-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, DeDy99CWrL65JLy+j8V/pIRUqcH6yTKG2iyis6PJhYsjrLj5hi+t2XdPwapl8VrS wcsCaTxFAi+MRpOfJespVA== 0000096021-94-000009.txt : 19940519 0000096021-94-000009.hdr.sgml : 19940519 ACCESSION NUMBER: 0000096021-94-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940402 FILED AS OF DATE: 19940516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYSCO CORP CENTRAL INDEX KEY: 0000096021 STANDARD INDUSTRIAL CLASSIFICATION: 5140 IRS NUMBER: 741648137 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06544 FILM NUMBER: 94528745 BUSINESS ADDRESS: STREET 1: 1390 ENCLAVE PKWY CITY: HOUSTON STATE: TX ZIP: 77077 BUSINESS PHONE: 7135841390 10-Q 1 3ND QUARTER 10-Q Page 1 of 11 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 2, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 1-6544 SYSCO CORPORATION (Exact name of registrant as specified in its charter) Delaware 74-1648137 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 1390 Enclave Parkway Houston, Texas 77077-2099 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (713) 584-1390 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] 183,608,896 shares of common stock were outstanding as of May 6, 1994. 2 PART I. FINANCIAL INFORMATION --------------------------------------------------- Item 1. Financial Statements The following consolidated financial statements have been prepared by the Company, without audit, with the exception of the July 3, 1993 consolidated balance sheet which was taken from the audited financial statements included in the Company's Fiscal 1993 Annual Report on Form 10-K. The financial statements include consolidated balance sheets, consolidated results of operations and consolidated cash flows. Certain amounts in the prior year have been reclassified to conform to the current presentation. In the opinion of management, all adjustments, which consist of normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows for all periods presented, have been made. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Fiscal 1993 Annual Report on Form 10- K. A review of the financial information herein has been made by Arthur Andersen & Co., independent public accountants, in accordance with established professional standards and procedures for such a review. A letter from Arthur Andersen & Co. concerning their review is included as Exhibit 15. 3 SYSCO CORPORATION and its Consolidated Subsidiaries CONSOLIDATED BALANCE SHEETS (In Thousands Except for Share Data)
April 2, July 3, March 27, 1994 1993 1993 ----------- --------- ----------- (Unaudited) (Audited) (Unaudited) ASSETS ---------- Current assets: Cash $ 64,128 $ 68,759 $ 67,955 Accounts and notes receivable, less allowances of $33,046, $15,122 and $28,747 859,284 770,553 745,669 Inventories 612,534 534,167 547,300 Deferred taxes 36,026 28,878 28,232 Prepaid expenses 22,097 17,379 22,391 ---------- ---------- ---------- Total current assets 1,594,069 1,419,736 1,411,547 Plant and equipment at cost, less depreciation 801,794 759,857 760,011 Goodwill and intangibles, less amortization 263,603 267,056 269,115 Other assets 112,675 83,394 78,861 ---------- ---------- ---------- Total assets $2,772,141 $2,530,043 $2,519,534 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Current liabilities: Notes payable $ 27,903 $ 6,609 $ 19,836 Accounts payable 647,512 550,507 558,327 Accrued expenses 163,191 159,056 154,952 Accrued income taxes 30,221 26,929 16,802 Current maturities of long-term debt 6,307 3,372 2,526 ---------- --------- ---------- Total current liabilities 875,134 746,473 752,443 Long-term debt 512,332 494,062 458,110 Deferred taxes 173,776 152,292 147,697 Shareholders' equity Preferred stock, par value $1 per share: Authorized 1,500,000 shares; issued none --- --- --- Common stock, par value $1 per share: Authorized 500,000,000 shares; issued 191,293,725, 191,293,725 and 191,293,481 shares 191,294 191,294 191,293 Paid-in capital 61,446 74,158 75,815 Retained earnings 1,149,860 1,043,057 990,360 ---------- ---------- ---------- 1,402,600 1,308,509 1,257,468 Less cost of treasury stock, 7,457,639, 6,836,329 and 3,871,472 shares 191,701 171,293 96,184 ---------- ---------- ---------- Total shareholders' equity 1,210,899 1,137,216 1,161,284 ---------- ---------- ---------- Total liabilities and shareholders' equity $2,772,141 $2,530,043 $2,519,534 ========== ========== ========== Note: The July 3, 1993 balance sheet has been taken from the audited financial statements at that date.
4 SYSCO CORPORATION and its Consolidated Subsidiaries CONSOLIDATED RESULTS OF OPERATIONS (Unaudited) (In Thousands Except for Share Data)
39-Week Period Ended 13-Week Period Ended ---------------------------- -------------------------- April 2, March 27, April 2, March 27, 1994 1993 1994 1993 ------------ ------------ ------------ ------------ Sales $ 8,060,610 $ 7,207,498 $ 2,684,854 $ 2,399,326 Costs and expenses Cost of sales 6,613,160 5,917,931 2,209,780 1,968,664 Operating expenses 1,165,433 1,039,215 391,844 351,825 Interest expense 27,898 28,746 7,949 9,369 Other income, net (1,630) (1,331) (496) (661) ------------ ----------- ------------ ----------- Total costs and expenses 7,804,861 6,984,561 2,609,077 2,329,197 ------------ ----------- ------------ ----------- Earnings before income taxes 255,749 222,937 75,777 70,129 Income taxes 106,432 86,945 30,083 27,350 ------------ ------------ ------------ ----------- Net earnings $ 149,317 $ 135,992 $ 45,694 $ 42,779 ============ ============ ============ ============ Average number of shares outstanding 184,624,948 187,068,330 184,201,317 188,307,148 ============ ============ ============ ============ Earnings per share $ 0.81 $ 0.73 $ 0.25 $ 0.23 ============ ============ ============ ============ Dividends paid per common share $ 0.23 $ 0.19 $ 0.09 $ 0.07 ============ ============ ============ ============
5 SYSCO CORPORATION and its Consolidated Subsidiaries CONSOLIDATED CASH FLOWS - (Unaudited) (In Thousands)
39- Week Period Ended ------------------------ April 1, March 27, 1994 1993 -------- ---------- Operating activities: Net earnings $149,317 $ 135,992 Add non-cash items: Depreciation and amortization 88,961 79,761 Interest on Liquid Yield Option Notes 4,273 6,481 Deferred tax provision 13,784 9,317 Provision for losses on accounts receivable 14,346 12,449 Additional investment in net current assets over liabilities: (Increase) in receivables (85,751) (76,434) (Increase) in inventories (68,822) (51,247) (Increase) in prepaid expenses (2,111) (7,876) Increase in accounts payable 88,916 61,897 Increase in accrued expenses 2,658 9,040 Increase in accrued income taxes 3,131 10,751 (Increase) in other assets (33,514) (25,761) -------- -------- Net cash provided by operating activities 175,188 164,370 -------- -------- Investing activities: Additions to plant and equipment (117,494) (102,922) Sales and retirements of plant and equipment 1,976 4,554 Acquisitions of businesses, net of cash acquired (11,897) (10,700) Proceeds from sale of business --- 10,878 -------- -------- Net cash used for investing activities (127,415) (98,190) -------- -------- Financing activities: Bank and commercial paper borrowings 34,451 57,786 Other debt repayments (8,983) (8,457) Common stock reissued from treasury 19,354 13,638 Treasury stock purchases (54,712) (99,849) Dividends paid (42,514) (35,697) -------- -------- Net cash used for financing activities (52,404) (72,579) -------- -------- (Decrease) in cash (4,631) (6,399) Cash at beginning of period 68,759 74,354 -------- -------- Cash at end of period $ 64,128 $ 67,955 ======== ======== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 26,022 $ 24,481 Income taxes 91,341 67,680
6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources ------------------------------- The liquidity and capital resources discussion included on page 11 of the Company's Fiscal 1993 Annual Report on Form 10-K remains applicable, other than the common stock repurchase program described below. In September 1993, the number of common shares authorized to be purchased was increased by an additional 10,000,000 shares. As was the case with the previous 8,000,000 share repurchase program completed in June 1993, the Fiscal 1994 program will be utilized primarily to offset shares issued in conjunction with various employee benefit plans and future conversions of Liquid Yield Option Notes. As of the end of the third quarter, 2,000,000 shares have been purchased in conjunction with the Fiscal 1994 program. Results of Operations --------------------- Sales and cost of sales increased 12% during the 39 weeks and in the third quarter of Fiscal 1994 over comparable periods of the prior year. Operating expenses for the periods presented remained approximately the same as a percent of sales. Because of the severe winter weather during this quarter, the overall foodservice industry growth was diminished and sales increases for a number of SYSCO operating companies fell below their original expectations. In addition, operating pretax margins of the weather-impacted companies were negatively affected by the adverse conditions. A precise measurement of the impact on earnings cannot be made. Interest expense in the current periods declined from the prior periods primarily due to the expiration of the interest rate swap in December 1993. Income taxes includes a $4.9 million provision relating to the retroactive impact of recently enacted federal tax legislation. Excluding this charge, the effective tax rate for the current periods was 39.7% compared to 39% for the prior year, reflecting the federal tax rate increase to 35% from 34%. Increases in pretax earnings, net earnings and earnings per share for the periods shown resulted from a combination of the above factors. 7 PART II. OTHER INFORMATION ------------------------- Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 11, Statement re computation of per share earnings. Exhibit 15, Letter from Arthur Andersen & Co. dated May 6, 1994, re unaudited financial statements. (b) No reports on Form 8-K have been filed during the quarter for which this report is filed. 8 SIGNATURES ------------------ Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SYSCO CORPORATION (Registrant) By /s/ JOHN K. STUBBLEFIELD, JR. ----------------------------- John K. Stubblefield, Jr. Sr. Vice President & Controller (Chief Accounting Officer) Date: May 6, 1994 9 EXHIBIT INDEX ---------------------- SEQUENTIAL NO. DESCRIPTION PAGE NUMBER - - ----- ----------------------------------------- ------------- 11 SYSCO Corporation and Its Consolidated Subsidiaries statement re computation of per share earnings 10 15 Letter from Arthur Andersen & Co. dated May 6, 1994, re unaudited financial statements 11 EX-11 2 EXHIBIT 11 EPS COMP 10 Exhibit 11 SYSCO CORPORATION AND ITS CONSOLIDATED SUBSIDARIES STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
39-Week Period Ended 13-Week Period Ended -------------------------------- ----------------------------- April 2, 1994 March 27, 1993 April 2, 1994 March 27, 1993 ------------- -------------- ------------- -------------- Calculation of Primary Earnings Per Share: - - ----------------------------------------- Net earnings applicable to common stock $ 149,317,000 $ 135,992,000 $ 45,694,000 $ 42,779,000 ============= ============= ============= ============= Average number of common shares and common stock equivalents outstanding 184,624,948 187,068,330 184,201,317 188,307,148 Dilutive effect of stock options (1) --- --- --- --- ------------- ------------- ------------- ------------ 184,624,948 187,068,330 184,201,317 188,307,148 ============= ============= ============= ============ Primary earnings per share $ 0.81 $ 0.73 $ 0.25 $ 0.23 ============= ============= ============= ============ Calculation of Fully Diluted Earnings Per Share: - - ------------------------------------------------ Net earnings applicable to common stock $ 149,317,000 $ 135,992,000 $ 45,694,000 $ 42,779,000 ============= ============= ============= ============ Average number of shares outstanding on a fully diluted basis - same as for calculation of primary earnings per share 184,624,948 187,068,330 184,201,317 188,307,148 Dilutive effect of stock options and Liquid Yield Option Notes (2) --- --- --- --- ------------- ------------- ------------- ------------ 184,624,948 187,068,330 184,201,317 188,307,148 ============= ============= ============= ============ Fully diluted earnings per share $ 0.81 $ 0.73 $ 0.25 $ 0.23 ============= ============= ============= ============ (1) Maximum possible dilutive effect of outstanding options in each period is less than 3%. (2) Maximum possible dilutive effect of outstanding options and Liquid Yield Option Notes during each period is less than 3%.
EX-15 3 AA LETTER 11 Exhibit 15 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors and Shareholders of Sysco Corporation: We have reviewed the consolidated balance sheets of Sysco Corporation (a Delaware corporation) and subsidiaries as of April 2, 1994, and the related consolidated statements of results of operations and cash flows for the thirteen week and thirty-nine week periods then ended included in the Company's Quarterly Report on Form 10-Q. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with generally accepted accounting principles. /s/ ARTHUR ANDERSEN & CO. Houston, Texas May 6, 1994 -----END PRIVACY-ENHANCED MESSAGE-----