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 20, 1999
SYSCO CORPORATION
(Exact name of registrant as specified in charter)
Delaware 1-06544 74-1648137
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
1390 Enclave Parkway
Houston, Texas 77077-2099
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number including area code (281) 584-1390
(Former name or former address, if changed since last report)
976630v1
<PAGE>
ITEM 5. OTHER EVENTS.
On October 20, 1999, SYSCO Corporation ("SYSCO") issued a press release
("Press Release") announcing its results of operations for the quarter ended
October 2, 1999. SYSCO hereby incorporates by reference herein the information
set forth in its Press Release dated October 20, 1999, a copy of which is
annexed hereto as Exhibit 99.
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" 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 October 20, 1999
<PAGE>
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 20, 1999 By: /s/ Michael C. Nichols
-------------------------------------
Michael C. Nichols
Vice President and General Counsel
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
99* Press Release dated October 20, 1999
- --------------
* Filed herewith.
Exhibit 99
SYSCO [SYSCO LOGO OMITTED]
- --------------------------------------------------------------------------------
SYSCO Corporation NEWS RELEASE
1390 Enclave Parkway
Houston, Texas 77077-2099
(281) 584-1390
FOR IMMEDIATE RELEASE
FOR MORE INFORMATION
CONTACT: Diane Day Sanders
Vice President and Treasurer
SYSCO Records 23 Percent EPS Growth, Strong Sales Momentum
For First Quarter FY 2000
Houston, October 20, 1999 -- SYSCO Corporation (NYSE: SYY) today
reported exceptionally strong diluted first quarter fiscal 2000 earnings per
share of $0.32, before the accounting change discussed below, 23 percent higher
than the $0.26 per share achieved during the first quarter of the prior year.
Excellent momentum boosted sales 11 percent to $4.7 billion for the period ended
October 2, 1999, as compared to $4.2 billion during the first quarter a year
earlier. Net earnings before the accounting change reached $105.7 million versus
$86.4 million in the same period of fiscal 1999, a 22 percent increase.
Net earnings and earnings per share exclude a one-time non-cash charge
of $8 million, or $0.02 per share, to comply with the required adoption of AICPA
Statement of Position 98-5 (SOP-98-5), "Reporting on the Costs of Start-up
Activities." SOP-98-5 requires the write-off of any unamortized costs of
start-up activities and organization costs. Going forward such costs will be
expensed as incurred.
Bill M. Lindig, chairman and chief executive officer, said, "Our
strategy of building relationships that enhance the profitability of our
marketing associate-served, or independent, restaurant customers continues to
contribute significantly to our success. The outstanding sales momentum
experienced during the final quarter of last year extended throughout the first
quarter of fiscal 2000 as sales to the independent segment grew at a healthy
double-digit pace. Overall real sales growth reached 10.2 percent, after
eliminating the effects of 1.1 percent for acquisitions and 0.2 percent for
deflation in food costs. Additional factors contributing to our profit growth
are the operating efficiencies being realized now that the majority of the costs
related to the three-year conversion and rollout of SYSCO's company-wide
information systems are substantially behind us."
<PAGE>
Mr. Lindig also noted that SYSCO(R) Brand products continue to gain
acceptance by customers, particularly the marketing associate-served segment, as
they enhance their profitability. SYSCO Brand sales have grown to approximately
50 percent of traditional foodservice sales versus 48 percent last year.
Three acquisitions that closed during the quarter include two Certified
Angus Beef fresh-cut steak and center-of-the-plate distribution operations,
Buckhead Beef of Atlanta and Newport Meat Company of Irvine, California, as well
as Doughtie's Foods, a full-service distributor based in Portsmouth, Virginia.
"Buckhead and Newport represent the `best of the best' in their field," Mr.
Lindig said. "This is an opportunity for SYSCO to provide a consistent supply of
fresh-cut steaks and other protein products in demand in the foodservice arena
and these companies have been immediately accretive to the company's results.
The Doughtie's acquisition will allow SYSCO to expand its market presence and
enable us to provide better service to existing customers that are currently
being supplied from SYSCO's Pocomoke, Maryland operation." SYSCO has also signed
a letter of intent to acquire a third custom-cutting meat specialist, Malcolm
Meats. This acquisition, located near Toledo, Ohio, is expected to close by
December.
"Strong economic growth and high consumer confidence continue to
provide exciting opportunities," Mr. Lindig said in conclusion. "As we move into
the second quarter, we anticipate additional efficiencies and strong ongoing
growth. We remain committed to supporting the needs of our customers and
assisting them in achieving success. Last year we strengthened that commitment
by formalizing our objectives and strategies for providing complete customer
satisfaction through the C.A.R.E.S. initiative - Customers Are Really Everything
to SYSCO. By enabling our customers to be successful, we continue to build a
solid framework for our own success and position SYSCO to achieve its financial
objectives."
<PAGE>
The comparative financial data for the first quarter of fiscal years 2000 and
1999 are summarized below.
<TABLE>
<CAPTION>
($000 omitted) For the 13 Weeks Ended
-----------------------------------------------------
Oct. 2, 1999 Sept. 26, 1998
-------------------------- -----------------------
<S> <C> <C>
Sales $ 4,657,034 $ 4,192,630
Costs and expenses
Cost of sales 3,793,200 3,426,045
Operating expenses 674,244 607,812
Interest expense 17,944 16,931
Other, net (189) 170
--------------- -------------
Total costs and expenses 4,485,199 4,050,958
--------------- -------------
Earnings before income taxes 171,835 141,672
Income taxes 66,156 55,252
---------------- -------------
Net earnings before accounting change 105,679 86,420
Cumulative effect of accounting change (8,041) - - -
---------------- -------------
Net earnings $ 97,638 $ 86,420
================ =============
Earnings before accounting change:
Basic earnings per share $ 0.32 $ 0.26
================ =============
Diluted earnings per share $ 0.32 $ 0.26
================ =============
Cumulative effect of accounting change:
Basic earnings per share $ (0.02) $ - - -
================ =============
Diluted earnings per share $ (0.02) $ - - -
================ =============
Net earnings:
Basic earnings per share $ 0.30 $ 0.26
================ =============
Diluted earnings per share $ 0.29 $ 0.26
================ =============
Average shares outstanding 328,925,219 334,849,272
================ =============
Diluted average shares outstanding 333,487,155 338,184,255
================ =============
</TABLE>
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, the company provides products and
services to approximately 325,000 restaurants, healthcare and educational
institutions, lodging establishments and other foodservice operations. The SYSCO
distribution network extends throughout the entire contiguous United States, as
well as portions of Alaska and Canada.
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, continued acceptance of SYSCO Brand products,
industry growth, second quarter projections, improved operating efficiencies
related to information systems and acquisitions. 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 a competitive edge, risks relating to the integration of
acquired companies, the company's low margins, leverage and debt risks and other
risk factors detailed in the company's Form 10-K for the fiscal year ended July
3, 1999 filed with the Securities and Exchange Commission.
