounts payable
Trade....................................................... 76,180 91,559
Related parties............................................. 5,816 5,060
Accrued expenses................................................. 10,676 10,857
------------ ------------
Total current liabilities................................... 100,627 111,568
------------ ------------
Noncurrent liabilities
Senior debt...................................................... 129,621 130,000
Subordinated debt with related parties........................... 121,609 4,000
Obligations under capital leases................................. 13,030 12,557
Noncurrent deferred tax liability................................ 12,225 11,542
------------ ------------
276,485 158,099
------------ ------------
Total liabilities........................................... 377,112 269,667
------------ ------------
Commitments and contingent liabilities (Notes 15, 16 and 21)
Mandatorily redeemable stock (related parties)........................ 2,388
------------
Stockholders' equity (deficit)
Preferred stock, 5,000,000 shares authorized, none issued
Common stock
Voting, $.01 par value, 7,080,864 and 45,000,000 shares
authorized, 3,192,096 and 15,920,434 issued and
outstanding............................................... 32 159
Paid-in-capital.................................................. 56,903 187,618
Accumulated deficit.............................................. (41,403) (39,463)
Distribution in excess of net book value of continuing
stockholder's interest.......................................... (44,943) (44,943)
------------ ------------
Total stockholders' equity (deficit)........................ (29,411) 103,371
------------ ------------
Total liabilities and stockholders' equity (deficit).................. $350,089 $373,038
========= =========
</TABLE>

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

F-3
<PAGE> 48

JP FOODSERVICE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
($ IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------------------------
(UNAUDITED)
PRO FORMA
JULY 3, 1993 JULY 2, 1994 JULY 1, 1995 JULY 1, 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales..................................... $ 1,025,854 $ 1,029,000 $ 1,108,253 $ 1,108,253
Cost of sales................................. 850,808 857,117 921,902 921,902
------------ ------------ ------------ ------------
Gross profit.................................. 175,046 171,883 186,351 186,351
Operating expenses............................ 146,201 140,081 150,428 150,428
Amortization of intangible assets............. 2,266 2,265 2,263 2,263
Stock compensation charge..................... 709 709
------------ ------------ ------------ ------------
Income from operations........................ 26,579 29,537 32,951 32,951
------------ ------------ ------------ ------------
Interest expense
Borrowings............................... 16,733 14,731 13,901 12,316
Borrowings-related parties............... 19,109 14,851 5,879 602
Amortization of loan acquisition costs... 1,129 1,129 639 639
------------ ------------ ------------ ------------
36,971 30,711 20,419 13,557
------------ ------------ ------------ ------------
Income (loss) before income taxes and
extraordinary charge........................ (10,392) (1,174) 12,532 19,394
Recovery of (provision for) income taxes...... 2,796 (641) (5,962) (8,707)
------------ ------------ ------------ ------------
Income (loss) before extraordinary charge..... (7,596) (1,815) 6,570 10,687
Extraordinary charge on early extinguishment
of debt (net of $3,059 of taxes)............ (4,590) (4,590)
------------ ------------ ------------ ------------
Net income (loss)............................. (7,596) (1,815) 1,980 6,097
Preference dividends.......................... (2,427) (504) (40)
------------ ------------ ------------ ------------
Net income (loss) applicable to common
stockholders................................ $ (10,023) $ (2,319) $ 1,940 $ 6,097
============ =========== ============ ============
Net income (loss) per common share
Before extraordinary charge.............. $ (2.55) $ (0.59) $ 0.59 $ 0.68
Extraordinary charge..................... (0.42) (0.29)
------------ ------------ ------------ ------------
Net income (loss) per common share............ $ (2.55) $ (0.59) $ 0.17 $ 0.39
============ ============ ============ ============
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 3,932,748 11,122,343 15,700,211
</TABLE>

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

F-4
<PAGE> 49

JP FOODSERVICE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
JUNE 27, 1992 THROUGH JULY 1, 1995
($ 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 June 27, 1992.......................... $ 7,765 $12 $ 27 $ 10,005
Net income (loss)..............................
Net (purchases) of common stock for cash.......
Preference dividends
Preferred stock............................ 700
Yield support..............................
--------- ------ ------- ------- --------- --- ---------
Balance July 3, 1993........................... 8,465 12 27 10,005
--------- ------ ------- ------- --------- --- ---------
Net income (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 (loss)..............................
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
--------- ------ ------- ------- --------- --- ---------

<CAPTION>
DISTRIBUTION IN
EXCESS OF
NET BOOK
ACCUMULATED TREASURY VALUE OF CONTINUING
DEFICIT STOCK STOCKHOLDER'S INTEREST TOTAL
----------- -------- ---------------------- --------

<S> <C> <C> <C> <C>
Balance June 27, 1992.......................... $ (29,061) $ (457) $(44,943) $ (56,652)

Net income (loss).............................. (7,596) (7,596)

Net (purchases) of common stock for cash....... (13) (13)

Preference dividends
Preferred stock............................ (700)
Yield support.............................. (1,727) (1,727)

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

Balance July 3, 1993........................... (39,084) (470) (44,943) (65,988)

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

Net income (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 (loss).............................. 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

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

</TABLE>

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

F-5
<PAGE> 50

JP FOODSERVICE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
($ IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------------------------
JULY 3, 1993 JULY 2, 1994 JULY 1, 1995
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss)..................................... $ (7,596) $ (1,815) $ 1,980
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation of property and equipment........... 8,038 7,780 8,345
Amortization of intangible assets................ 3,395 3,394 2,902
Preferred stock liquidation expense.............. 182
Write-off of loan acquisition costs.............. 3,065
Stock compensation............................... 709
(Gain) on disposal of property and equipment..... (412) (1,102) (248)
Increase (decrease) in deferred taxes payable.... 723 4,224 (683)
Yield support interest payable in senior
subordinated notes............................. 2,624 406
PIK note interest payable in additional notes.... 11,152 9,516 1,284
Changes in assets and liabilities
(Increase) decrease in receivables, net.......... (3,396) (9,401) (20,825)
(Increase) decrease in inventories.......... (12,837) 8,442 (1,560)
(Increase) decrease in other current
assets.................................... 785 (1,723) (1,131)
(Increase) decrease in current portion of
deferred taxes............................ 1,554 (3,978) 2,657
Increase (decrease) in accounts payable..... 5,693 23,619 14,481
Increase (decrease) in accrued expenses..... (7,099) 229 (471)
Increase (decrease) in PYA/Monarch accrued
interest, net............................. 507 1,005 602
-------- -------- --------
Net cash provided by operating activities.................. 3,131 40,596 11,289
-------- -------- --------
Cash flows from investing activities
Additions to property and equipment................... (2,193) (1,895) (3,610)
Cost of business acquisition, net of cash acquired.... (434)
Proceeds from sales of property and equipment......... 474 1,235 248
-------- -------- --------
Net cash used in investing activities...................... (1,719) (660) (3,796)
-------- -------- --------
Cash flows from financing activities
Net proceeds from initial public offering............. 79,927
Long-term debt repayments............................. (74,848)
Payment of recapitalization costs..................... (1,430) (1,432)
Payment of loan acquisition costs..................... (132) (1,690)
Reduction of senior debt.............................. (250) (37,900)
Proceeds from issuance of subordinated debt........... 7,500
Redemption of preferred stock......................... (643)
Proceeds from employee stock purchases................ 302
Principal payments under capital lease obligations.... (4,326) (3,926) (4,989)
Purchases of treasury stock........................... (13) (57)
-------- -------- --------
Net cash used in financing activities...................... (4,721) (35,813) (3,373)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents....... (3,309) 4,123 4,120
Cash and cash equivalents
Beginning of period................................... 10,484 7,175 11,298
-------- -------- --------
End of period......................................... $ 7,175 $ 11,298 $ 15,418
======== ======== ========
Supplemental disclosure of cash paid during the year for:
Interest.............................................. $ 23,425 $ 18,332 $ 16,546
======== ======== ========
Income taxes.......................................... $ 316 $ 313 $ 730
======== ======== ========
</TABLE>

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

F-6
<PAGE> 51

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

NOTE 1 -- UNAUDITED PRO FORMA FINANCIAL DATA

The unaudited pro forma consolidated statement of operations of JP
Foodservice, Inc. ("JPF") and its consolidated subsidiaries (the "Company") for
the year ended July 1, 1995 are based on the Consolidated Financial Statements
of the Company, adjusted to give effect to the Recapitalization (as hereinafter
defined) as if it had occurred on the first day of the fiscal year. The
unaudited pro forma adjustments are based upon currently available information
and upon certain assumptions that management of the Company believes are
reasonable. The unaudited pro forma financial information do not purport to
represent what the Company's actual results of operations would have been if the
Recapitalization had been consummated on the first day of the fiscal year, or
which may result from future operations. The unaudited pro forma financial
information should be read in conjunction with these notes and the audited
Consolidated Financial Statements of the Company.

NOTE 2 -- BUSINESS

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 principal operating subsidiary is JP Foodservice
Distributors, Inc. ("JP"), including JP's consolidated subsidiaries, Sky Bros.,
Inc. and Illinois Fruit and Produce, Inc. The Company uses a 52/53 week fiscal
year ending on the Saturday closest to June 30. Each of fiscal years 1994 and
1995 was 52 weeks. Fiscal year 1993 was 53 weeks.

Sales to the Company's single largest customer constituted approximately
6.3%, 7.0% and 8.1% of net sales in fiscal 1993, 1994 and 1995, respectively.

NOTE 3 -- 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.

Receivables from suppliers for promotional allowances or rebates are
recorded when the Company has received product in sufficient quantity to be
entitled to the allowance.

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.

F-7
<PAGE> 52

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

NOTE 3 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
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 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. 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 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 8).

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.

F-8
<PAGE> 53

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

NOTE 3 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
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 1993,
1994 and 1995 include the following:

<TABLE>
<CAPTION>
FISCAL YEAR
--------------------------
1993 1994 1995
------ ------ ------
<S> <C> <C> <C>
Capital lease obligations for additions to the Company's
transportation fleet...................................... $6,127 $6,320 $3,652
Noncash dividends on:
Accretion of mandatorily redeemable preferred stock.... 82 40
Preferred stock (9% on outstanding shares)............. 700 117
Yield support (20% compounded rate on $5,000 of
equity).............................................. 1,727 305
------ ------ ------
$8,554 $6,824 $3,692
====== ====== ======
</TABLE>

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.

K. Reclassifications

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

NOTE 4 -- ORGANIZATION AND ORIGINAL CAPITALIZATION

The Company was formed on July 3, 1989, pursuant to a Contribution and
Subscription Agreement with PYA/Monarch, Inc. ("PYA/Monarch"), a wholly-owned
subsidiary of Sara Lee Corporation ("Sara Lee"). PYA/Monarch contributed the
stock of JP and institutional and management investors contributed cash.
PYA/Monarch received consideration in the form of cash, debt, stock and warrants
over a series of financial transactions in exchange for the stock of JP.

For financial reporting purposes, the original capitalization of the
Company is 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 is 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 are treated as a separate component
of stockholders' equity.

NOTE 5 -- EXCHANGE AGREEMENT

The Company's equity holders entered into an Exchange Agreement dated
August 26, 1993 (the "Exchange Agreement") pursuant to which PYA/Monarch and the
senior subordinated debtholder adjusted their subordinated debt and preferred
stock claims in exchange for a revised distribution of the common stock
ownership of the Company. PYA/Monarch and one of the institutional investors
also received $2.4 million of

F-9
<PAGE> 54

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

NOTE 5 -- EXCHANGE AGREEMENT -- (CONTINUED)
zero coupon preferred stock with a mandatory redemption date of July 3, 2004.
All existing treasury stock was canceled and 37,195 new Class B shares were
reserved as treasury shares for issuance to management investors. All warrants
issued in connection with the initial capitalization were canceled and all
vested options were canceled. In conjunction with the Exchange Agreement, the
Company's obligation to provide minimum returns to one investor was eliminated
and other corporate agreements were amended.

NOTE 6 -- RECAPITALIZATION

During the second quarter of fiscal 1995, the Company completed a
recapitalization plan (the "Recapitalization"), which was designed to reduce
further the Company's indebtedness and related interest costs, improve its
operating and financial flexibility and enhance its ability to access the
capital markets.

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 (the "Common Stock"), 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 (the
"10% Junior Subordinated PIK Notes") and 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 (the "Senior Preferred
Stock") and (5) 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 "Junior Preferred Stock").

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. The indebtedness repaid or refinanced consisted of the
following indebtedness: (1) the Company's existing credit facility, consisting
of a $110 million combined term loan and revolving credit loan and $12.5 million
bulge facility, (2) all of the outstanding indebtedness evidenced by the Senior
Secured (Series A) Notes due 1998 and the Senior Secured (Series B) Notes due
1998, (3) all of the outstanding indebtedness evidenced by the 13.75% Senior
Subordinated Notes due 1999, (4) all of the outstanding indebtedness evidenced
by the 14% Senior Subordinated Promissory Notes due July 2, 1999, (5) all of the
outstanding indebtedness evidenced by the 13.75% Senior Subordinated PIK Notes
due 1999 and (6) $26.0 million principal amount of the 10% Junior Subordinated
PIK Notes.

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.

NOTE 7 -- STOCK COMPENSATION CHARGE

The Company incurred a one-time non-cash stock compensation charge of $0.7
million ($0.05 per common share on a pro forma basis) with respect to 94,150
shares of Class B voting stock offered to certain management investors in the
first quarter of fiscal 1995. These shares were reserved for issuance to the
management investors in August 1993 pursuant to the Exchange Agreement, and the
sale price was determined in accordance with a stockholders agreement. The
compensation charge was calculated based on

F-10
<PAGE> 55

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

NOTE 7 -- STOCK COMPENSATION CHARGE -- (CONTINUED)
the difference between the price paid for such shares and the then-assumed
initial public offering price of the Common Stock sold in the Offering.

NOTE 8 -- 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.

NOTE 9 -- ACQUISITION

Effective June 30, 1995, the Company purchased 100% of the outstanding
common stock of a foodservice distributor for $2.8 million, of which 25% was in
the form of cash and 75% in Common Stock. The excess of purchase price over the
fair value of net assets is approximately $1.4 million and will be amortized
using the straight-line method over 40 years. Unaudited fiscal 1995 sales for
the acquired company approximated $15.8 million.

NOTE 10 -- RELATED PARTY TRANSACTIONS

Accounts Payable to Related Parties

The Company regularly purchases products from Sara Lee and its affiliates
for resale to customers. Related party payables arise from such transactions.
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 $63,907, $69,820 and $72,590 in
fiscal 1993, 1994 and 1995, respectively.

PYA/Monarch Note Receivable and Promissory Note Payable

In 1989, prior to the transaction described in Note 4, 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 net principal amount, which
is a $2 million obligation of JPF, plus accrued interest, is payable in 1998.
Interest can be paid in additional payment-in-kind notes. The accompanying
consolidating balance sheets reflect a net noncurrent note payable balance of
$3,398 and $4,000 at July 2, 1994 and July 1, 1995, respectively. Gross
principal and interest receivable (payable) related to these notes are as
follows:

<TABLE>
<CAPTION>
JULY 2, 1994 JULY 1, 1995
------------ ------------
<S> <C> <C>
Note receivable............................................... $ 105,000 $ 100,000
Note payable.................................................. (107,000) (102,000)
Interest receivable........................................... 62,535 73,873
Interest payable.............................................. (63,933) (75,873)
------------ ------------
Net........................................................... $ (3,398) $ (4,000)
========= =========
</TABLE>

F-11
<PAGE> 56

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

NOTE 11 -- RECEIVABLES

Receivables are composed of the following:

<TABLE>
<CAPTION>
JULY 2, 1994 JULY 1, 1995
------------ ------------
<S> <C> <C>
Customer accounts and notes................................... $ 80,730 $ 87,279
Less allowance for doubtful accounts.......................... (2,201) (2,253)
------------ ------------
Net customer.................................................. 78,529 85,026
------------ ------------
From suppliers................................................ 16,893 28,636
From related parties.......................................... 1,425 3,818
Less allowance for doubtful accounts.......................... (541) (273)
------------ ------------
Net supplier.................................................. 17,777 32,181
------------ ------------
Tax refunds................................................... 1,030 799
Other......................................................... 4,288 5,485
------------ ------------
Total other................................................... 5,318 6,284
------------ ------------
$101,624 $123,491
========= =========
</TABLE>

NOTE 12 -- PROPERTY AND EQUIPMENT

The components of property and equipment are as follows:

<TABLE>
<CAPTION>
JULY 2, 1994 JULY 1, 1995
------------ ------------
<S> <C> <C>
Land.......................................................... $ 9,498 $ 9,685
Buildings..................................................... 45,681 47,059
Machinery and equipment....................................... 25,399 27,849
Leasehold improvements........................................ 5,766 5,831
Vehicles held under capital leases (Note 16).................. 30,395 33,950
------------ ------------
116,739 124,374
Accumulated depreciation...................................... (34,538) (43,221)
------------ ------------
$ 82,201 $ 81,153
========= =========
</TABLE>

F-12
<PAGE> 57

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

NOTE 13 -- GOODWILL AND OTHER NONCURRENT ASSETS

Goodwill and other noncurrent assets are composed of the following:

<TABLE>
<CAPTION>
JULY 2, 1994 JULY 1, 1995
------------ ------------
<S> <C> <C>
Goodwill...................................................... $ 81,717 $ 83,143
Accumulated amortization...................................... (10,299) (12,340)
------------ ------------
71,418 70,803
------------ ------------
Loan acquisition costs........................................ 9,079 1,690
Accumulated amortization...................................... (5,532) (158)
------------ ------------
3,547 1,532
------------ ------------
Other intangible assets....................................... 5,601 5,601
Accumulated amortization...................................... (1,121) (1,342)
------------ ------------
4,480 4,259
------------ ------------
$ 79,445 $ 76,594
========= =========
</TABLE>

NOTE 14 -- ACCRUED EXPENSES

The components of accrued expenses are as follows:

<TABLE>
<CAPTION>
JULY 2, 1994 JULY 1, 1995
------------ ------------
<S> <C> <C>
Compensation.................................................. $ 2,741 $ 3,343
Benefits/taxes................................................ 1,879 2,175
Interest...................................................... 2,118 1,903
Operating expenses............................................ 3,938 3,436
------------ ------------
$ 10,676 $ 10,857
========= =========
</TABLE>

F-13
<PAGE> 58

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

NOTE 15 -- DEBT

Long-term debt is composed of the following:

<TABLE>
<CAPTION>
JULY 2, 1994* JULY 1, 1995
------------- ------------
<S> <C> <C>
Senior bank facilities
JP term loan............................................ $ 26,658
JP revolving credit loan................................ 22,000 $ 45,000
------------- ------------
48,658 45,000
------------- ------------
Senior institutional notes
JP senior notes, Series A............................... 69,146
JP senior notes, Series B............................... 14,817
JP senior notes......................................... 85,000
------------- ------------
83,963 85,000
------------- ------------
Total senior debt............................................ 132,621.... 130,000
Less current portion......................................... (3,000)
------------- ------------
Noncurrent senior debt....................................... 129,621 130,000
------------- ------------
Subordinated debt
JP 13.75% senior subordinated notes payable to
stockholders.......................................... 27,500
JP 13.75% senior subordinated PIK notes payable to
stockholders.......................................... 16,811
JPF 14% senior subordinated PIK notes payable to
stockholders.......................................... 3,359
JPF junior subordinated PIK notes payable to
PYA/Monarch........................................... 65,115
JPF junior subordinated PIK notes payable to
stockholders.......................................... 5,426
JP promissory note payable to PYA/Monarch -- see Note
10.................................................... 3,398 4,000
------------- ------------
Noncurrent subordinated debt................................. 121,609 4,000
------------- ------------
Total long-term debt......................................... $ 251,230 $134,000
========= =========
</TABLE>

- ---------------
(* See Note 6.)

Under the JP 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 .875% per annum. Borrowings are limited to 85% of eligible
receivables 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 1/4 of 1% on the unused portion of the credit arrangement.

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

At July 1, 1995, the Company has approximately $11.5 million of outstanding
letters of credit securing the Company's medical and worker's compensation
insurance policies.

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.

F-14
<PAGE> 59

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

NOTE 15 -- DEBT -- (CONTINUED)
Aggregate annual principal payments applicable to long-term debt, excluding
capital leases (see Note 16), are as follows:

<TABLE>
<CAPTION>
FISCAL
YEAR ENDING
--------------------------------------------------------------------------
<S> <C>
1996...................................................................... $ 0
1997...................................................................... 0
1998...................................................................... 4,000
1999...................................................................... 12,143
2000...................................................................... 57,143
2001 and thereafter....................................................... 60,714
--------
$134,000
========
</TABLE>

On April 12, 1994, the Company entered into interest rate cap agreement to
reduce risks from interest rate fluctuations on its variable rate debt. The
contract is for a notional principal amount of $32 million through April 12,
1995 and $27 million for April 13, 1995 through April 12, 1996 and caps the
LIBOR rate, to be measured at quarterly settlement dates, at 11%.

On May 12, 1995, the Company entered into two $15 million interest rate
swap agreements. Under the terms of these agreements, the Company has fixed its
cost of borrowing on $30 million of floating rate debt at an effective annual
rate of 6.56%. The agreements which have an initial term of one year, can be
extended one additional year at the option of the counterparty.

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 $137,656.

NOTE 16 -- LEASES

Operating

The Company leases its corporate office facilities and certain equipment
under operating leases. Charges to operations for all operating leases were
$5,836, $5,432 and $6,026 in fiscal 1993, 1994 and 1995, 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 5.5% to 10.2% 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-15
<PAGE> 60

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

NOTE 16 -- 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>
1996.............................................................. $ 4,540 $ 4,979
1997.............................................................. 4,198 4,359
1998.............................................................. 3,131 3,304
1999.............................................................. 1,439 2,774
2000.............................................................. 1,124 2,433
Thereafter........................................................ 2,811 1,615
--------- -------
$17,243 19,464
=======
Less interest portion............................................. (2,815)
-------
16,649
Less current obligations.......................................... (4,092)
-------
Noncurrent obligations............................................ $12,557
=======
</TABLE>

NOTE 17 -- INCOME TAXES

The Company's income is taxable only in the United States. The 1993
statement of operations reflects an income tax benefit which results from the
Company's ability to utilize losses generated in fiscal 1993 to recover taxes
paid in previous years. The components of income tax (before extraordinary
charge) are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR
---------------------------
1993 1994 1995
------- ----- -------
<S> <C> <C> <C>
Current tax (expense) benefit
U.S. federal......................................... $ 5,288 $ 125 $(2,632)
State and local...................................... (215) (244) (928)
------- ----- -------
Total current................................... 5,073 (119) (3,560)
------- ----- -------
Deferred tax (expense) benefit
U.S. federal......................................... (2,334) (516) (2,332)
State and local...................................... 57 (6) (70)
------- ----- -------
Total deferred.................................. (2,277) (522) (2,402)
------- ----- -------
Total tax (expense) benefit recorded...................... $ 2,796 $(641) $(5,962)
======= ===== =======
</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-16
<PAGE> 61

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

NOTE 17 -- INCOME TAXES -- (CONTINUED)
(expense) benefit results from changes in the liability for deferred taxes.
Temporary differences and the resulting deferred income taxes are as follows:

<TABLE>
<CAPTION>
JULY 2, 1994 JULY 1, 1995
------------ ------------
<S> <C> <C>
Current
Inventory................................................ $ (370) $ (361)
Allowance for doubtful accounts.......................... 544 567
Accrued expenses and other............................... 516 228
Net operating loss carryforwards......................... 2,401
------------ ------------
Current deferred tax asset (liability).............. 3,091 434
------------ ------------
Noncurrent
Property and equipment................................... (8,390) (8,846)
Intangible assets........................................ (1,819) (1,712)
Other, net............................................... (2,016) (984)
------------ ------------
Noncurrent deferred tax liability................... (12,225) (11,542)
------------ ------------
Total deferred income taxes......................... $ (9,134) $(11,108)
========= =========
</TABLE>

The effective income tax rate on consolidated pre-tax income (loss) differs
from the statutory U.S. federal income tax rate for fiscal 1993, 1994 and 1995
as shown below:
<TABLE>
<CAPTION>
FISCAL YEAR
---------------------------------------------------------
1993 1994 1995
--------------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Computed statutory (expense)
benefit......................... $3,533 34.00% $ 411 35.00% $(4,386) (35.00)%
State and local income tax, net of
federal tax..................... (103) (0.99) (161) (13.71) (649) (5.20)
Permanent differences............. (758) (7.29) (761) (64.82) (1,161) (9.29)
Enacted tax rate change........... (156) (13.29)
Gas tax credit.................... 124 1.19 125 10.65 156 1.25
Other............................. (99) (8.43) 78 0.64
------ ----- ----- ------ ------- ------
$2,796 26.91% $(641) (54.60)% $(5,962) (47.6)%
====== ===== ===== ====== ======= ======
</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 18 -- MANDATORILY REDEEMABLE STOCK (RELATED PARTIES)

As of July 2, 1994, the Company had outstanding shares of preferred and
common stock with mandatory redemption features as follows:

<TABLE>
<S> <C>
Senior preferred stock, redemption value of $788 in July 2004............... $ 195
Junior preferred stock, redemption value of $1,750 in July 2004............. 433
Class B voting stock, $.01 par value, 743,904 shares authorized, 676,402
shares issued and outstanding............................................. 1,760
------
$2,388
======
</TABLE>

F-17
<PAGE> 62

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

NOTE 18 -- MANDATORILY REDEEMABLE STOCK (RELATED PARTIES) -- (CONTINUED)
The Senior Preferred Stock and the Class B voting common stock were
converted into shares of newly authorized Common Stock and the junior preferred
stock was redeemed as part of the Recapitalization (see Note 6).

NOTE 19 -- STOCKHOLDERS' EQUITY

Common Stock

As of July 2, 1994, after giving effect to the 3.936 for one stock split
effected on October 20, 1994, common stock consisted of the following:

<TABLE>
<CAPTION>
TOTAL
PAR VALUE
---------
<S> <C>
Class A voting, $.01 par value, 3,936,000 shares authorized,
830,496 shares issued and outstanding........................... $ 8
Class C voting, $.01 par value, 783,264 shares authorized,
783,264 shares issued and outstanding........................... 8
Class E nonvoting, $.01 par value, 2,361,600 shares authorized,
1,578,336 shares issued and outstanding......................... 16
---
$32
=======
</TABLE>

Effective October 20, 1994 the Company's amended and restated certificate
of incorporation authorized issuance of 45,000,000 shares of common stock, $.01
par value, and 5,000,000 shares of preferred stock, $.01 par value. All of the
outstanding shares of all classes of common stock automatically were converted
into the class of Common Stock issued in the Offering.

Registration Rights and Yield Support Agreement

Prior to August 26, 1993 under the Registration Rights and Yield Support
Agreement with certain investors, the Company had granted yield support to a
group of investors who held the senior subordinated notes ($35 million) and
1,968,000 shares of combined Class A and B common stock ($5 million). The
Company was obligated to ensure that this investor group received a 20%
compounded rate of return on its aggregate investment through January 3, 1996.
Accordingly, operations were charged for $2,624 and $410 in fiscal 1993 and
1994, respectively, of additional interest expense to yield a 20% compound rate
of return on the senior subordinated notes. Dividends of $1,727 and $305 were
accrued in fiscal 1993 and 1994, respectively, to yield a 20% preference return
on equity.

As part of the Exchange Agreement (see Note 5), the Registration Rights and
Yield Support Agreement was amended to eliminate the yield support provisions.
Under the terms of the Exchange Agreement, all prior accrued balances related to
the yield support obligation were eliminated.

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.

F-18
<PAGE> 63

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

NOTE 19 -- STOCKHOLDERS' EQUITY -- (CONTINUED)
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.

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
</TABLE>

Awards under the Stock Option Plan also may be made in the form of
restricted stock, at the discretion of the Compensation Committee. The
Compensation Committee has the authority to determine the terms and conditions
of any restricted stock awards. No such awards were made through July 1, 1995.

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. During fiscal 1995, 15,000 shares were
granted under the Plan at an exercise price of $11.00 per share. All such
options granted remain outstanding at July 1, 1995.

NOTE 20 -- 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 $1,466, $1,632 and $1,848
in fiscal 1993, 1994 and 1995, 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 $1,142, $1,145 and $1,274 in fiscal
1993, 1994 and 1995, respectively.

F-19
<PAGE> 64

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

NOTE 20 -- EMPLOYEE RETIREMENT BENEFITS -- (CONTINUED)
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 during fiscal 1995.

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 21 -- 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 22 -- QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial data for the fiscal years ended July 2, 1994
and July 1, 1995 is as follows:

<TABLE>
<CAPTION>
1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- --------
<S> <C> <C> <C> <C>
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
======== ======== ======== ========
1994
Net sales................................... $263,944 $250,723 $239,543 $274,790
Gross profit................................ 44,559 42,117 39,526 45,681
Net income (loss)........................... (1,257) (239) (1,289) 937
Net income (loss) per common share.......... $ (0.43) $ (0.07) $ (0.33) $ 0.24
======== ======== ======== ========
</TABLE>

F-20
<PAGE> 65

JP FOODSERVICE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
JULY 1, 1995 MARCH 30, 1996
------------ --------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents...................................... $ 15,418 $ 7,960
Receivables, net............................................... 123,491 141,784
Inventories.................................................... 67,629 81,071
Other current assets........................................... 8,319 10,637
Current deferred tax asset..................................... 434 540
------------ --------------
Total current assets...................................... 215,291 241,992
Property and equipment, net......................................... 81,153 91,625
Goodwill and other noncurrent assets................................ 76,594 77,424
------------ --------------
Total assets.............................................. $373,038 $411,041
========= ===========
LIABILITY AND STOCKHOLDERS' EQUITY
Current liabilities
Current obligations under capital leases....................... $ 4,092 $ 5,513
Accounts payable............................................... 96,619 108,769
Accrued expenses............................................... 10,857 11,246
------------ --------------
Total current liabilities................................. 111,568 125,528
Nonrecurrent liabilities
Senior debt.................................................... 130,000 139,500
Subordinated debt with related parties......................... 4,000 4,050
Obligations under capital leases............................... 12,557 16,917
Noncurrent deferred tax liability.............................. 11,542 11,798
------------ --------------
Total noncurrent liabilities.............................. 158,099 172,265
------------ --------------
Total liabilities......................................... 269,667 297,793
========= ===========
Commitments and contingent liabilities
Stockholders' equity
Common stock................................................... 159 160
Paid-in-capital................................................ 187,618 189,425
Accumulated deficit............................................ (39,463) (31,394)
Distribution in excess of net book value of continuing
stockholder's interest........................................ (44,943) (44,943)
------------ --------------
Total stockholders' equity................................ 103,371 113,248
========= ===========
Total liabilities and stockholders' equity.......................... $373,038 $411,041
========= ===========
</TABLE>

See accompanying notes to the condensed consolidated financial statements.

F-21
<PAGE> 66

JP FOODSERVICE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------------------
APRIL 1, 1995 MARCH 30, 1996
------------- --------------
<S> <C> <C>
Net sales.......................................................... $ 810,804 $ 908,905
Cost of sales...................................................... 675,407 752,675
------------- --------------
Gross profit....................................................... 135,397 156,230
Operating expenses................................................. 110,908 128,893
Amoritization of intangible assets................................. 1,697 1,741
Stock compensation charge.......................................... 709
------------- --------------
Income from operations............................................. 22,083 25,596
------------- --------------
Interest expense................................................... 16,933 9,913
Nonrecurring charge................................................ 1,517
------------- --------------
Other expenses..................................................... 16,933 11,430
------------- --------------
Income before income taxes and extraordinary charge................ 5,150 14,166
Provision for income taxes......................................... 2,953 6,097
------------- --------------
Income before extraordinary charge................................. 2,197 8,069
Extraordinary charge on early extinguishment of debt
(net of $3,059 of taxes)......................................... (4,590)
------------- --------------
Net income (loss).................................................. (2,393) 8,069
Preference dividends............................................... (40)
------------- --------------
Net income (loss) applicable to common stockholders................ $ (2,433) $ 8,069
========= ===========
Net income (loss) per common share
Before extraordinary charge................................... $ 0.23 $ 0.51
Extraordinary charge.......................................... (0.48)
------------- --------------
Net income (loss)............................................. $ (0.25) $ 0.51
========= ===========
Weighted average number of shares of common stock outstanding...... 9,599,520 15,944,455
========= ===========
</TABLE>

See accompanying notes to the condensed consolidated financial statements.

F-22
<PAGE> 67

JP FOODSERVICE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------------------
APRIL 1, 1995 MARCH 30, 1996
------------- --------------
<S> <C> <C>
Net cash provided by (used in) operating activities................ $ 1,800 $ (4,865)
------------- --------------
Cash flows from investing activities
Additions to property and equipment........................... (1,608) (7,854)
Net cost of business acquisition.............................. (2,765)
------------- --------------
Net cash used in investing activities.............................. (1,608) (10,619)
------------- --------------
Cash flows from financing activities
Net proceeds from initial public offering..................... 79,927
Long-term debt (repayments) borrowings........................ (70,749) 9,500
Payment of recapitalization costs............................. (1,256)
Payment of loan acquisition costs............................. (1,626)
Liquidation of preferred stocks............................... (643)
Principal payments under capital lease obligations............ (3,670) (3,282)
Proceeds from employee stock purchases........................ 1,808
------------- --------------
Net cash provided by financing activities.......................... 1,983 8,026
------------- --------------
Net increase (decrease) in cash and cash equivalents............... 2,175 (7,458)
Cash and cash equivalents
Beginning of period........................................... 11,298 15,418
------------- --------------
End of period................................................. $ 13,473 $ 7,960
========= ===========
</TABLE>

See accompanying notes to the condensed consolidated financial statements.

F-23
<PAGE> 68

JP FOODSERVICE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 -- BASIS OF PRESENTATION

The Condensed Consolidated Financial Statements of JP Foodservice, Inc.
(the "Company") at March 30, 1996 and the three and nine months ended April 1,
1995 and March 30, 1996, respectively, included herein are unaudited, but
include all adjustments (consisting only of normal recurring entries) which the
Company's management believes to be necessary for the fair presentation of the
financial position, results of operations and cash flows of the Company at and
for the periods presented. The July 1, 1995 Condensed Consolidated Balance Sheet
was derived from the Company's annual financial statements. Interim results are
not necessarily indicative of results that may be expected for the full year.

NOTE 2 -- NET INCOME (LOSS) PER COMMON SHARE

Net income (loss) per common share is based on the weighted average number
of common and common equivalent shares outstanding during the period.

NOTE 3 -- NONRECURRING CHARGE

On February 19, 1996, the Company terminated discussions with Sara Lee
Corporation regarding the proposed combination of the Company and PYA Monarch,
Inc. (a wholly-owned subsidiary of Sara Lee Corporation). 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 cost incurred
related to the transaction (primarily legal and advisory fees) of approximately
$1.5 million. The after-tax impact of this nonrecurring charge was $0.9 million
$(.06) per share. Excluding this charge, net income would have been $2.3 million
and $9.0 million for the three-month and nine-month periods, respectively, and
net income per share would have been $0.15 and $0.57 for the three-month and
nine-month periods, respectively.

NOTE 4 -- STOCKHOLDERS' EQUITY

On February 19, 1996, the Board of Directors of the Company adopted a
shareholder rights plan. Issuance of preferred share purchase rights (the
"Rights") under the plan will be triggered upon 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 or 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 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 Right entitles the registered holder or common
stock to purchase from the Company, upon the occurrence of the specified
triggering events, one one-hundredth of a share of a newly authorized issue of
junior participating 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 5 -- CONTINGENCIES

From time to time, the Company is involved in litigation and proceeding
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 at this time.

F-24
<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, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR 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, SUCH SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. 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.................. 12
Capitalization......................... 13
Unaudited Pro Forma Condensed Combined
Financial Statements................. 14
Selected Consolidated Financial Data... 19
Management's Discussion and Analysis
of Financial Condition and Results of
Operations........................... 20
Business............................... 24
Management............................. 36
Principal Stockholders................. 38
Shares Eligible for Future Sale........ 39
Underwriting........................... 40
Legal Matters.......................... 41
Experts................................ 41
Additional Information................. 42
Index to Consolidated Financial
Statements........................... F-1

3,000,000 SHARES

JP FOODSERVICE, INC.

COMMON STOCK

(LOGO)
---------

PROSPECTUS

, 1996

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

THE ROBINSON-HUMPHREY
COMPANY, INC.

RODMAN & RENSHAW, INC.

------------------------------------------------------
------------------------------------------------------
<PAGE> 70

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................................................... $
NASD filing fee....................................................
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>

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 (filed as Exhibit 10.16 hereto), 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 Registrant. Filed as Exhibit 4.3 to the Registrant's Registration Statement
on Form S-1 (No. 33-82724) and incorporated herein by reference.
*5.1 Form of opinion of Shaw, Pittman, Potts & Trowbridge regarding the validity of
the securities being issued.
10.1 Employment Agreement dated as of July 3, 1989, as amended, by and between the
Company and James L. Miller. Filed as Exhibit 10.1 to the Company's
Registration Statement on Form S-1 (No. 33-82724) and incorporated herein by
reference.
10.2 Employment Agreement, dated as of August 9, 1991, by and between the Company
and Lewis Hay, III. Filed as Exhibit 10.2 to the Company's Registration
Statement on Form S-1 (No. 33-82724) and incorporated herein by reference.
10.3 Second Amendment, dated as of June 27, 1995, to Employment Agreement, dated as
of July 3, 1989, as amended, by and between the Company and James L. Miller.
Filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended December 30, 1995 and incorporated herein by reference.
10.4 First Amendment, dated as of June 27, 1995, to Employment Agreement, dated as
of August 9, 1991, by and between the Company and Lewis Hay, III. Filed as
Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly
period ended December 30, 1995 and incorporated herein by reference.
10.5 Severance Agreement, dated as of September 27, 1995, by and between the Company
and Mark P. Kaiser. Filed as Exhibit 10.3 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended December 30, 1995 and incorporated
herein by reference.
</TABLE>

II-2
<PAGE> 72

<TABLE>
<C> <S>
10.6 Severance Agreement, dated as of September 27, 1995, by and between the Company
and George T. Megas. Filed as Exhibit 10.4 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended December 30, 1995 and incorporated
herein by reference.
10.7 Employment Agreement, dated as of January 4, 1996, between the Company and
James L. Miller. Filed as Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended March 30, 1996 and incorporated herein
by reference.
10.8 Employment Agreement, dated as of January 4, 1996, between the Company and
Lewis Hay, III. Filed as Exhibit 10.2 to the Company's Quarterly Report on Form
10-Q for the quarterly period ended March 30, 1996 and incorporated herein by
reference.
10.9 Employment Agreement, dated as of January 4, 1996, between the Company and Mark
P. Kaiser. Filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended March 30, 1996 and incorporated herein by
reference.
10.10 Employment Agreement, dated as of January 4, 1996, between the Company and
George T. Megas. Filed as Exhibit 10.4 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended March 30, 1996 and incorporated herein
by reference.
10.11 JP Foodservice, Inc. 1994 Stock Incentive Plan. Filed as Exhibit 10.3 to the
Company's Registration Statement on Form S-1 (No. 33-82724) and incorporated
herein by reference.
10.12 JP Foodservice, Inc. Stock Option Plan for Outside Directors. Filed as Exhibit
10.4 to the Company's Annual Report on Form 10-K for the fiscal year ended July
1, 1995 and incorporated herein by reference.
10.13 JP Foodservice, Inc. 401(k) Retirement Plan, as amended. Filed as Exhibit 10.5
to the Company's Annual Report on Form 10-K for the fiscal year ended July 1,
1995 and incorporated herein by reference.
10.14 JP Foodservice, Inc. 1994 Employee Stock Purchase Plan. Filed as Exhibit 10.6
to the Company's Registration Statement on Form S-1 (No. 33-82724) and
incorporated herein by reference.
10.15 Lease dated October 29, 1993 between JP Foodservice Distribution, Inc. and
CMANE -- Patuxent Woods II Limited Partnership relating to the lease of the
Company's corporate headquarters. Filed as Exhibit 10.7 to the Company's
Registration Statement on Form S-1 (No. 33-82724) and incorporated herein by
reference.
10.16 Amended and Restated Registration Rights Agreement dated as of November 22,
1994 by and among the Company, PYA/Monarch, Inc., Chase Manhattan Investment
Holdings, Inc., the Equitable Investors named therein and the management
investors named therein. Filed as Exhibit 10.2 to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended October 1, 1994 and
incorporated herein by reference.
10.17 Description of the Company's annual bonus plan. Filed as Exhibit 10.9 to the
Company's Registration Statement on Form S-1 (No. 33-82724) and incorporated
herein by reference.
10.18 Board Membership Agreement, dated as of November 15, 1994, between the Company
and Sara Lee Corporation. Filed as Exhibit 10.3 to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended October 1, 1994 and
incorporated herein by reference.
</TABLE>

II-3
<PAGE> 73

<TABLE>
<C> <S>
10.19 Note Purchase Agreement, dated as of November 10, 1994, relating to the 8.55%
Senior Notes due 2004 of JP Foodservice Distributors, Inc. Filed as Exhibit
10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period
ended October 1, 1994 and incorporated herein by reference.
*10.20 Amendment No. 1, dated as of May 31, 1996, to Note Purchase Agreement, dated as
of November 10, 1994, relating to the 8.55% Senior Notes due 2004 of JP
Foodservice Distributors, Inc.
10.21 Credit Agreement dated as of November 10, 1994 among JP Foodservice
Distributors, Inc., the lenders party thereto, NationsBank of North Carolina,
N.A., as Administrative Agent and Co-Arranger, and The Chase Manhattan Bank,
N.A., as Syndication Agent and Co-Arranger. Filed as Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the quarterly period ended October
1, 1994 and incorporated by reference.
*10.22 Amendment No. 1, dated as of May 31, 1996, to Credit Agreement, dated as of
November 10, 1994, among JP Foodservice Distributors, Inc., the lenders party
thereto, NationsBank of North Carolina, N.A. as Administrative Agent and
Co-Arranger, and the Chase Manhattan Bank, N.A., as Syndication Agent and
Co-Arranger.
10.23 Form of Stock Option Agreement used generally in connection with the JP
Foodservice, Inc. 1994 Stock Incentive Plan. Filed as Exhibit 10.13 to the
Company's Annual Report on Form 10-K for the fiscal year ended July 1, 1996 and
incorporated herein by reference.
10.24 Form of Stock Option Agreement used generally in connection with the JP
Foodservice, Inc. Stock Option Plan for Outside Directors. Filed as Exhibit
10.14 to the Company's Annual Report on Form 10-K for the fiscal year ended
July 1, 1996 and incorporated herein by reference.
10.25 Rights Agreement, dated as of February 19, 1996, between the Company and The
Bank of New York, as Rights Agent. The Rights Agreement includes as Exhibit A
the form of Certificate of Designations of the Series A Junior Participating
Preferred Stock, as Exhibit B the form of Right Certificate and as Exhibit C
the form of Summary of Rights to Purchase Preferred Shares. Filed as Exhibit 4
to the Company's Current Report on Form 8-K filed on February 22, 1996 with the
Securities and Exchange Commission and incorporated herein by reference.
*10.26 Amendment No. 1, dated as of May 17, 1996, to the Rights Agreement, dated as of
February 19, 1996, between the Company and The Bank of New York, as Rights
Agent.
**23.1 Consent of Price Waterhouse LLP, Independent Accountants.
**23.2 Consent of KPMG Peat Marwick LLP, Independent Accountants.
*23.3 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

Schedule

Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.

II-4
<PAGE> 74

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.

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-5
<PAGE> 75

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 June 27, 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>
June 27, 1996 /s/ JAMES L. MILLER
-----------------------------------------------
James L. Miller, Chairman of the Board,
President and Chief Executive Officer
(Principal Executive Officer)

June 27, 1996 /s/ LEWIS HAY, III
-----------------------------------------------
Lewis Hay, III, Director,
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

June 27, 1996 /s/ GEORGE T. MEGAS
-----------------------------------------------
George T. Megas, Vice President -- Finance
(Principal Accounting Officer)

June 27, 1996 /s/ GEORGE A. MIDWOOD
-----------------------------------------------
George A. Midwood, Director

June 27, 1996 /s/ MICHAEL J. DRABB
-----------------------------------------------
Michael J. Drabb, Director

June 27, 1996 /s/ DAVID M. ABRAMSON
-----------------------------------------------
David M. Abramson, Director

June 27, 1996 /s/ ERIC E. GLASS
-----------------------------------------------
Eric E. Glass, Director
</TABLE>

II-6

<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, 1995 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 July 1, 1995. We also consent to the references to us under
the headings "Experts" and "Selected Financial Data" in such Prospectus.
However, it should be noted that Price Waterhouse LLP has not prepared or
certified such "Selected Financial Data."

PRICE WATERHOUSE LLP

Baltimore, Maryland
July 1, 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 inclusion in the Prospectus constituting part of this
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

Las Vegas, Nevada
June 27, 1996

<ARTICLE> 5
<LEGEND>
The Schedule contains Summary Financial Information extracted from the fiscal
year ended July 1, 1995 and the nine-month period ended March 30, 1996
financial statements of JP Foodservice, Inc. and is qualified in its entirety by
reference to such financial statements.
</LEGEND>

<S> <C> <C>
<PERIOD-TYPE> YEAR 9-MOS
<FISCAL-YEAR-END> JUL-01-1995 JUN-29-1996
<PERIOD-END> JUL-01-1995 MAR-30-1996
<CASH> 15,418 7,960
<SECURITIES> 0<F1> 0<F1>
<RECEIVABLES> 126,017 143,813
<ALLOWANCES> 2,526 2,029
<INVENTORY> 67,629 81,071
<CURRENT-ASSETS> 215,291 241,992
<PP&E> 124,374 150,937
<DEPRECIATION> 43,221 59,312
<TOTAL-ASSETS> 373,038 411,041
<CURRENT-LIABILITIES> 111,568 125,528
<BONDS> 0<F1> 0<F1>
0<F1> 0<F1>
0<F1> 0<F1>
<COMMON> 159 160
<OTHER-SE> 103,212 113,088
<TOTAL-LIABILITY-AND-EQUITY> 373,038 411,041
<SALES> 1,108,253 908,905
<TOTAL-REVENUES> 1,108,253 908,905
<CGS> 921,902 752,675
<TOTAL-COSTS> 1,075,302 883,309
<OTHER-EXPENSES> 0 1,517
<LOSS-PROVISION> 1,619 1,628
<INTEREST-EXPENSE> 20,419 9,913
<INCOME-PRETAX> 12,532 14,166
<INCOME-TAX> 5,962 6,097
<INCOME-CONTINUING> 6,570 8,069
<DISCONTINUED> 0<F1> 0<F1>
<EXTRAORDINARY> 4,590 0
<CHANGES> 0<F1> 0<F1>
<NET-INCOME> 1,980 8,069
<EPS-PRIMARY> .17 .51
<EPS-DILUTED> 0<F1> 0<F1>
<FN>
<F1>Item numbers omitted do not apply to JP Foodservice, Inc.
</FN>

</TABLE>