-----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, EW5CrP9zYeTo2ClNr3R8YRgs7mm3ktimusSxH1eFknfZ53+S3xGoqG92vNg3pF14 B18+EvLFV5YKO8fLaloXDg== 0000950129-00-000196.txt : 20000202 0000950129-00-000196.hdr.sgml : 20000202 ACCESSION NUMBER: 0000950129-00-000196 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000119 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000121 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: SEC FILE NUMBER: 001-06544 FILM NUMBER: 511100 BUSINESS ADDRESS: STREET 1: 1390 ENCLAVE PKWY CITY: HOUSTON STATE: TX ZIP: 77077 BUSINESS PHONE: 2815841390 8-K 1 SYSCO CORPORATION - DATED 01/19/2000 1 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 19, 2000 SYSCO CORPORATION (Exact name of registrant as specified in its charter) Delaware 1-06544 74-1648137 (State or other jurisdiction of (Commission File Number) (IRS employer Identification No.) incorporation) 1390 Enclave Parkway 77077-2099 Houston, Texas (Zip Code) (Address of principal executive offices)
Registrant's telephone number, including area code: (281) 584-1390 (Former name or former address, if changed since last report) 2 ITEM 5. OTHER EVENTS. On January 19, 2000, SYSCO Corporation ("SYSCO") issued a press release ("Press Release") announcing its results of operations for the quarter and 26 weeks ended January 1, 2000. SYSCO hereby incorporates by reference herein the information set forth in its Press Release dated January 19, 2000, a copy of which is annexed hereto as Exhibit 99. On January 7, 2000, SYSCO issued a Press Release announcing a letter of intent to acquire FreshPoint Holdings, Inc. SYSCO hereby incorporates by reference herein the information set forth in its Press Release dated January 7, 2000, a copy of which is annexed hereto as Exhibit 99.2. 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 Releases. For further information on other risk factors, please refer to the "Risk Factors" section of SYSCO's Form 10-K for the fiscal year ended July 3, 1999 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 Press Release dated January 19, 2000 99.2 Press Release dated January 7, 2000
3 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 19, 2000 By: /s/ JOHN K. STUBBLEFIELD, JR. ------------------------------ John K. Stubblefield, Jr. Executive Vice President, Finance & Administration 4 INDEX OF EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 99 Press Release dated January 19, 2000 99.2 Press Release dated January 7, 2000
EX-99 2 PRESS RELEASE - DATED 01/19/2000 1 Exhibit 99 [SYSCO LETTERHEAD] FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT: Diane Day Sanders Vice President and Treasurer SYSCO CONTINUES SALES AND PROFIT MOMENTUM, REPORTING 19 PERCENT EPS GROWTH AND 9.5 PERCENT RISE IN SALES HOUSTON, JANUARY 19, 2000 -- SYSCO Corporation (NYSE: SYY) today reported that the company continued to achieve solid sales and earnings momentum for the fiscal 2000 second quarter that ended January 1, 2000. Diluted earnings per share for the quarter increased to $0.31 per share, a 19 percent gain over the $0.26 attained during the fiscal 1999 second quarter. Sales for the period reached $4.7 billion, 9.5 percent more than second quarter fiscal 1999 sales of $4.2 billion. Net earnings were $101.9 million, 18 percent higher than the $86.4 million net earnings of the prior year's second quarter. Diluted earnings per share for the first half of fiscal 2000 increased 22 percent to $0.62 before an accounting change in the first quarter of fiscal 2000, compared to $0.51 per share earned during the first half of fiscal 1999. First half sales of $9.3 billion were 10 percent above first half fiscal 1999 sales of $8.4 billion. Net earnings before the accounting change increased to $207.6 million, 20 percent more than the $172.8 million for the same period last year. "We are extremely pleased with the continuing momentum of sales and the strength of earnings growth," said Charles H. Cotros, SYSCO's president who assumed the additional role of chief executive officer on January 1. "Robust sales growth during the quarter generated three record sales weeks. After adjusting for 2.4 percent for acquisitions and 0.6 percent for food cost deflation, which primarily related to lower costs for dairy and poultry items, real sales growth during the quarter was 7.7 percent. For the first six months of fiscal 2000, real sales growth was 8.9 percent after eliminating the effects of 1.8 percent for acquisitions and 0.4 percent deflation. As expected, second quarter real growth was 2.5 percent less than the real growth experienced in the first quarter due to the anniversary of additional Wendy's International, Inc. business that came on stream during the second quarter of fiscal 1999. "Sales and earnings growth and profitability continue to be favorably impacted by strong sales to our marketing associate-served customer base and increasingly higher sales of SYSCO brand products. For the quarter, marketing associate-served sales grew at double-digit levels and represented about 55 percent of traditional company sales as compared to approximately 54 percent of sales in the fiscal 1999 second quarter. Likewise, SYSCO brand product sales, a critical component of our growth strategy, represented about 50 percent of marketing associate-served sales versus approximately 48 percent a year ago." - more - 2 -2- Mr. Cotros noted that the SYSCO Uniform System (SUS) conversions were completed on schedule as planned in early December and all operations were transitioned smoothly from 1999 into the new year. He said the effect of having a single operating system nationwide in the traditional companies will provide access to information that was previously not easily obtainable and should improve efficiencies and productivity in the company's operations. In concluding his remarks Mr. Cotros said, "We are excited about the growth opportunities available to us during the balance of fiscal 2000. The acquisitions of the three custom-cut steak distribution operations during the year significantly enhance SYSCO's ability to provide fine center-of-the-plate products to its restaurant customers. We anticipate closing the acquisition of Watson Foodservice, a broadline distributor in Lubbock, Texas, during the third quarter. The recently announced agreement with FreshPoint Holdings, Inc., a specialty fresh produce distribution network, is expected to close by the end of the fiscal year, and will add approximately $750 million in annualized revenues to the $1.0 billion in fresh produce sales generated by SYSCO during fiscal 1999. These additional operations, combined with the ongoing growth of our core business and the strength of the SYSCO brand products will continue to provide impetus to expand SYSCO's position as the leader in the $165 billion foodservice distribution industry." SYSCO, listed on the New York Stock Exchange, is the largest foodservice marketing and distribution organization in North America. Generating in excess of $18.5 billion in annual sales, the company provides food and related products and services to approximately 325,000 restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers. The SYSCO distribution network extends throughout the entire continental United States, as well as Alaska and portions of 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 annualized sales, sales momentum, earnings growth, continued strength of SYSCO brand products, industry growth, fiscal 2000 projections, improved operating efficiencies and productivity related to information systems and acquisitions. Closing of the FreshPoint Holdings, Inc. transaction is subject to conditions including completion of due diligence and the negotiation and execution of definitive agreements. These statements involve risks and uncertainties and are based on current expectations and management's estimates; actual results may differ materially. Those risks and uncertainties that could impact these statements include the possibility that the company's information systems will not operate as anticipated and therefore not provide the company with the expected competitive edge, the risks relating to the foodservice distribution industry's relatively low profit margins and sensitivity to economic conditions, SYSCO's leverage and debt risks, the successful completion and integration of acquisitions, the risk of interruption of supplies due to lack of long-term contracts, work stoppages or otherwise, and other risk factors detailed in SYSCO's Form 10-K for the fiscal year ended July 3, 1999 filed with the Securities and Exchange Commission. - more - 3 -3- The comparative financial data for the second quarter of fiscal years 2000 and 1999 are summarized below. ($000 omitted except for per share data)
FOR THE 13-WEEK PERIOD ENDED -------------------------------------- JANUARY 1, 2000 DECEMBER 26, 1998 --------------- ----------------- SALES $ 4,651,535 $ 4,246,675 Costs and expenses Cost of sales 3,771,998 3,469,496 Operating expenses 695,418 616,899 Interest expense 16,680 18,397 Other, net 1,754 245 ------------ ------------ TOTAL COSTS AND EXPENSES 4,485,850 4,105,037 ------------ ------------ EARNINGS BEFORE INCOME TAXES 165,685 141,638 Income taxes 63,789 55,239 ------------ ------------ NET EARNINGS $ 101,896 $ 86,399 ============ ============ BASIC EARNINGS PER SHARE $ 0.31 $ 0.26 ============ ============ DILUTED EARNINGS PER SHARE $ 0.31 $ 0.26 ============ ============ BASIC AVERAGE SHARES OUTSTANDING 328,478,205 333,885,574 ============ ============ DILUTED AVERAGE SHARES OUTSTANDING 333,544,018 337,894,965 ============ ============
- more - 4 -4- The comparative financial data for the 26-weeks of fiscal years 2000 and 1999 are summarized below. ($000 omitted except for per share data)
FOR THE 26-WEEK PERIOD ENDED ---------------------------------------- JANUARY 1, 2000 DECEMBER 26, 1998 --------------- ----------------- TOTAL SALES $ 9,308,569 $ 8,439,305 Costs and expenses Cost of sales 7,565,198 6,895,541 Operating expenses 1,369,662 1,224,711 Interest expense 34,624 35,328 Other, net 1,565 415 ------------- ------------- TOTAL COSTS AND EXPENSES 8,971,049 8,155,995 ------------- ------------- EARNINGS BEFORE INCOME TAXES 337,520 283,310 Income taxes 129,945 110,491 ------------- ------------- EARNINGS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 207,575 172,819 Cumulative effect of accounting change (8,041) -- ------------- ------------- NET EARNINGS $ 199,534 $ 172,819 ============= ============= EARNINGS BEFORE ACCOUNTING CHANGE: BASIC EARNINGS PER SHARE $ 0.63 $ 0.52 ============= ============= DILUTED EARNINGS PER SHARE $ 0.62 $ 0.51 ============= ============= CUMULATIVE EFFECT OF ACCOUNTING CHANGE: BASIC EARNINGS PER SHARE $ (0.02) $ -- ============= ============= DILUTED EARNINGS PER SHARE $ (0.02) $ -- ============= ============= NET EARNINGS: BASIC EARNINGS PER SHARE $ 0.61 $ 0.52 ============= ============= DILUTED EARNINGS PER SHARE $ 0.60 $ 0.51 ============= ============= BASIC AVERAGE SHARES OUTSTANDING 328,701,719 334,367,309 ============= ============= DILUTED AVERAGE SHARES OUTSTANDING 333,686,134 338,039,496 ============= =============
### EX-99.2 3 PRESS RELEASE - DATED 01/07/2000 1 EXHIBIT 99.2 [SYSCO LETTERHEAD] FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT: Toni R. Spigelmyer Assistant Vice President, Investor and Media Relations (281) 584-1458 SYSCO TO ACQUIRE $750 MILLION FRESHPOINT HOLDINGS, INC. TO ENHANCE ITS CURRENT $1 BILLION IN FRESH PRODUCE SALES HOUSTON, JANUARY 7, 2000 -- SYSCO Corporation (NYSE: SYY), the leading foodservice marketer and distributor in North America, announced today that it has signed a letter of intent to acquire FreshPoint Holdings, Inc., one of the largest foodservice and wholesale produce distribution companies in North America. Headquartered in Dallas, Texas, the company initially began operations in 1996 following a management buyout of substantially all the North American produce distribution businesses of Albert Fisher, a conglomerate of food distribution companies based in England. Current annualized sales of FreshPoint Holdings, Inc. are approximately $750 million, approaching the $1.0 billion in produce sales generated by SYSCO during fiscal year 1999. Terms of the transaction were not disclosed. Albert Fisher began developing a North American presence in 1984 by acquiring the recognized premier produce distributors in certain established markets and retaining management who continue to operate the family-owned businesses they founded decades earlier. The company has continued to build its reputation through acquisitions and internal growth, creating a network of 28 facilities located in Washington, D.C., Georgia, Florida, Texas, Nevada, Colorado and California, as well as the Canadian provinces of British Columbia and Alberta. FreshPoint currently distributes a product mix of 60 percent fresh vegetables, 25 percent fresh fruit and 15 percent other produce and refrigerated products. Its customer base of more than 20,000 includes foodservice establishments such as restaurants, hotels, cruise ships, government facilities and other institutional customers, wholesale locations such as grocery stores, and - more - 2 other produce and broadline distributors. The company maintains approximately 1.4 million square feet of warehouse storage and delivers products through a fleet of more than 750 temperature-controlled vehicles. Discussing the acquisition, Charles H. Cotros, SYSCO's president and chief executive officer, said, "Industry sources report that produce sales within the United States have grown about 5.5 percent annually over the past five years and they project additional growth in the four to five percent range during the next five to 10 years. FreshPoint is a premier produce distributor with outstanding purchasing capabilities that will enhance SYSCO's goal of continuing to be the leading produce distributor in its markets. By combining SYSCO's purchasing with theirs, we will be able to assure that the highest quality fresh produce will be available to our customers from sources throughout the world." Bill M. Lindig, SYSCO's chairman of the board, said management was surprised by how little customer duplication exists between the two companies. "We've often said this great North American foodservice distribution market of $165 billion in calendar 1998 had plenty of opportunity for growth and SYSCO holds only about a 10 percent market share. With our current produce sales at about 6 percent of total sales, this acquisition will give us the ability to grow by providing just-in-time and more frequent produce deliveries to customers that require these superior service levels. Additionally, FreshPoints' minimal overlap of customers will open windows of opportunity for their customers to access SYSCO's broad array of other products." Mitt Parker, FreshPoint's president and chief executive officer, said "We are pleased to become part of the SYSCO family by aligning ourselves with the premier foodservice distributor in the industry. This solidifies a long-term future for our employees and also offers national coverage for multi-unit chain customers. This will also give us the financial strength to continue our expansion as the leader in fresh produce distribution." FreshPoint Holdings, Inc. will become a subsidiary of SYSCO. The FreshPoint organization is entrepreneurial in nature, similar to SYSCO's structure, and SYSCO plans to continue operating it separately, retaining key management individuals who will continue to be responsible for day-to-day operations of the organization. Both Mr. Parker and Brian Sturgeon, FreshPoint's chief operating officer, will continue in their current positions. - more - 3 SYSCO, listed on the New York Stock Exchange, is the largest foodservice marketing and distribution organization in North America. Generating annualized sales in excess of $18.5 billion, SYSCO provides its products and services to about 325,000 customers. The SYSCO distribution network currently extends throughout the entire contiguous United States as well as portions of Alaska and Canada. Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They include statements regarding annualized sales, growth of the produce industry and growth of the foodservice distribution industry. These statements involve risks and uncertainties and are based on current expectations and management's estimates; actual results may differ materially. Closing of the transaction is subject to conditions including completion of due diligence, negotiation and execution of definitive agreements, and final board approval of both companies. Those risks and uncertainties that could impact these statements include the risk and uncertainty relating to sensitivity to conditions in the economy and the foodservice distribution industry, SYSCO's leverage and debt risks, the risk of interruption of supplies due to lack of long-term contracts, work stoppages or otherwise, the successful integration of acquisitions as explained in the "Integration of Acquired Companies" section of the Risk Factors in SYSCO's Form 10-K for the fiscal year ended July 3, 1999, and other risk factors detailed in SYSCO's Form 10-K for the fiscal year ended July 3, 1999 filed with the Securities and Exchange Commission. # # # -----END PRIVACY-ENHANCED MESSAGE-----