SYSCO Earnings Per Share Surge 41% for Fiscal Third Quarter
Houston, April 19 /PRNewswire -- SYSCO Corporation (NYSE: SYY), the
nation's leading foodservice distributor and a member of the Fortune 100 for the
fourth consecutive year, today announced continued robust sales and earnings
results for the fiscal 2000 third quarter ended April 1, 2000. Diluted earnings
per share of $0.31 cents represented a 41 percent increase above the $0.22
earnings per share achieved during the same quarter last year. Net earnings for
the quarter also rose 41 percent, to $102.0 million, compared to the $72.6
million recorded during the fiscal 1999 third quarter. Sales for the period
reached $4.7 billion, a 13.4 percent gain over last year's third quarter sales
of $4.2 billion.
Diluted earnings per share for the nine months of fiscal 2000 increased
27.4 percent to $0.93 before an accounting change that occurred during the first
quarter of fiscal 2000, compared to $0.73 cents per share earned during the
first three quarters of fiscal 1999. Sales through the third quarter were $14.0
billion, an 11.3 percent gain, as compared to sales of $12.6 billion through the
third quarter of the previous year. Net earnings before the accounting change
increased 26.2 percent to $309.6 million compared with $245.4 million for the
same period a year earlier.
Charles H. Cotros, SYSCO's president and chief executive officer, said,
"The strength and momentum SYSCO consistently has displayed throughout its
30-year history has continued into the first quarter of the 21st century. This
outstanding quarter has resulted from a variety of factors and strategies,
including our C.A.R.E.S. (Customers Are Really Everything to SYSCO) and expense
reduction initiatives. In addition, our fiscally prudent acquisitions and
fold-out strategies, the moderate winter weather experienced throughout North
America, a well-balanced customer mix and the benefits realized from SUS (SYSCO
Uniform Systems), our enterprise-wide computer system, all worked in tandem to
produce excellent performance. As a result," Mr. Cotros continued, "real sales
growth for the quarter was approximately 10.0 percent after eliminating the
effects of 3.4 percent for acquisitions and about 0.03 percent food cost
inflation. This compares to 7.3 percent real sales growth in third quarter 1999
and 7.2 percent in second quarter 2000 (after adjusting for 3.3 percent and 0.5
percent, respectively, contributed by additional Wendy's International, Inc.
business, which has been in effect for over a year). For the nine months, real
sales growth was about 9.3 percent, after excluding the 2.3 percent adjustment
for acquisitions and approximately 0.3 percent food cost deflation."
Mr. Cotros noted that SYSCO's sales of its own brand products also were a
strong component in this quarter's growth. "SYSCO brand sales accounted for 50.5
percent of marketing associate-served sales in the quarter, a 2.5 percentage
point increase over the same period last year. Equally important, overall sales
to the marketing associate-served, or independent, customer segment were 54.2
percent of traditional foodservice sales, a 1.2 percentage point improvement
over the 53.0 percent in last year's third quarter."
Additionally, Mr. Cotros praised the performance of SYSCO's specialty
produce and custom-cut meat companies, all of which have been accretive to
fiscal 2000 earnings. "The synergies and sales gains realized from our specialty
companies have exceeded our initial estimates, including the performance of the
FreshPoint acquisition, which closed March 17. We are also optimistic about the
prospects and benefits of eSYSCO, our Internet ordering system, that should
provide cost savings for both our customers and our own operations and is
expected to become a tool that will allow our marketing associates to further
solidify strong customer relationships and service levels. Initiated in 1998,
this system is now processing orders, primarily from multi-unit customers, at an
annualized rate approaching $0.5 billion, based on sales during the past month."
In conclusion, Mr. Cotros remarked, "As we begin the final quarter of
fiscal 2000, we are excited and optimistic about the opportunities ahead. Our
strategies are in place and we are forging stronger relationships due to the
dedication and performance of the entire SYSCO family, benefiting not only our
customers, but also our employees, suppliers and shareholders alike."
SYSCO is the largest foodservice marketing and distribution organization in
North America. Generating projected sales in excess of $19 billion for fiscal
2000, the company provides products and services to about 325,000 to 350,000
customers, including restaurants, healthcare and educational institutions,
lodging establishments and other foodservice operations. The SYSCO distribution
network, supported by over 39,000 employees, currently extends throughout the
entire contiguous United States and Alaska, as well as portions of Canada.
Forward-Looking Statements
Certain statements made herein are forward-looking statements under the
Private Securities Litigation Reform Act of 1995. They include statements
regarding fiscal 2000 and annualized eSYSCO sales projections, industry
leadership, SYSCO's ability to realize efficiencies and cost savings and to
solidify customer relationships and service levels from new technologies. These
statements involve risks and uncertainties and are based on current expectations
and management's estimates; actual results may differ materially. Those risks
and uncertainties that could impact these statements include the risk that
eSYSCO will not prove as popular as anticipated, the risks relating to the
foodservice distribution industry's relatively low profit margins and
sensitivity to economic conditions; SYSCO's leverage and debt risks; the
successful completion and integration of acquisitions and fold-outs; the risk of
interruption of supplies due to lack of long-term contracts, severe weather,
work stoppages or otherwise; and other risk factors detailed in SYSCO's Form S-3
(File No. 333-34036) filed with the Securities and Exchange Commission on April
5, 2000.
The comparative financial data for the third quarter of fiscal years 2000
and 1999 are summarized below.
($000 omitted except for per share data)
For the 13-week Period Ended
April 1, 2000 March 27, 1999
---------------- ---------------
Sales $4,722,935 $4,164,877
Costs and expenses
Cost of sales 3,829,148 3,402,463
Operating expenses 709,499 625,111
Interest expense 18,354 18,414
Other, net 88 (93)
Total costs and expenses 4,557,089 4,045,895
Earnings before income taxes 165,846 118,982
Income taxes 63,851 46,403
Net earnings $101,995 $72,579
Basic earnings per share $0.31 $0.22
Diluted earnings per share $0.31 $0.22
Basic average shares outstanding 329,306,402 332,512,637
Diluted average shares outstanding 333,662,958 336,475,686
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The comparative financial data for the 39 weeks of fiscal year 2000 and 1999 are
summarized below.
($000 omitted except for per share data)
For the 39-week Period Ended
April 1, 2000 March 27, 1999
------------- --------------
Total Sales $14,031,504 $12,604,182
Costs and expenses
Cost of sales 11,394,346 10,298,004
Operating expenses 2,079,161 1,849,822
Interest expense 52,978 53,742
Other, net 1,653 322
Total costs and expenses 13,528,138 12,201,890
Earnings before income taxes 503,366 402,292
Income taxes 193,796 156,894
Earnings before cumulative effect
of accounting change 309,570 245,398
Cumulative effect of accounting change (8,041) ---
Net earnings $301,529 $245,398
Earnings before accounting change:
Basic earnings per share $0.94 $0.74
Diluted earnings per share $0.93 $0.73
Cumulative effect of accounting change:
Basic earnings per share $(0.02) $---
Diluted earnings per share $(0.02) $---
Net earnings:
Basic earnings per share $0.92 $0.74
Diluted earnings per share $0.90 $0.73
Basic average shares outstanding 328,893,795 333,748,999
Diluted average shares outstanding 333,790,286 337,518,140
SOURCE: SYSCO Corporation
CONTACT: Diane Day Sanders, Vice President and Treasurer of SYSCO Corporation,
281-584-1303.
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