-----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, PGmLNECR/uY4WIFnImvIDHjXTqYrVRiFuCUvwnYgNT3W1/+U8h9iQWteWkPQeRQV Kxvi2EexeTeEvvzlAT+wvg== 0000914062-03-000742.txt : 20031027 0000914062-03-000742.hdr.sgml : 20031027 20031027093725 ACCESSION NUMBER: 0000914062-03-000742 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031027 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031027 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: 03957557 BUSINESS ADDRESS: STREET 1: 1390 ENCLAVE PKWY CITY: HOUSTON STATE: TX ZIP: 77077 BUSINESS PHONE: 2815841390 MAIL ADDRESS: STREET 1: 1390 ENCLAVE PKWY CITY: HOUSTON STATE: TX ZIP: 77077 8-K 1 sysco8k102703.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): October 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 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 October 27, 2003 ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION The information provided pursuant to this Item 12 is to be considered "filed" under the Securities Exchange Act of 1934 ("Exchange Act") and incorporated by reference in those filings of Sysco Corporation ("SYSCO") that provide for the incorporation of all reports and documents filed by SYSCO under the Exchange Act. On October 27, 2003, SYSCO issued a press release announcing its results of operations for the first quarter ended September 27, 2003 of its fiscal year ending July 3, 2004. SYSCO hereby incorporates by reference herein the information set forth in its Press Release dated October 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 28, 2003 as filed with the Securities and Exchange Commission. 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: October 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 October 27, 2003 5
4 EX-99.1 3 sysco8k102703ex99.txt EARNINGS RELEASE EXHIBIT 99.1 SYSCO [COMPANY LOGO] - -------------------------------------------------------------------------------- SYSCO Corporation 1390 Enclave Parkway NEWS RELEASE Houston, Texas 77077-2099 (281) 584-1390 FOR MORE INFORMATION CONTACT: John M. Palizza Assistant Treasurer (281) 584-1308 SYSCO'S FIRST QUARTER DILUTED EPS RISE 14.3% ON SALES INCREASE OF 11.0% HOUSTON, OCTOBER 27, 2003 -- SYSCO Corporation (NYSE: SYY), North America's leading foodservice marketer and distributor, today announced results for the first quarter of fiscal year 2004 for the period ended September 27, 2003. FIRST QUARTER HIGHLIGHTS: o Diluted earnings per share rose 14.3% to $0.32 compared to $0.28 in the same period last year o Net earnings climbed 14.4% to $208.8 million vs. $182.6 million in last year's first quarter o Sales increased 11.0% to $7.1 billion vs. $6.4 billion in last year's first quarter o Operating expenses as a percent to sales improved to 14.36% compared to last year's 14.95% o Acquisitions contributed 1.9 percent to overall sales growth, compared to 5.4 percent last year o| Marketing associate-served sales as a percentage of traditional broadline sales in the U.S. was 56.0% compared to 56.4% last year o SYSCO Brand items accounted for 56.9% of marketing associate-served sales and 48.8% of all traditional broadline company sales in the U.S. Richard J. Schnieders, SYSCO's chairman and chief executive officer, said, "The diligent efforts of our 47,400 associates, including their daily focus on the success of our customers, resulted in a strong first quarter performance. Despite facing a headwind of inflation and a tough comparison against last year's extremely robust first quarter, each operating segment of our company performed impressively as we began our new fiscal year." Mr. Schnieders noted that inflation, as measured by the company's rise in food costs compared to the same period a year ago, was 5.0 percent. This was primarily attributable to rising prices in the meat, dairy, poultry and canned and dry categories and compares to food cost deflation of 2.2 percent experienced at the end of last year's first fiscal quarter. "Rising food cost inflation, as well as a change in customer and product mix, lowered our gross margins by 41 basis points. This was offset by operating expenses, which as a percent to sales declined 59 basis points in the quarter," Mr. Schnieders continued. "It's important to note that while inflation impacted our cost of goods, it did not affect our fixed expenses and for the fourth consecutive quarter we have leveraged operating expenses to generate increased operating income. This is a direct result of our continued technology optimization and the success of our training programs - both of which continue to allow our companies to enhance their warehouse, routing and delivery functions." Thomas E. Lankford, SYSCO's president and chief operating officer, added, "During the first quarter we continued improving our performance in many of the key efficiency metrics that we monitor at our distribution locations. Pieces per stop, lines per stop and pieces per trip each had significant incremental gains, and we also experienced reductions in areas including warehouse costs, selection errors, inventory shrinkage and out of stocks. This performance is a testament not only to our technology systems, but also to the success of our efforts to understand our customers' needs and remain focused on our mission to help them succeed." 5 Mr. Lankford added that other first quarter highlights included the purchase of certain assets of Massachusetts-based Luzo's Foodservice and the purchase of certain foodservice assets in Stockton, California from Smart & Final. SYSCO also continued internal geographic expansion efforts with the announcement that a foldout operation would be constructed in Fargo, North Dakota to serve that growing market. "Strategic investment in our business remains a fundamental component to our growth initiatives," continued Mr. Lankford. "Accordingly, capital expenditures for the first quarter totaled $103.1 million and we project capital expenditures in the range of $490 million for the fiscal year. Our National Supply Chain project progressed according to plan during the quarter and to date $113 million has been expended on the project since it began in fiscal 2002." Mr. Lankford also added that first quarter expenditures for the Northeast Redistribution Center, which is expected to begin operations in the fall of 2004, were $31 million, $22 million of which was capitalized. "We have the right people and the proper strategies in place," concluded Mr. Lankford. "SYSCO continues to grow at a rate above the industry, and we remain confident that we are positioned for continued future growth and market share gains." SYSCO is the largest foodservice marketing and distribution organization in North America, providing food and related products and services to approximately 420,000 restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers. The company generated sales of $26.1 billion for the fiscal year ended June 28, 2003. SYSCO's operations are located throughout the United States and Canada and include broadline companies, specialty produce, meat, Asian foodservice 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. As previously announced, SYSCO's first quarter 2004 earnings conference call will be held at 10:00 a.m. eastern time on Monday, October 27, 2003. A live webcast of the call, as well as a copy of this press release, will be available online at www.sysco.com under Investor Relations. 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, improve its operational efficiencies and performance and gain market share, as well as statements regarding capital expenditures and the expected timing, cost and benefits of its national supply chain project and northeast redistribution center. 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; construction schedules; management's allocation of capital and the timing of capital purchases such as fleet and equipment; competitive conditions; labor issues; 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 28, 2003 as filed with the Securities and Exchange Commission. - more - 6
SYSCO CORPORATION CONSOLIDATED RESULTS OF OPERATIONS (Unaudited) (In Thousands Except for Share Data) FOR THE 13-WEEK PERIOD ENDED -------------------------------------------------------- SEPTEMBER 27, 2003 SEPTEMBER 28, 2002 -------------------------- ------------------------ Sales $7,134,281 $6,424,422 Costs and expenses Cost of sales 5,753,767 5,154,704 Operating expenses 1,024,336 960,635 Interest expense 18,631 16,828 Other, net (1,983) (3,412) -------------------------- ------------------------ Total costs and expenses 6,794,751 6,128,755 -------------------------- ------------------------ Earnings before income taxes 339,530 295,667 Income taxes 130,719 113,093 -------------------------- ------------------------ Net earnings $ 208,811 $ 182,574 ========================== ======================== Basic earnings per share $ 0.32 $ 0.28 ========================== ======================== Diluted earnings per share $ 0.32 $ 0.28 ========================== ======================== Average shares outstanding 645,862,376 654,176,221 ========================== ======================== Diluted average shares outstanding 657,274,982 663,542,498 ========================== ======================== - -------------------------------------------------------------------------------------------------------------------- Comparative segment sales data for the first quarter of fiscal years 2004 and 2003 are summarized below. ($000) FOR THE 13-WEEK PERIOD ENDED -------------------------------------------------------- SEPTEMBER 27, 2003 SEPTEMBER 28, 2002 -------------------------- ------------------------ SALES Broadline $ 5,827,089 $ 5,321,257 SYGMA 824,563 709,584 Other 561,460 451,350 Intersegment Sales (78,831) (57,769) -------------------------- ------------------------ Total Sales $ 7,134,281 $ 6,424,422 ========================== ======================== - -------------------------------------------------------------------------------------------------------------------- Comparative SYSCO Brand Sales and Marketing Associate-Served Sales data for the first quarter of fiscal years 2004 and 2003 is summarized below. FOR THE 13-WEEK PERIOD ENDED -------------------------------------------------------- SEPTEMBER 27, 2003 SEPTEMBER 28, 2002 -------------------------- ------------------------ SYSCO Brand Sales as a % of MA-Served Sales 56.9% 56.5% SYSCO Brand Sales as a % of Total Traditional Broadline Sales 48.8% 48.9% MA-Served Sales as a % of Total Traditional Broadline Sales 56.0% 56.4% All SYSCO Brand and Marketing Associate-Served Sales data excludes Canadian operations - --------------------------------------------------------------------------------------------------------------------
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SYSCO CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) (In Thousands) September 27, 2003 September 28, 2002 -------------------------- ----------------------- ASSETS Current assets Cash $ 221,544 $ 163,189 Receivables 2,123,716 1,869,128 Inventories 1,313,497 1,226,885 Deferred taxes 53,983 41,699 Prepaid expenses 63,433 73,030 -------------------------- ----------------------- Total current assets 3,776,173 3,373,931 Plant and equipment at cost, less depreciation 1,958,067 1,718,941 Other assets Goodwill and intangibles 1,156,358 922,491 Restricted cash 125,877 57,000 Other 197,719 173,094 -------------------------- ----------------------- Total other assets 1,479,954 1,152,585 -------------------------- ----------------------- Total assets $ 7,214,194 $6,245,457 ========================== ======================= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable $ 87,967 $ 50,016 Accounts payable 1,674,898 1,420,276 Accrued expenses 653,848 544,668 Accrued income taxes 351,826 38,241 Current maturities of long-term debt 21,967 13,474 -------------------------- ----------------------- Total current liabilities 2,790,506 2,066,675 Other liabilities Long-term debt 1,195,282 1,265,938 Deferred taxes 632,939 554,690 Other long-term liabilities 270,873 164,469 -------------------------- ----------------------- Total other liabilities 2,099,094 1,985,097 Contingencies Shareholders' equity Preferred stock - - Common stock, par $l per share 765,175 765,175 Paid-in capital 278,251 233,727 Retained earnings 3,511,438 2,992,849 Other comprehensive loss (152,770) (65,435) Treasury stock (2,077,500) (1,732,631) -------------------------- ----------------------- Total shareholders' equity 2,324,594 2,193,685 -------------------------- ----------------------- Total liabilities and shareholders' equity $7,214,194 $6,245,457 ========================== =======================
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SYSCO CORPORATION CONSOLIDATED CASH FLOWS (Unaudited) (In Thousands) For the 13-Week Period Ended ---------------------------------------------------- September 27, 2003 September 28, 2002 -------------------------- ---------------------- Cash flows from operating activities: Net earnings $ 208,811 $ 182,574 Add non-cash items: Depreciation and amortization 69,679 65,796 Deferred tax provision 128,924 105,609 Provision for bad debts 7,332 7,546 Additional investment in certain assets and liabilities, net of effect of businesses acquired: (Increase) in receivables (110,285) (115,847) (Increase) in inventories (77,681) (109,016) (Increase) in prepaid expenses (11,056) (31,064) Increase in accounts payable 39,307 70,946 (Decrease) in accrued expenses (45,007) (59,082) (Decrease) increase in accrued income taxes (9,968) 2,342 (Increase) decrease in other assets (14,016) 7,433 -------------------------- ---------------------- Net cash provided by operating activities 186,040 127,237 -------------------------- ---------------------- Cash flows from investing activities: Additions to plant and equipment (103,056) (88,025) Proceeds from sales of plant and equipment 1,283 4,782 Acquisition of businesses, net of cash acquired (31,640) (48) Increase in restricted cash (45,000) (25,000) -------------------------- ---------------------- Net cash used for investing activities (178,413) (108,291) -------------------------- ---------------------- Cash flows from financing activities: Bank and commercial paper borrowings (63,765) 75,509 Other debt repayments (3,150) (2,502) Common stock reissued from treasury 55,428 41,936 Treasury stock purchases (39,764) (109,899) Dividends paid (71,257) (59,240) -------------------------- ---------------------- Net cash used for financing activities (122,508) (54,196) -------------------------- ---------------------- Effect of exchange rate changes on cash (1,022) - -------------------------- ---------------------- Net decrease in cash (115,903) (35,250) Cash at beginning of period 337,447 198,439 -------------------------- ---------------------- Cash at end of period $ 221,544 $ 163,189 ========================== ====================== Cash paid during the period for: Interest $ 12,274 $ 7,938 Income taxes 10,696 8,268
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