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 INCREASES EARNINGS PER SHARE 14 PERCENT ON 9 PERCENT SALES
GROWTH FOR FIRST QUARTER FISCAL 2002
HOUSTON, October 17, 2001 -- SYSCO Corporation (NYSE: SYY) today announced
diluted earnings per share of $0.24 for the 13 weeks ended September 29, 2001.
This represents a 14 percent gain over a particularly strong quarter last year,
during which earnings per share increased 34 percent to $0.21 (on a post-split
basis) for the initial quarter of fiscal 2001. First quarter 2002 sales were
$5.83 billion, a 9 percent increase in comparison to the $5.36 billion posted
during the same period last year.
Charles H. Cotros, SYSCO's chairman and chief executive officer, said, "We
are very pleased with SYSCO's first quarter 2002 earnings performance,
particularly in light of the recent softness in the economy and the tragic
events of September 11. Historically, during periods of lower industry growth
and slowing economic conditions, SYSCO has outperformed the industry and gained
market share through sound strategies and prudent financial management.
"Following the attacks on the United States and the events that unfolded in
the ensuing weeks, there was understandably a period of confusion and
uncertainty in our country and in the entire world," Mr. Cotros continued. "The
reduced demand experienced by some of our customers -- specifically hotel,
resort and convention businesses that rely on air transportation -- impacted
certain of our operating companies. SYSCO's financial results are a tribute to
the managers and associates in our operations who performed admirably in
responding to customers throughout this crisis. Toward the end of the quarter,
overall sales trends at our operating companies began to firm and have continued
to improve each week thereafter as people began to return to normality."
Mr. Cotros added that SYSCO's internal growth for the first fiscal quarter
was 5.32 percent, composed of 1.65 percent real sales growth and 3.67 percent
food cost inflation. Acquisitions contributed 3.42 percent to total sales growth
in the first quarter. This compares to 8.16 percent real sales growth, 1.69
percent food cost inflation and 5.25 percent acquisition effect reported for the
first quarter of fiscal 2001.
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Mr. Cotros also noted the continued success of SYSCO Brand product sales,
which accounted for 55.5 percent of marketing associate-served sales for the
quarter, as compared to 52.6 percent during last year's first quarter. Sales to
marketing associate-served customers, those independent foodservice operators
supported by the knowledge and expertise of SYSCO's approximately 7,700
marketing associates, increased to 57.2 percent of broadline sales for the first
quarter compared to 55.6 percent in the first quarter of fiscal 2001. Also
during the quarter, a "fold-out" operation in Sacramento, California began
shipping to customers and construction progressed on facilities in Las Vegas,
Nevada and Columbia, South Carolina.
"We remain bullish on our industry and our business," he concluded, "and
our growth and investment strategies remain intact. We are aggressively pursuing
market share, investing in the future of our business and continuing our
commitment to increase the ranks of our sales professionals. We continue to seek
appropriate acquisition candidates and expand our warehouse and distribution
capabilities to effectively serve our customers as the need arises. In difficult
times like these, our marketing associates become even more important to our
customers as they assist them with inventory and cost controls and help them
create new avenues to succeed in their endeavors. We are confident that the
strategies we have in place and the numerous value-added services we can offer
will help our customers operate their businesses more efficiently and
successfully, while generating the blueprint for our own success."
SYSCO is the largest foodservice marketing and distribution organization in
North America. For the fiscal year that ended June 30, 2001, the company
reported sales of $21.8 billion. SYSCO 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 success of SYSCO Brand product sales, implementation and
timing of "fold-out" operations and acquisitions, expansion of warehouse and
distribution capabilities, increasing sales staff, foodservice industry growth,
sales trends, SYSCO's ability to outperform the foodservice industry and gain
market share and SYSCO's ability to achieve its long-term growth objectives.
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, including the current
economic downturn; 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 for the
fiscal year ended June 30, 2001 as filed with the Securities and Exchange
Commission.
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The comparative financial data for the first quarter of fiscal years 2002 and
2001 are summarized below.
($000 omitted except for per share data)
For the 13-Week Period Ended
----------------------------
September 29, 2001 September 30, 2000
------------------------- -------------------------
Sales $ 5,828,678 $ 5,360,174
Costs and expenses
Cost of sales 4,683,617 4,322,784
Operating expenses 864,456 787,497
Interest expense 15,864 17,401
Other, net (769) (633)
------------------------- -------------------------
Total costs and expenses 5,563,168 5,127,049
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Earnings before income taxes 265,510 233,125
Income taxes 101,558 89,170
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Net earnings $ 163,952 $ 143,955
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Basic earnings per share $ 0.25 $ 0.22
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Diluted earnings per share $ 0.24 $ 0.21
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Basic average shares outstanding 666,765,148 664,051,868
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Diluted average shares outstanding 677,916,766 674,185,530
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Note: All share information has been adjusted for the 2-for-1 stock split of
December 15, 2000.
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