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UNITED STATES
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): DECEMBER 29, 1999
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SODEXHO MARRIOTT SERVICES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-12188 52-0936594
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
9801 WASHINGTONIAN BOULEVARD, GAITHERSBURG, MARYLAND 20878
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (301) 987-4431
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ITEM 5. OTHER EVENTS.
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On December 28, 1999, Sodexho Marriott Services, Inc. comments on
outlook for first quarter fiscal year 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(c) The following exhibit is filed as part of this Form 8-K.
Exhibit No. Description
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99 Press release, dated December 28, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SODEXHO MARRIOTT SERVICES, INC.
Date: December 29, 1999 By: /s/ ROBERT A. STERN
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Robert A. Stern
Senior Vice President and
General Counsel
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INDEX TO EXHIBITS
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Exhibit No. Description
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99 Press release issued December 28, 1999, relating
to Sodexho Marriott Services, Inc. comments on
outlook for first quarter fiscal year 2000.
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[Sodexho Marriott Services, Inc. Company Logo]
FOR IMMEDIATE RELEASE Media Relations:
Kathy Boyle (301) 987-4330
Investor Relations:
Jim Duke (301) 987-4333
SODEXHO MARRIOTT SERVICES COMMENTS ON OUTLOOK FOR
FIRST QUARTER FISCAL YEAR 2000
Gaithersburg, MD, December 28, 1999 -- Sodexho Marriott Services, Inc.
(NYSE: SDH), the nation's largest provider of food and facilities management
services to the corporate, education and health care markets, announced today
that the Company expects its earnings per share will be approximately 5% below
the analysts' consensus estimates of 46 to 47 cents for the first quarter of
fiscal year 2000 ending on December 3, 1999. This shortfall is primarily due to
a lower than anticipated operating margin in the Corporate Services division,
mostly the result of higher labor costs. Also, costs related to the start-up of
new contracts, associated with the Company's strong new sales in fiscal year
1999, hindered operating margins for the quarter. Anticipated growth in first
quarter fiscal year 2000 total revenues, principally from the strong new sales
in fiscal year 1999, are expected to be in the 6 to 7% range, compared with the
prior year's period. The Company also expects earnings for the current quarter
to be slightly lower than the pro forma 45 cents per share in last year's first
quarter (which excludes the one-time 7 cents per share gain on sale of
investment in the prior year's quarter), largely due to the expected higher Year
2000 costs and other corporate expenses in the current quarter.
As a result of the first quarter's performance, the Company anticipates
that the analysts' consensus estimate of $1.05 for fiscal year 2000 earnings per
share may be reduced by approximately 5%. The Company will provide further
information when it releases first quarter fiscal year earnings and holds its
quarterly analyst conference call on January 11, 2000.
Michel Landel, President and Chief Executive Officer, commented, "The
Company's first quarter earnings results reflect strong top line revenue growth,
while our bottom line earnings were hindered by higher labor costs and expected
start up costs from new sales last year. As we continue in our second full
fiscal year, we are confident we can resolve our near term labor cost issues,
which should improve our operating performance as the year progresses. We are
also confident that we will achieve our three year long-term strategic goals of
6% compounded annual revenue growth and 20% compounded annual earnings per share
growth."
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SODEXHO MARRIOTT SERVICES, INC. is the largest provider of outsourced food and
facilities management in North America, with $4.5 billion in annual sales. The
Company offers a variety of innovative outsourcing solutions, including food
services, housekeeping, grounds keeping, laundry, plant operations and
maintenance, and other management services to the corporate, health care,
education and remote site markets. The Company is the 52nd largest employer in
the United States with 103,000 employees. The Company's headquarters is located
at 9801 Washingtonian Boulevard, Gaithersburg, MD 20878.
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NOTE: This press release contains "forward-looking statements" within the
meaning of the federal securities laws. These statements are based on the
Company's current expectations and relate to anticipated future events that are
not historical facts, such as the Company's business strategies and their
intended results. The forward-looking statements in this release are subject to
numerous risks and uncertainties that could cause the Company's future
activities and results of operations to differ materially from those expressed
or implied in the forward-looking statements. These risks and uncertainties
include: the ability of the Company to adapt to changes in its corporate
structure, the potential adverse impact of the Company's substantial
indebtedness, competition in the food services and facilities management
industries, the effects of general economic conditions, the ability of the
Company to retain existing clients and obtain new clients, the ability of the
Company to remedy any computer-related issues resulting from the advent of the
Year 2000, and other factors described from time to time in the Company's
filings with the Securities and Exchange Commission, including the Company's
Annual Report on Form 10-K filed with the Securities and Exchange Commission on
October 29, 1999. As a result of these risks and uncertainties, readers are
cautioned not to place undue reliance on the forward-looking statements made in
this press release or elsewhere from time to time by or on behalf of the
Company. The Company assumes no obligation to update any forward-looking
statements.
