Exhibit 99.1
NEWS RELEASE
SYSCO Corporation ------------
1390 Enclave Parkway
Houston, Texas 77077-2099
(281) 584-1390
FOR MORE INFORMATION
CONTACT: Diane Day Sanders
Vice President and Treasurer
SYSCO Posts 25th Year of Consecutive Sales and Earnings Growth With 30%
Earnings Per Share Increase for Fiscal 2001
HOUSTON, August 1, 2001 -- SYSCO Corporation (NYSE: SYY) today announced
diluted earnings per share of $0.88 on sales of $21.8 billion for the fiscal
year ended June 30, 2001, marking the 25th year of uninterrupted sales and
earnings increases. Diluted earnings per share increased 30.0 percent compared
to last year's diluted earnings per share of $0.68 prior to an accounting change
while sales increased 12.8 percent over the prior fiscal year's $19.3 billion.
Diluted earnings per share for the fourth quarter of fiscal 2001 increased
23.8 percent, or $0.26 versus $0.21 for the same period last year, and sales of
$5.8 billion were 9.8 percent greater than the $5.3 billion achieved in last
year's fourth quarter.
Internal sales growth for the quarter was 6.5 percent, composed of real
growth of 3.0 percent and food cost inflation of 3.5 percent. Acquisitions
contributed 3.3 percent to total sales growth in the final quarter. Internal
growth for the fiscal year reached 8.3 percent, which included 5.8 percent real
growth and 2.5 percent resulting from food cost inflation, while acquisitions
added 4.5 percent.
Charles H. Cotros, SYSCO's chairman and chief executive officer, said,
"SYSCO's strong performance can be attributed to a number of factors, including
continued strength in sales to marketing associate-served customers, a higher
percentage of SYSCO Brand product sales, earnings contributions from
acquisitions and productivity and efficiency measures. Our customer relationship
management initiative, C.A.R.E.S. (Customers Are Really Everything to SYSCO),
not only offers consistent quality proprietary brand products, but also provides
a full menu of value-added services to assist our customers in achieving their
goals. Our mission is to help our customers succeed. Relationships and service
are key and our customers know they can depend on us," he emphasized.
Mr. Cotros noted that SYSCO Brand products provide value to SYSCO's
customers and a significant competitive advantage to the company's sales
professionals. During the fourth quarter, SYSCO Brand sales represented 54.6
percent of marketing associate-served sales in the traditional broadline
companies as compared to 51.4 percent in last year's final quarter. Continued
growth in sales to marketing associate-served customers raised the percentage of
these sales to total broadline company sales for the fourth quarter to 57.0
percent versus 55.7 percent during last year's final quarter.
"Our broadline companies experienced an uptick in the growth of marketing
associate-served sales in June as compared to the earlier weeks of the quarter,"
added Mr. Cotros. "This trend continued into the first three weeks of the new
fiscal year with marketing associate-served sales growth at our broadline
companies increasing at double-digit levels compared to the same period last
year."
- more -
"While some segments of the foodservice industry may have seen some slowing
in growth, we believe strategies we have in place will allow us to outpace the
overall industry growth as we have historically. We remain focused on
strengthening our relationships with existing customers and building
relationships with new customers; "fold-out" organic growth as well as
acquisitions that strengthen geographic reach and product penetration;
significant capital expenditures that facilitate growth and efficiencies;
ongoing increases in the number of marketing associates; and growing SYSCO Brand
sales. We are optimistic as we enter the new fiscal year that, at a minimum, we
can achieve our long-term objectives of leveraging high single-digit real sales
growth at least five additional percentage points to earnings per share growth.
"SYSCO's long-term performance and future success are attributable to the
loyalty, competence and dedicated teamwork of our 43,000 employees, and I
commend these exceptional individuals for their contributions. We are positioned
to continue our consistent growth record by providing our customers the tools
they need to succeed in this dynamic industry, which is buoyed by consumers'
love affair and dependence upon meals-prepared-away-from-home."
SYSCO is the largest foodservice marketing and distribution organization in
North America. The company provides food and related products and services to
approximately 370,000 restaurants, healthcare and educational facilities,
lodging establishments and other foodservice customers. The SYSCO distribution
network extends throughout the contiguous United States and portions of Alaska,
Hawaii and 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, implementation and timing of
"fold-out" operations and acquisitions, capital expenditures, SYSCO's ability to
build stronger relationships with existing customers and develop new
relationships with additional foodservice operators, SYSCO's ability to outpace
overall foodservice industry growth, SYSCO's ability to achieve its long-term
objectives with respect to real sales growth and earnings per share growth, 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
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, as amended by Form 10-K/A, for the fiscal year ended July 1, 2000 as
filed with the Securities and Exchange Commission.
- more -
The comparative financial data for the fourth quarter of fiscal years 2001 and
2000 are summarized below.
($000 omitted except for per share data)
For the 13-Week Period Ended
---------------------------------------
June 30, 2001 July 1, 2000
------------- ------------
Sales $ 5,789,297 $ 5,271,764
Costs and expenses
Cost of sales 4,638,338 4,255,205
Operating expenses 849,500 764,594
Interest expense 17,843 17,854
Other, net 1,567 (131)
------------- ------------
Total costs and expenses 5,507,248 5,037,522
------------- ------------
Earnings before income taxes 282,049 234,242
Income taxes 107,884 90,183
------------- ------------
Net earnings $ 174,165 $ 144,059
============= ============
Basic earnings per share $ 0.26 $ 0.22
============= ============
Diluted earnings per share $ 0.26 $ 0.21
============= ============
Basic average shares outstanding 667,925,830 663,296,190
============= ============
Diluted average shares outstanding 679,805,029 673,272,656
============= ============
- more -
The comparative financial data for the 52 weeks of fiscal years 2001 and 2000
are summarized below.
($000 omitted except for per share data)
For the 52-Week Period Ended
---------------------------------------------
June 30, 2001 July 1, 2000
-------------- ------------
Total sales $21,784,497 $19,303,268
Costs and expenses
Cost of sales 17,513,138 15,649,551
Operating expenses 3,232,827 2,843,755
Interest expense 71,776 70,832
Other, net 101 1,522
-------------- ------------
Total costs and expenses 20,817,842 18,565,660
-------------- ------------
Earnings before income taxes 966,655 737,608
Income taxes 369,746 283,979
-------------- ------------
Earnings before cumulative
effect of accounting change 596,909 453,629
Cumulative effect of accounting change 0 (8,041)
-------------- ------------
Net earnings $ 596,909 $ 445,588
============== ============
Earnings before accounting change:
Basic earnings per share $ 0.90 $ 0.69
============== ============
Diluted earnings per share $ 0.88 $ 0.68
============== ============
Cumulative effect of accounting change:
Basic earnings per share $ 0.00 $ (0.01)
============== ============
Diluted earnings per share $ 0.00 $ (0.01)
============== ============
Net earnings:
Basic earnings per share $ 0.90 $ 0.68
============== ============
Diluted earnings per share $ 0.88 $ 0.67
============== ============
Basic average shares outstanding
665,551,228 659,164,948
============== ============
Diluted average shares outstanding 677,949,351 669,555,856
============== ============
# # #
1382556v1