Exhibit 99.1
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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'S RECORD $19.3 BILLION SALES DRIVES FISCAL 2000 EPS UP 26 PERCENT
FOR 24TH CONSECUTIVE YEAR OF INCREASES
HOUSTON, AUGUST 2, 2000 -- SYSCO Corporation (NYSE: SYY) today reported a
26 percent increase in diluted earnings per share of $1.36, before a charge for
an accounting change, for the 52 weeks of fiscal 2000, which ended July 1, 2000.
This represented the 24th consecutive year of earnings increases and compares to
$1.08 per share earned in the 53 weeks of fiscal 1999. Sales reached a record
$19.3 billion, which was 11 percent above the $17.4 billion attained in fiscal
1999. Net earnings, before the first quarter $8 million accounting change that
required start up costs to be expensed as incurred, grew 25 percent to $453.6
million versus the $362.3 million net earnings achieved last year.
These results are attributed to a continued focus on customer service,
internal efficiencies and SYSCO Brand products. Fourth quarter results showed a
strengthening of trends seen all year. Diluted earnings per share for the
13-week fourth quarter were $0.43, a noteworthy 23 percent higher when compared
to the $0.35 per share earned in the 14-week fourth quarter of fiscal 1999.
Similarly, when comparing the 13-week versus 14-week quarters, sales totaled
$5.3 billion, a 9 percent gain above sales of $4.8 billion during last year's
final quarter. Net earnings reached $144 million, 23 percent more than fourth
quarter 1999 net earnings of $116.9 million.
"High levels of economic growth and consumer confidence throughout SYSCO's
fiscal year, as well as mild winter weather, favorably impacted our sales
growth," said Charles H. Cotros, chairman and chief executive officer. "Real
growth of 4 percent for the meals-prepared-away-from-home industry in the March
quarter (the latest calculated) was the strongest that has occurred in the last
11 quarters, according to industry sources. During SYSCO's fiscal 2000, our
39,000-plus loyal employees exemplified our 30-year commitment to outstanding
customer service, allowing SYSCO to outperform its industry again.
"Strategies that have been pivotal to our results include a sustained focus
on growing both marketing associate-served sales and the SYSCO Brand. Sales to
that customer segment represented about 55.4 percent of SYSCO's traditional
foodservice sales during fiscal 2000 compared to 54.1 percent for the same
period last year. SYSCO Brand product sales as a percent of marketing
associate-served sales also continued to trend upward, reaching 51.4 percent for
the fourth quarter and 50.4 for the entire year, as compared to 48.8 percent in
last year's fourth quarter and 48.1 percent for fiscal 1999."
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"In addition, the specialty meat-cutting and fresh produce operations
acquired during the past year marked a new direction for SYSCO - expansion via
widening product breadth. We now offer customers in certain areas precision,
custom-cut CERTIFIED ANGUS BEEF (TM) steaks and other protein products, as well
as a broader spectrum of specialty produce items. The addition of these
companies not only has enhanced our competitive advantage, but also has
strengthened sales and profitability, as the specialty meat and produce
companies have exceeded performance expectations and are contributing to
earnings. Likewise, we are pleased with the two broadline companies acquired
during the year - Watson Foods in Lubbock, Texas and Doughtie's Foods, located
in the Hampton Roads area of Virginia, both of which are premier distributors in
their respective marketplaces and have expanded our coverage in those areas. In
the aggregate, annualized sales of the fiscal 2000 acquisitions totaled about
$l.3 billion," Mr. Cotros continued.
"Another internal objective was the completion of the installation of the
SYSCO Uniform System (SUS), SYSCO's enterprise-wide technology solution," he
said. "The new system is improving productivity and efficiency and giving us
more sophisticated tools to fulfill customers' needs and desires, moving us
closer to the error-free service we aspire to through the C.A.R.E.S. initiative
(Customers Are Really Everything to SYSCO)."
SYSCO also has been active in Internet-based business-to-business (B2B)
strategies, according to Mr. Cotros. Last week the company announced the
formation, in conjunction with Cargill, Inc., McDonald's Corporation and Tyson
Foods, Inc., of electronic Foodservice Network (eFS Network), a company that
will operate an independent B2B marketplace to facilitate sales and purchases to
the foodservice industry. Based in Chicago, eFS Network will be open to all
segments of the industry - from foodservice suppliers and distributors to
multi-unit operators - to help maximize Internet-based efficiencies and savings
for its participants across the entire supply chain. He said this arrangement is
unlike typical B2B strategies because it will allow participation from all
segments of the food supply chain.
Mr. Cotros also indicated that fiscal 2000 real sales growth, after the
effects of acquisitions and inflation, and adjusted for the extra week in fiscal
1999, was 9.2 percent and, for the fourth quarter, adjusted real sales growth
was 8.9%. Acquisitions represented 3.5 percent of total sales for the year and
6.5 percent for the final quarter. Food costs, which experienced minimal
inflation during the first two quarters of the year and slight deflation during
the third fiscal quarter, returned to about 2.2 percent inflation during the
final quarter, resulting in approximately 0.4 percent inflation for the entire
year, he noted.
In concluding his remarks Mr. Cotros commented, "The close of fiscal 2000
marked the culmination of Bill Lindig's 30-year career with SYSCO. Our former
chairman strongly influenced SYSCO's growth and future direction and was
instrumental in effecting a smooth transition for the new management team. More
than ever before, SYSCO's well-executed strategies, as well as programs to
control expenses, position us to provide outstanding service to our customers.
We plan ongoing growth internally, as well as externally, through product and
geographic extension, and are very optimistic about our future in an
ever-expanding market."
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SYSCO is the largest foodservice marketing and distribution organization in
North America. SYSCO provides its products and services to about 325,000 to
350,000 customers. The SYSCO distribution network currently extends throughout
the entire contiguous United States and Alaska as well as portions of Canada.
Certain statements made herein are forward-looking statements under the
Private Securities Litigation Reform Act of 1995. They include statements
regarding strategies and programs that position the company to control expenses
and to provide outstanding service and continued acceleration of growth, both
internally and externally. 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 internal risks that management's plans may not produce
desired results, the risks relating to the foodservice distribution industry's
sensitivity to economic conditions; the successful completion and integration of
fold-outs, the successful integration of acquisitions; the risk of interruption
of supplies due to lack of long-term contracts, severe weather, work stoppages
or otherwise; competition; and other risk factors detailed in SYSCO's Form S-3
(File No. 333-34036) filed with the Securities and Exchange Commission on April
5, 2000.
The comparative financial data for the fourth quarters of fiscal years 2000
and 1999 are summarized below.
($000 omitted except for share and per share
data)
FOR THE PERIOD ENDED
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JULY 1, 2000 JULY 3, 1999
(13 WEEKS) (14 WEEKS)
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SALES $ 5,271,764 $4,818,633
Costs and expenses
Cost of sales 4,255,205 3,909,856
Operating expenses 764,594 697,444
Interest expense 17,854 19,097
Other, net (131) 641
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Total costs and expenses 5,037,522 4,627,038
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EARNINGS BEFORE INCOME TAXES 234,242 191,595
Income taxes 90,183 74,722
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NET EARNINGS $ 144,059 $ 116,873
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BASIC EARNINGS PER SHARE $ 0.43 $ 0.35
DILUTED EARNINGS PER SHARE $ 0.43 $ 0.35
BASIC AVERAGE SHARES OUTSTANDING 331,648,095 330,586,514
DILUTED AVERAGE SHARES OUTSTANDING 336,636,328 334,811,582
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The comparative financial data for fiscal years 2000 and 1999 are summarized
below.
($000 omitted except for share and per
share data)
For the Period Ended
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July 1, 2000 July 3, 1999
(52 Weeks) (53 Weeks)
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TOTAL SALES $ 19,303,268 $ 17,422,815
Costs and expenses
Cost of sales 15,649,551 14,207,860
Operating expenses 2,843,755 2,547,266
Interest expense 70,832 72,839
Other, net 1,522 963
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Total costs and expenses 18,565,660 16,828,928
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EARNINGS BEFORE INCOME TAXES 737,608 593,887
Income taxes 283,979 231,616
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EARNINGS BEFORE CUMULATIVE 453,629 362,271
EFFECT OF ACCOUNTING CHANGE
Cumulative effect of accounting change (8,041) -----
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NET EARNINGS $ 445,588 $ 362,271
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EARNINGS BEFORE ACCOUNTING CHANGE:
BASIC EARNINGS PER SHARE $ 1.38 $ 1.09
DILUTED EARNINGS PER SHARE 1.36 $ 1.08
CUMULATIVE EFFECT OF ACCOUNTING CHANGE:
BASIC EARNINGS PER SHARE $ (0.02) $ ----
DILUTED EARNINGS PER SHARE $ (0.02) $ ----
NET EARNINGS:
BASIC EARNINGS PER SHARE $ 1.35 $ 1.09
DILUTED EARNINGS PER SHARE $ 1.33 $ 1.08
BASIC AVERAGE SHARES OUTSTANDING 329,582,474 332,913,546
DILUTED AVERAGE SHARES OUTSTANDING 334,777,928 336,796,669
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