Exhibit 99.1
SYSCO Corporation NEWS RELEASE
1390 Enclave Parkway ------------
Houston, Texas 77077-2099
(281) 584-1390
FOR MORE INFORMATION
CONTACT: Diane Day Sanders
Vice President and Treasurer
SYSCO LEVERAGES 13% SALES GROWTH TO 40% EARNINGS PER SHARE INCREASE
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HOUSTON, APRIL 18, 2001 -- SYSCO Corporation (NYSE: SYY), North America's
largest foodservice marketer and distributor, today announced a 40 percent
increase in earnings per diluted share to $0.21 for the fiscal 2001 third
quarter ended March 31, 2001. This compares to $0.15 per diluted share for the
same period last year. Sales for the quarter rose 13.2 percent to $5.3 billion,
compared to the $4.7 billion reported for the third quarter of fiscal 2000. Net
earnings of $139.4 million represented a gain of 37 percent over last year's
third quarter net earnings of $102.0 million.
Diluted earnings per share for the first nine months of fiscal 2001
increased 35 percent to $0.62 compared to earnings per share of $0.46 for the
first nine months of fiscal 2000 prior to an accounting charge that occurred
during the first quarter of fiscal 2000. Sales for the 39 weeks ended March 31,
2001 were $16.0 billion, 14 percent higher than the $14.0 billion in sales
attained through the end of the third quarter the previous year. Net earnings
for the first nine months of fiscal 2001 were $422.7 million, 36.6 percent
higher than the $309.6 million before the accounting change for the same period
a year earlier.
Charles H. Cotros, SYSCO's chairman and chief executive officer, said,
"Excellent earnings leverage across our operations, as well as the unsurpassed
commitment to supreme customer service by our nearly 43,000 SYSCO employees,
generated strong financial results for the third quarter. Sales gains in both
the marketing associate-served and the multi-unit customer bases, the continued
strength and recognition of SYSCO Brand and the competitive advantages and
operating efficiencies gained from our technology investments all contributed to
third quarter results."
Mr. Cotros commented further that sales to the marketing associate-served,
or independent, customers represented 54.1 percent of traditional foodservice
sales for the quarter compared to 53.2 percent for the comparable quarter last
year. In addition, SYSCO Brand sales represented 53.6 percent of marketing
associate-served sales for the quarter as opposed to 50.4 percent during the
third quarter of fiscal 2000.
"The harsh winter weather that typically accompanies our third fiscal
quarter impacted sales and expenses somewhat, especially in the Northeast and
Midwest. This compares to a particularly mild winter quarter last year when we
reported a 41 percent increase in earnings per share and real sales growth of 10
percent," added Mr. Cotros. "However, our operating companies in other regions
continued to generate strong sales volume, resulting in real sales growth for
the quarter of 5.0 percent after adjusting 5.2 percent for acquisitions and 3.0
percent for food cost inflation. Year-to-date real sales growth was 6.9 percent,
excluding 5.0 percent for acquisitions and a 2.1 percent increase in food costs.
Inflation has been trending upward throughout the year, and the third quarter
rate is attributable primarily to the rising cost of dairy, fresh and frozen
meats, produce, paper and disposable products.
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"Our strategy of acquiring companies that provide a geographic or product
niche continued in the third quarter with the acquisition of Guest Supply, Inc.,
a specialty distributor to the hospitality and lodging industry, and the
addition of five custom-cutting meat operations from The Freedman Companies,"
continued Mr. Cotros. "These operations, as well as the specialty meat and
produce companies acquired in the past, are accretive to earnings and are
proving successful in our efforts toward exceeding customers' expectations and
becoming a one-stop-shop for foodservice operators. The pending acquisition of
Canadian broadliner HRI Supply is expected to close next month.
"In addition, our internal growth strategy through the construction of
"fold-out" companies continues to provide positive results. We will begin
supplying customers from Sysco Food Services of Hampton Roads in Suffolk,
Virginia in late May. The Sacramento, California operation is scheduled for
completion in the fall of this year. The "fold-outs" in Columbia, South Carolina
and Las Vegas, Nevada announced earlier this fiscal year should be operational
in the first quarter and second quarter of calendar year 2002, respectively."
In conclusion, Mr. Cotros remarked, "We began the final quarter of fiscal
2001 with a record sales week and will continue our efforts to build stronger
relationships with our existing customers while striving to develop new
relationships with additional foodservice operators. The
meals-prepared-away-from-home market continues to be strong, propelled by
consumers who rely on foodservice operators to fulfill their dining needs while
managing the demands of family, work and recreational schedules. We are
committed to helping foodservice operators meet their customers' demands and
become more successful."
SYSCO is the largest foodservice marketing and distribution organization in
North America. Generating sales of approximately $20.6 billion for calendar year
2000, the company provides food and related products and services to
approximately 356,000 restaurants, healthcare and educational facilities,
lodging establishments and other foodservice customers. The SYSCO distribution
network extends throughout the entire continental United States, Alaska, the
District of Columbia, Hawaii and 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 continued strength and recognition of SYSCO Brand products, industry
growth, continued competitive advantages and operating efficiencies from
technology investments, implementation and timing of "fold-out" operations and
acquisitions, SYSCO's ability to build stronger relationships with existing
customers and develop new relationships with additional foodservice operators,
and the continued strength of the meals-prepared-away-from-home market. These
statements involve risks and uncertainties and are based on management's current
expectations and estimates; actual results may differ materially. Those risks
and uncertainties that could impact these statements include the risks relating
to the foodservice distribution industry's relatively low profit margins and
sensitivity to general economic conditions; SYSCO's leverage and debt risks; the
successful completion of acquisitions and integration of acquired companies; the
possibility that the Company's information systems will not operate as
anticipated and therefore not provide the company with the expected competitive
edge, the risk of interruption of supplies due to lack of long-term contracts,
severe weather, work stoppages or otherwise; and internal factors such as the
ability to control expenses. In addition, the decision to pursue acquisitions
and "fold-outs" could vary due to construction schedules and the timing of other
expenditures, while the implementation and timing of "fold-out" operations and
acquisitions could be impacted by competitive conditions, labor issues, weather,
satisfactory completion of due diligence and other matters. For a discussion of
additional factors that could cause actual results to differ from those
described in the forward-looking statements, see the Company's Annual Report on
Form 10-K for the fiscal year ended July 1, 2000 as filed with the Securities
and Exchange Commission.
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1351534
The comparative financial data for the third quarter of fiscal years 2001 and
2000 are summarized below.
($000 omitted except for per share data)
FOR THE 13-WEEK PERIOD ENDED
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MARCH 31, 2001 APRIL 1, 2000
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Sales $ 5,344,496 $ 4,722,935
Costs and expenses
Cost of sales 4,301,029 3,829,148
Operating expenses 800,156 709,499
Interest expense 18,498 18,354
Other, net (879) 88
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Total costs and expenses 5,118,804 4,557,089
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Earnings before income taxes 225,692 165,846
Income taxes 86,327 63,851
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Net earnings $ 139,365 $ 101,995
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Basic earnings per share $ 0.21 $ 0.15
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Diluted earnings per share $ 0.21 $ 0.15
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Basic average shares outstanding 666,107,144 658,612,804
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Diluted average shares outstanding 677,731,150 667,325,916
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The comparative financial data for the first 39 weeks of fiscal years 2001 and
2000 are summarized below.
($000 omitted except for per share data)
FOR THE 39-WEEK PERIOD ENDED
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MARCH 31, 2001 APRIL 1, 2000
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Total sales $ 15,995,200 $ 14,031,504
Costs and expenses
Cost of sales 12,874,800 11,394,346
Operating expenses 2,383,327 2,079,161
Interest expense 53,933 52,978
Other, net (1,466) 1,653
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Total costs and expenses 15,310,594 13,528,138
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Earnings before income taxes 684,606 503,366
Income taxes 261,862 193,796
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Earnings before cumulative
effect of accounting change 422,744 309,570
Cumulative effect of accounting change 0 (8,041)
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Net earnings $ 422,744 $ 301,529
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Earnings before accounting change:
Basic earnings per share $ 0.64 $ 0.47
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Diluted earnings per share $ 0.62 $ 0.46
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Cumulative effect of accounting change:
Basic earnings per share $ 0.00 $ (0.01)
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Diluted earnings per share $ 0.00 $ (0.01)
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Net earnings:
Basic earnings per share $ 0.64 $ 0.46
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Diluted earnings per share $ 0.62 $ 0.45
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Basic average shares outstanding 664,748,107 657,787,590
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Diluted average shares outstanding 676,663,476 667,580,572
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