-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nn9z6+QMZ4vNz9U6WWhuSeQVMMH4M36NNKPiQ7wTn5RNo2LxNDHF2TMBwzSrQcCO Z/WqHoMv2dXHVZ1ZH4KqPg== 0000914062-03-000067.txt : 20030127 0000914062-03-000067.hdr.sgml : 20030127 20030127100334 ACCESSION NUMBER: 0000914062-03-000067 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030127 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030127 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYSCO CORP CENTRAL INDEX KEY: 0000096021 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & RELATED PRODUCTS [5140] IRS NUMBER: 741648137 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06544 FILM NUMBER: 03525010 BUSINESS ADDRESS: STREET 1: 1390 ENCLAVE PKWY CITY: HOUSTON STATE: TX ZIP: 77077 BUSINESS PHONE: 2815841390 8-K 1 sysco8k103.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 27, 2003 SYSCO CORPORATION (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation) 1-06544 74-1648137 (Commission File Number) (IRS Employer Identification No.) 1390 Enclave Parkway, Houston, Texas 77077-2099 (Address of principal executive offices, including zip code) (281) 584-1390 (Registrant's telephone number, including area code) -------------------------------- (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS. On January 27, 2003, Sysco Corporation ("SYSCO") issued a press release announcing its results of operations for the second quarter ended December 28, 2002. SYSCO hereby incorporates by reference herein the information set forth in its Press Release dated January 27, 2003, a copy of which is attached hereto as Exhibit 99.1. Except for the historical information contained in this report, the statements made by SYSCO are forward looking statements that involve risks and uncertainties. All such statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. SYSCO's future financial performance could differ significantly from the expectations of management and from results expressed or implied in the Press Release. For further information on other risk factors, please refer to the "Risk Factors" contained in SYSCO's Annual Report on Form 10-K for the fiscal year ended June 29, 2002 as filed with the Securities and Exchange Commission. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements. Not applicable. (b) Pro Forma Financial Information. Not applicable. (c) Exhibits. Exhibit Number Description -------------- ----------- 99.1 Press Release dated January 27, 2003 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, SYSCO has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SYSCO CORPORATION Date: January 27, 2003 By: /s/ John K. Stubblefield, Jr. ----------------------------------- Name: John K. Stubblefield, Jr. Title: Executive Vice President, Finance and Administration 3 EXHIBIT INDEX Exhibit Number Description Page - -------------- ----------- ---- 99.1 Press Release dated January 27, 2003 5 EX-99.1 3 sysco8k103ex99.txt PRESS RELEASE EXHIBIT 99.1 SYSCO Corporation NEWS RELEASE 1390 Enclave Parkway ------------ Houston, Texas 77077-2099 (281) 584-1390 FOR MORE INFORMATION CONTACT: John Palizza Assistant Treasurer 281-584-1308 SYSCO ACHIEVES 16.7% RISE IN SECOND QUARTER EPS HOUSTON, JANUARY 27, 2003 -- SYSCO Corporation (NYSE: SYY), North America's largest foodservice marketer and distributor, today announced results for its second quarter of fiscal year 2003 ended December 28, 2002. SECOND QUARTER HIGHLIGHTS: - --------------------------- o Diluted earnings per share rose 16.7% to $0.28 compared to $0.24 in the same period last year o Net earnings increased 16.4% to $185 million vs. $159 million in last year's second quarter o Sales for the quarter grew 13.6% to $6.3 billion vs. $5.6 billion last year o Real sales growth for the second quarter was 7.6% o Marketing associate-served sales as a percentage of traditional broadline sales increased to 54.7% from 54.1% in the same period last year o SYSCO Brand items accounted for 54.7% of marketing associate-served sales and 48.7% of all traditional broadline company sales Commenting on the second quarter, Richard J. Schnieders, who became SYSCO's fifth chairman and chief executive officer on January 1, 2003, said, "The sales acceleration we experienced during the first quarter of fiscal 2003 continued into the second quarter, boosting market share gains. Of particular note, sales to marketing associate-served customers, who are principally independent foodservice operators, increased 12.7 percent compared to last year's second quarter. "Real sales growth of 7.6 percent for the quarter was SYSCO's best result in the last eight quarters," continued Mr. Schnieders. "In addition, real sales increased sequentially throughout calendar year 2002, reflecting the soundness of our growth strategies." The second quarter real sales increase of 7.6 percent is adjusted for 0.9 percent food cost deflation and excludes 6.8 percent of sales growth from recently acquired companies. Mr. Schnieders concluded his remarks by emphasizing the success SYSCO enjoyed in expense control, resulting in a 20 basis point decline in expenses as a percent to sales. "During the second quarter many of our important expense metrics improved, including pieces per stop, lines per stop, pieces per trip and pieces per mile. Each contributed to excellent expense control, as did the continued success of the SYSCO Order Selector (SOS), a unique, finger-mounted unit that assists warehouse associates in selecting the correct products for each customer's order. The SOS system, which is being rolled out at all broadline companies, is currently used in 21 of our operations. The system significantly increases order accuracy and productivity, both of which ultimately benefit SYSCO and our customers through expense reduction and increased service levels." - more - 5 In reviewing the second quarter, Thomas E. Lankford, who succeeded Mr. Schnieders as SYSCO's president and chief operating officer on January 1, 2003, stated that the quarter was marked by a number of transactions designed to position SYSCO for future growth. "SYSCO acquired four unique foodservice operations during the second quarter. These include broadline distributor Abbott Food Service; Asian Foods, a company that specializes in products for the Asian restaurant market niche; Canada-based Pronamics, Inc., a quickservice restaurant chain distribution specialist; and the purchase of certain assets of the Denver operations of Marriott Distribution Services, Inc. Each provided either the additional geographic coverage we desired and/or also allowed us to strengthen our offerings to select niche foodservice markets." Mr. Lankford added that SYSCO purchased land in Front Royal, Virginia, and commenced construction of the company's Northeast Redistribution Center. This warehouse, which is expected to be operational by the summer of 2004, will receive and redistribute food and food-related products to 14 SYSCO operating companies in the northeast. SYSCO expects to achieve transportation and handling savings and improve inventory flow, storage and handling methods through the use of this and future redistribution warehouses, which will create a more efficient supply chain. "Other events included the signing of an agreement to acquire land for the construction of a broadline fold-out in the area just north of Los Angeles, as well as finalizing our activities for the opening of a specialty meat company fold-out in East Plainfield, New Jersey, this month," Mr. Lankford continued. "Our capital investments are producing the expected results, and combined with the daily activities of our 48,000 associates, have led to our 107th consecutive quarter of earnings increases. We remain confident that our strategies will continue to position us to lead our growing industry." SYSCO is the largest foodservice marketing and distribution organization in North America, generating sales of $24.7 billion for calendar year 2002. The company's 149 distribution locations in the United States and Canada provide food and related products and services to approximately 415,000 restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers. For more information about SYSCO visit the company's Internet home page at www.sysco.com. 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, gain market share, control or reduce expenses, increase operating efficiencies and achieve real sales growth. 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 fold-outs and integration of acquired companies; the risk of interruption of supplies due to lack of long-term contracts, severe weather, work stoppages or otherwise; the ability of the redistribution warehouse to achieve expected efficiencies; and internal factors such as the ability to control expenses. 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 29, 2002 as filed with the Securities and Exchange Commission. - more - 6 SYSCO CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In Thousands Except for Share Data)
For the 13-Week Period Ended ----------------------------------------------------- December 28, 2002 December 29, 2001 --------------------- ----------------- Sales $ 6,348,797 $ 5,590,966 Costs and expenses Cost of sales 5,097,716 4,481,655 Operating expenses 937,290 836,355 Interest expense 17,503 16,513 Other, net (2,606) (290) --------------------- ----------------- Total costs and expenses 6,049,903 5,334,233 --------------------- ----------------- Earnings before income taxes 298,894 256,733 Income taxes 114,327 98,200 --------------------- ----------------- Net earnings $ 184,567 $ 158,533 ===================== ================= Basic earnings per share $ 0.28 $ 0.24 ===================== ================= Diluted earnings per share $ 0.28 $ 0.24 ===================== ================= Average shares outstanding 652,030,164 661,959,339 ===================== ================= Diluted average shares outstanding 664,083,274 671,799,409 ===================== =================
The comparative segment sales data for the second quarter of fiscal years 2003 and 2002 are summarized below.
For the 13-Week Period Ended (Unaudited) ------------------------------------------------ December 28, 2002 December 29, 2001 ----------------- ----------------- Sales (In Thousands) Broadline $ 5,227,677 $ 4,575,700 SYGMA 710,334 657,427 Other 410,786 357,839 ----------------- ----------------- Total sales $ 6,348,797 $ 5,590,966 ================= =================
- more - 7 SYSCO CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In Thousands Except for Share Data)
For the 26-Week Period Ended ------------------------------------------------ December 28, 2002 December 29, 2001 ----------------- ----------------- Sales $ 12,773,219 $ 11,419,644 Costs and expenses Cost of sales 10,252,420 9,165,272 Operating expenses 1,897,925 1,700,811 Interest expense 34,331 32,377 Other, net (6,018) (1,059) ----------------- ----------------- Total costs and expenses 12,178,658 10,897,401 ----------------- ----------------- Earnings before income taxes 594,561 522,243 Income taxes 227,420 199,758 ----------------- ----------------- Net earnings $ 367,141 $ 322,485 ================= ================= Basic earnings per share $ 0.56 $ 0.49 ================= ================= Diluted earnings per share $ 0.55 $ 0.48 ================= ================= Average shares outstanding 653,240,266 664,361,281 ================= ================= Diluted average shares outstanding 664,304,371 675,082,031 ================= =================
The comparative segment sales data for the first 26 weeks of fiscal years 2003 and 2002 are summarized below.
For the 26-Week Period Ended (Unaudited) ------------------------------------------------ December 28, 2002 December 29, 2001 ----------------- ----------------- Sales (In Thousands) Broadline $ 10,548,934 $ 9,378,633 SYGMA 1,419,918 1,307,725 Other 804,367 733,286 ----------------- ----------------- Total sales $ 12,773,219 $ 11,419,644 ================= =================
- more - 8 SYSCO CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) (In Thousands)
December 28, 2002 December 29, 2001 ----------------- ----------------- Current assets Cash $ 128,574 $ 115,843 Receivables 1,878,315 1,612,464 Inventories 1,270,604 1,076,884 Deferred taxes - 95,654 Prepaid expenses 63,286 54,650 ----------------- ----------------- Total current assets 3,340,779 2,955,495 Plant and equipment at cost, less depreciation 1,804,691 1,620,462 Other assets Goodwill and intangibles 1,055,271 779,971 Restricted cash 84,056 - Other 199,190 186,951 ----------------- ----------------- Total other assets 1,338,517 966,922 ----------------- ----------------- Total assets $ 6,483,987 $ 5,542,879 ================= ================= Current liabilities Notes payable $ 64,612 $ 27,653 Accounts payable 1,408,475 1,237,374 Accrued expenses 747,303 571,474 Accrued income taxes 25,462 94,199 Deferred taxes 158,719 - Current maturities of long-term debt 22,341 12,564 ----------------- ----------------- Total current liabilities 2,426,912 1,943,264 Other liabilities Long-term debt 1,394,647 1,078,573 Deferred taxes 461,312 335,867 ----------------- ----------------- Total other liabilities 1,855,959 1,414,440 Shareholders' equity Common stock, par $l per share 765,175 765,175 Paid-in capital 240,170 214,202 Retained earnings 3,105,487 2,644,005 Other comprehensive loss (65,435) (5,624) Treasury stock (1,844,281) (1,432,583) ----------------- ----------------- Total shareholders' equity 2,201,116 2,185,175 ----------------- ----------------- Total liabilities and shareholders' equity $ 6,483,987 $ 5,542,879 ================= =================
- more - 9 SYSCO CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (In Thousands)
For the 26-Week Period Ended -------------------------------------------- December 28, 2002 December 29, 2001 -------------------- ------------------ Cash flows from operating activities: Net earnings $ 367,141 $ 322,485 Add non-cash items: Depreciation and amortization 133,437 135,239 Deferred tax provision 213,488 59,274 Provision for bad debts 15,908 16,717 Additional investment in certain assets and liabilities, net of effect of businesses acquired: (Increase) decrease in receivables (98,222) 25,031 (Increase) in inventories (130,767) (31,241) (Increase) in prepaid expenses (21,251) (14,163) Increase (decrease) in accounts payable 38,411 (36,188) (Decrease) in accrued expenses (42,346) (83,462) (Decrease) in accrued income taxes (12,091) (29,133) (Increase) in other assets (7,171) (2,956) -------------------- ------------------ Net cash provided by operating activities 456,537 361,603 -------------------- ------------------ Cash flows from investing activities: Additions to plant and equipment (217,799) (215,181) Proceeds from sales of plant and equipment 7,976 4,246 Acquisition of businesses, net of cash acquired (168,244) (12,197) Increase in restricted cash (52,056) - -------------------- ------------------ Net cash used for investing activities (430,123) (223,132) -------------------- ------------------ Cash flows from financing activities: Bank and commercial paper borrowings 208,102 117,264 Other debt repayments (5,255) (13,802) Common stock reissued from treasury 62,650 50,463 Treasury stock purchases (243,381) (218,656) Dividends paid (118,395) (93,640) -------------------- ------------------ Net cash used for financing activities (96,279) (158,371) -------------------- ------------------ Net decrease in cash (69,865) (19,900) Cash at beginning of period 198,439 135,743 -------------------- ------------------ Cash at end of period $ 128,574 $ 115,843 ==================== ================== Cash paid during the period for: Interest $ 34,492 $ 32,621 Income taxes 29,120 168,504
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