<PAGE>
Page 1 of 12
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 1, 1995
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 [ ]
182,352,833 shares of common stock were outstanding as of
May 5, 1995.
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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 2, 1994
consolidated balance sheet which was taken from
the audited financial statements included in the
Company's Fiscal 1994 Annual Report on Form
10-K. The financial statements include
consolidated balance sheets, consolidated
results of operations and consolidated cash
flows. 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 1994 Annual Report on Form 10-
K.
A review of the financial information herein has
been made by Arthur Andersen LLP, independent
public accountants, in accordance with established
professional standards and procedures for such a
review. A letter from Arthur Andersen LLP
concerning their review is included as Exhibit 15.
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3
<TABLE>
SYSCO CORPORATION and its Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In Thousands Except for Share Data)
<CAPTION> April 1, July 2, April 2,
1995 1994 1994
(Unaudited) (Audited) (Unaudited)
----------- --------- -----------
ASSETS
----------
<S> <C> <C> <C>
Current assets:
Cash $ 78,065 $ 86,735 $ 64,128
Accounts and notes receivable,
less allowances of $34,449,
$15,999 and $33,046 934,482 856,448 859,284
Inventories 677,293 601,994 612,534
Deferred taxes 24,153 38,091 36,026
Prepaid expenses 21,783 16,380 22,097
---------- ---------- ----------
Total current assets 1,735,776 1,599,648 1,594,069
Plant and equipment at cost, less
depreciation 875,687 817,221 801,794
Goodwill and intangibles, less
amortization 260,139 266,021 263,603
Other assets 149,677 128,839 112,675
---------- ---------- ----------
Total assets $3,021,279 $2,811,729 $2,772,141
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable $ 50,830 $ 5,247 $ 27,903
Accounts payable 702,605 632,373 647,512
Accrued expenses 189,500 176,043 163,191
Accrued income taxes 14,088 29,168 30,221
Current maturities of long-term
debt 5,234 3,730 6,307
---------- --------- ----------
Total current liabilities 962,257 846,561 875,134
Long-term debt 530,268 538,711 512,332
Deferred taxes 196,619 185,548 173,776
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 shares 191,294 191,294 191,294
Paid-in capital 51,282 60,003 61,446
Retained earnings 1,322,345 1,200,735 1,149,860
---------- ---------- ----------
1,564,921 1,452,032 1,402,600
Less cost of treasury stock,
9,099,381, 8,224,505 and
7,457,639 shares 232,786 211,123 191,701
---------- ---------- ----------
Total shareholders' equity 1,332,135 1,240,909 1,210,899
---------- ---------- ----------
Total liabilities and
shareholders' equity $3,021,279 $2,811,729 $2,772,141
========== ========== ==========
<FN>
Note: The July 2, 1994 balance sheet has been taken from the audited
financial statements at that date.
</TABLE>
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4
<TABLE>
SYSCO Corporation and its Consolidated Subsidiaries
CONSOLIDATED RESULTS OF OPERATIONS (Unaudited)
(In Thousands Except for Share Data)
<CAPTION> 39-Week Period Ended 13-Week Period Ended
---------------------------- -----------------------------
April 1, April 2, April 1, April 2,
1995 1994 1995 1994
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Sales $ 8,956,114 $ 8,060,610 $ 2,966,355 $ 2,684,854
Costs and expenses
Cost of sales 7,345,041 6,613,160 2,432,677 2,209,780
Operating expenses 1,294,310 1,165,433 436,443 391,844
Interest expense 28,738 27,898 10,317 7,949
Other income, net (1,697) (1,630) (624) (496)
------------ ----------- ------------ ------------
Total costs and expenses 8,666,392 7,804,861 2,878,813 2,609,077
------------ ----------- ------------ ------------
Earnings before income taxes 289,722 255,749 87,542 75,777
Income taxes 115,019 106,432 34,754 30,083
------------ ------------ ------------ ------------
Net earnings $ 174,703 $ 149,317 $ 52,788 $ 45,694
============ ============ ============ ============
Average number of shares
outstanding 182,905,450 184,624,948 182,531,301 184,201,317
============ ============ ============ ============
Earnings per share $ 0.96 $ 0.81 $ 0.29 $ 0.25
============ ============ ============ ============
Dividends paid per common
share $ 0.29 $ 0.23 $ 0.11 $ 0.09
============ ============ ============ ============
(/Table)
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5
</TABLE>
<TABLE>
SYSCO CORPORATION and its Consolidated Subsidiaries
CONSOLIDATED CASH FLOWS - (Unaudited)
(In Thousands)
<CAPTION> 39-Week Period Ended
------------------------
April 1, April 2,
1995 1994
-------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 174,703 $149,317
Add non-cash items:
Depreciation and amortization 97,224 88,961
Interest on Liquid Yield Option Notes 4,500 4,273
Deferred tax provision 25,009 13,784
Provision for losses on accounts receivable 14,209 14,346
Additional investment in certain assets
and liabilities net of effect of business
acquired:
(Increase) in receivables (92,243) (85,751)
(Increase) in inventories (75,299) (68,822)
(Increase) in prepaid expenses (5,403) (2,111)
Increase in accounts payable 70,232 88,916
Increase in accrued expenses 13,457 2,658
(Decrease) increase in accrued income taxes (15,080) 3,131
(Increase) in other assets (24,941) (33,514)
-------- --------
Net cash provided by operating activities 186,368 175,188
-------- --------
Cash flows from investing activities:
Additions to plant and equipment (149,514) (117,494)
Proceeds from sales of plant and equipment 3,809 1,976
Acquisitions of business, net of cash
acquired --- (11,897)
-------- --------
Net cash used for investing activities (145,705) (127,415)
-------- --------
Cash flows from financing activities:
Bank and commercial paper borrowings 40,406 34,451
Other debt repayments (6,257) (8,983)
Common stock reissued from treasury 20,122 19,354
Treasury stock purchases (50,511) (54,712)
Dividends paid (53,093) (42,514)
-------- --------
Net cash used for financing activities (49,333) (52,404)
-------- --------
Net (decrease) in cash (8,670) (4,631)
Cash at beginning of period 86,735 68,759
-------- --------
Cash at end of period $ 78,065 $ 64,128
======== ========
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 26,697 $ 26,022
Income taxes 104,536 91,341
</TABLE>
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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 1994
Annual Report on Form 10-K remains applicable,
other than the common stock repurchase program
described below.
In Fiscal 1992, the Company began a common stock
repurchase program and purchased 8,000,000 shares
in Fiscal 1992 and 1993. In September 1993, the
Board of Directors authorized an additional
10,000,000 shares to be purchased under this stock
repurchase program. Under this program, 3,000,000
shares were purchased in Fiscal 1994 and 2,000,000
shares through April 1, 1995.
Results of Operations
---------------------
Sales increased 11% during the 39 weeks and 10% in
the third quarter of Fiscal 1995 over the comparable
periods of the prior year. Cost of sales increased
11% during the 39 weeks and 10% in the third quarter
of Fiscal 1995 which is generally in line with the
sales increases. Operating expenses for the periods
presented remained approximately the same as a percent
of sales.
Interest expense in the current periods increased from
the prior periods due increased borrowings and rates.
Income taxes for the prior 39 weeks includes a $4.9
million provision relating to the retroactive impact
of the Omnibus Budget Reconciliation Act of 1993.
Excluding this charge, the effective tax rate for
the current and prior periods was 39.7%, reflecting
the current federal tax rate of 35%.
Increases in pretax earnings, net earnings and
earnings per share for the periods shown resulted
from a combination of the above factors.
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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 LLP
dated May 12, 1995, re unaudited financial
statements.
Exhibit 27, Financial Data Schedule.
(b) No reports on Form 8-K have been filed during
the quarter for which this report is filed.
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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.
Senior Vice President &
Chief Financial Officer
Date: May 12, 1995
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9
<TABLE>
EXHIBIT INDEX
----------------------
<CAPTION> SEQUENTIAL
NO. DESCRIPTION PAGE NUMBER
- - - - - - ----- ----------------------------------------- -------------
<S> <C> <C>
11 SYSCO Corporation and its Consolidated
Subsidiaries statement re computation of
per share earnings 10
15 Letter from Arthur Andersen LLP dated
May 12, 1995, re unaudited financial
statements 11
27 SYSCO Corporation and its Consolidated
Subsidiaries Financial Data Schedule 12
</TABLE>
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10
Exhibit 11
SYSCO CORPORATION AND ITS CONSOLIDATED SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION> 39-Week Period Ended 13-Week Period Ended
---------------------------- ----------------------------
April 1, 1995 April 2, 1994 April 1, 1995 April 2, 1994
------------- ------------- ------------- -------------
Calculation of Primary Earnings Per Share:
- - - - - - -----------------------------------------
<S> <C> <C> <C> <C>
Net earnings applicable to common stock $ 174,703,000 $ 149,317,000 $ 52,788,000 $ 45,694,000
============= ============= ============= =============
Average number of common shares and common
stock equivalents outstanding 182,905,450 184,624,948 182,531,301 184,201,317
Dilutive effect of stock options <F1> --- --- --- ---
------------- ------------- ------------- -------------
182,905,450 184,624,948 182,531,301 184,201,317
============= ============= ============= =============
Primary earnings per share $ 0.96 $ 0.81 $ 0.29 $ 0.25
============= ============= ============= =============
Calculation of Fully Diluted Earnings Per Share:
- - - - - - ------------------------------------------------
Net earnings applicable to common stock $ 174,703,000 $ 149,317,000 $ 52,788,000 $ 45,694,000
============= ============= ============= =============
Average number of shares outstanding on a
fully diluted basis - same as for
calculation of primary earnings per share 182,905,450 184,624,948 182,531,301 184,201,317
Dilutive effect of stock options and Liquid
Yield Option Notes <F2> --- --- --- ---
------------- ------------- ------------- ------------
182,905,450 184,624,948 182,531,301 184,201,317
============= ============= ============= ============
Fully diluted earnings per share $ 0.96 $ 0.81 $ 0.29 $ 0.25
============= ============= ============= ============
<FN>
<F1> Maximum possible dilutive effect of outstanding options in each period is less than 3%.
<F2> Maximum possible dilutive effect of outstanding options and Liquid Yield
Option Notes during each period is less than 3%.
</TABLE>
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11
Exhibit 15
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
of Sysco Corporation:
We have reviewed the consolidated balance sheet
of Sysco Corporation (a Delaware corporation)
and subsidiaries as of April 1, 1995, and
the related consolidated statements of results
of operations and cash flows for the thirty-nine
week and thirteen 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 LLP
Houston, Texas
May 12, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from Item 1. Financial Statements and is
qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-01-1995
<PERIOD-END> APR-01-1995
<CASH> $ 78,065
<SECURITIES> 0
<RECEIVABLES> 968,931
<ALLOWANCES> (34,449)
<INVENTORY> 677,293
<CURRENT-ASSETS> 1,735,776
<PP&E> 1,531,002
<DEPRECIATION> (655,315)
<TOTAL-ASSETS> 3,021,279
<CURRENT-LIABILITIES> 962,257
<BONDS> 530,268
0
0
<COMMON> 191,294
<OTHER-SE> 1,140,841
<TOTAL-LIABILITY-AND-EQUITY> 3,021,279
<SALES> 8,956,114
<TOTAL-REVENUES> 8,956,114
<CGS> 7,345,041
<TOTAL-COSTS> 8,666,392
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 14,209
<INTEREST-EXPENSE> 28,738
<INCOME-PRETAX> 289,722
<INCOME-TAX> 115,019
<INCOME-CONTINUING> 174,703
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 174,703
<EPS-PRIMARY> 0.96
<EPS-DILUTED> 0.96
</TABLE>
