EXHIBIT 99.1
NEWS RELEASE
SYSCO Corporation ------------
1390 Enclave Parkway
Houston, Texas 77077-2099
(281) 584-1390
FOR MORE INFORMATION
CONTACT: John Palizza
Assistant Treasurer
281-584-1308
SYSCO POSTS 26TH CONSECUTIVE YEAR OF RECORD SALES AND EARNINGS GAINS
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FOURTH QUARTER EPS RISES 19% ON STRONGER REAL SALES GROWTH;
20-MILLION-SHARE REPURCHASE PROGRAM ANNOUNCED
HOUSTON, JULY 31, 2002 -- SYSCO Corporation (NYSE: SYY) today announced
results for its fourth quarter of fiscal year 2002, its 105th consecutive
quarter of sales and earnings increases, and for the fiscal year ended June 29,
2002, which also marked the 26th year in a row that the company has achieved
sales and earnings increases.
FOURTH QUARTER HIGHLIGHTS:
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o Diluted earnings per share rose 19.2%, to $0.31 compared to $0.26 in
the same period last year
o Net earnings climbed 18.2% to $206 million vs. $174 million in last
year's fourth quarter
o Sales increased 9.0% to $6.3 billion vs. $5.8 billion in last year's
fourth quarter
o Real sales grew 5.2% compared to last year's fourth quarter
o Marketing associate-served sales as a percentage of traditional
broadline sales increased to 57.7% from 56.1%
o SYSCO Brand items accounted for 56.2% of marketing associate-served
sales and 48.6% of all traditional broadline company sales
FISCAL YEAR HIGHLIGHTS:
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o Diluted earnings per share increased 14.8%, to $1.01 compared to $0.88
last year
o Net earnings increased 13.9% to $680 million vs. $597 million last
year
o Sales reached $23.4 billion, a 7.2% gain compared to the $21.8 billion
last year
o Real sales grew 2.7% compared to last year
o Marketing associate-served sales as a percentage of traditional
broadline sales increased to 56.3% from 54.5%
o SYSCO Brand items accounted for 55.9% of marketing associate-served
sales and 48.3% of all traditional broadline company sales
Charles H. Cotros, SYSCO's chairman and chief executive officer, said, "I
am extremely proud of the strong performance of our company. Especially
gratifying was our robust 5.2 percent real sales growth in the final quarter of
what I consider one of the most challenging fiscal years in SYSCO's history. Our
results for fiscal 2002 are further enhanced by the fact that we are comparing
this year's results with sales and earnings increases last year that were among
the highest in SYSCO's history." Mr. Cotros also noted that food cost inflation
and acquisitions contributed 1.1 percent and 3.4 percent, respectively, to
SYSCO's 7.2 percent fiscal 2002 sales growth. For the fourth quarter food cost
deflation was 1.7 percent and acquisitions contributed 5.5 percent to SYSCO's
9.0 percent nominal sales growth.
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"Fiscal 2002 began with a recognizable slowing of the economy and was
immediately followed by the tragedies of September 11th," continued Mr. Cotros.
"We stated during that period that providing superior customer service was vital
in preserving customer relationships and would allow SYSCO to gain market share
as sales improved. Our marketing associates (MA's) provide a distinct
competitive advantage. They continue to demonstrate to our customers the quality
and benefits of SYSCO Brand products and our menu of value-added services. As
business activity strengthened during our fourth fiscal quarter it was evident
those efforts had positioned us well and produced strong results for both the
quarter and the year."
Mr. Cotros also announced that SYSCO's Board of Directors has approved the
repurchase of an additional 20 million shares of the company's stock. The Board
last approved the repurchase of 16 million shares in September 2001 and
approximately 5.6 million shares remain available for repurchase under that
authorization. The new authorization by the Board will result in a total of
approximately 25.6 million shares authorized for repurchase.
"In the last 10 years we have announced and completed all previous Board
authorized share repurchases, an investment of more than $2.4 billion for more
than 202 million shares," Mr. Cotros stated. "This 20 million share
authorization by our Board recognizes SYSCO's strong balance sheet and favorable
cash flow position as well as their confidence in management's ability to
continue to profitably grow the business for both the near- and long-term. It
also is a statement that we remain committed to a strategy of prudently
repurchasing shares."
"Our mission is to help our customers succeed," concluded Mr. Cotros. "They
depend on us daily for our superior customer service and our menu of value-added
services. The entire family of 46,000 associates are to be commended for their
commitment to our mission and for their role in SYSCO's strong performance in
fiscal 2002."
Richard J. Schnieders, SYSCO's president and chief operating officer,
added, "During fiscal 2002 our core strategies also permitted us to leverage our
strong balance sheet and cash flow position to expand our presence in North
America. We successfully grew sales while also controlling expenses, especially
in the warehouse and delivery portions of our business. The acquisition of SERCA
Food Service, Inc. enhanced our Canadian distribution network to cover all of
Canada. We also increased our U.S. presence by opening broadline fold-out
operations in Sacramento, California and Columbia, South Carolina, with another
scheduled to be operational this fall in Las Vegas. We have been pleased with
the success of the fold-out strategy and therefore will expand it to our
specialty meat locations, allowing more broadline companies to have access to
Buckhead Beef and Newport Meat premium brands."
Mr. Schnieders also stated that SYSCO has completed a preliminary
assessment of existing goodwill for impairment in accordance with Statement of
Accounting Standards (SFAS) No. 142 "Goodwill and Other Intangible Assets" which
the company intends to adopt in the first quarter of fiscal 2003. Based on this
assessment, SYSCO believes it has no impairment on its goodwill. Under SFAS No.
142, the company's goodwill will not be subject to amortization but will be
tested for impairment annually. The company's after-tax goodwill amortization
expense in fiscal 2002 was approximately $15 million, or $0.02 per share.
Mr. Schnieders concluded by saying, "We have many exciting projects and
opportunities ahead of us: initiatives to enhance supply chain efficiencies,
technology innovations and the benefits of recent acquisition integration. We
are firmly positioned to maintain our industry leadership and continue to gain
market share."
SYSCO is the largest foodservice marketing and distribution organization in
North America, providing food and related products and services to approximately
400,000 restaurants, healthcare and educational facilities, lodging
establishments and other foodservice customers. SYSCO's operations are located
throughout the United States and Canada and include broadline companies,
specialty produce, meat and hotel supply operations and SYGMA, the company's
chain restaurant distribution subsidiary. For more information about SYSCO visit
the company's Internet home page at www.sysco.com.
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The comparative financial data for the fourth quarter of fiscal years 2002 and
2001 are summarized below.
($000 omitted except for per share data) FOR THE 13-WEEK PERIOD ENDED
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JUNE 29, 2002 JUNE 30, 2001
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SALES $ 6,310,536 $ 5,789,297
Costs and expenses
Cost of sales 5,046,832 4,638,338
Operating expenses 914,900 849,500
Interest expense 16,202 17,843
Other, net (869) 1,567
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TOTAL COSTS AND EXPENSES 5,977,065 5,507,248
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EARNINGS BEFORE INCOME TAXES 333,471 282,049
Income taxes 127,553 107,884
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NET EARNINGS $ 205,918 $ 174,165
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BASIC EARNINGS PER SHARE $ 0.31 $ 0.26
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DILUTED EARNINGS PER SHARE $ 0.31 $ 0.26
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AVERAGE SHARES OUTSTANDING 657,637,781 667,925,830
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DILUTED AVERAGE SHARES OUTSTANDING 667,725,856 679,805,029
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The comparative segment sales data for the fourth quarter of fiscal years 2002
and 2001 are summarized below.
($000) FOR THE 13-WEEK PERIOD ENDED
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JUNE 29, 2002 JUNE 30, 2001
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SALES
Broadline $ 5,195,750 $ 4,752,840
SYGMA 714,460 632,371
Other 455,805 442,138
Intersegment Sales (55,479) (38,052)
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TOTAL SALES $ 6,310,536 $ 5,789,297
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The comparative financial data for the 52 weeks of fiscal years 2002 and 2001
are summarized below.
($000 omitted except for per share data) FOR THE 52-WEEK PERIOD ENDED
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JUNE 29, 2002 JUNE 30, 2001
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TOTAL SALES $23,350,504 $21,784,497
Costs and expenses
Cost of sales 18,722,163 17,513,138
Operating expenses 3,467,379 3,232,827
Interest expense 62,897 71,776
Other, net (2,805) 101
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TOTAL COSTS AND EXPENSES 22,249,634 20,817,842
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EARNINGS BEFORE INCOME TAXES 1,100,870 966,655
Income taxes 421,083 369,746
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NET EARNINGS $ 679,787 $ 596,909
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BASIC EARNINGS PER SHARE $ 1.03 $ 0.90
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DILUTED EARNINGS PER SHARE $ 1.01 $ 0.88
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AVERAGE SHARES OUTSTANDING 661,808,432 665,551,228
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DILUTED AVERAGE SHARES OUTSTANDING 673,445,783 677,949,351
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The comparative segment sales data for the 52 weeks of fiscal years 2002 and
2001 are summarized below.
($000) FOR THE 52-WEEK PERIOD ENDED
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JUNE 29, 2002 JUNE 30, 2001
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SALES
Broadline $19,163,449 $18,106,843
SYGMA 2,671,110 2,415,839
Other 1,707,229 1,377,987
Intersegment Sales (191,284) (116,172)
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TOTAL SALES $23,350,504 $21,784,497
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FORWARD-LOOKING STATEMENTS
Certain statements made herein are forward-looking statements under the
Private Securities Litigation Reform Act of 1995. They include statements
regarding SYSCO's ability to continue to profitably grow its business, potential
future share repurchases under the share repurchase program, implementation,
timing and the expected impact of "fold-out" operations and acquisitions,
enhanced supply chain efficiencies, technology and logistic applications, and
SYSCO's ability to maintain its position as industry leader and continue to gain
market share. 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 environment; 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. Share repurchases could be
affected by market prices for the Company's securities as well as management's
decision to utilize its capital for other purposes. 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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