NEWS RELEASE
SYSCO Corporation ------------
1390 Enclave Parkway
Houston, Texas 77077-2099
(281) 584-1390
FOR MORE INFORMATION
CONTACT: Diane Day Sanders
Vice President and Treasurer
SYSCO's First Quarter EPS Grows 34 Percent On 15 Percent Sales Gain
HOUSTON, OCTOBER 18, 2000 -- SYSCO Corporation (NYSE: SYY) announced today
that results of operations for the first quarter of fiscal 2001 ended September
30, 2000 were exceptionally strong. Diluted earnings per share reached $0.43, a
34 percent gain over fiscal 2000 first quarter earnings per share of $0.32
before an accounting change. The strong sales momentum experienced in fiscal
2000 continued into the initial quarter of the new fiscal year, with sales
increasing to $5.4 billion, 15 percent higher than the $4.7 billion attained
during the comparable period of fiscal 2000. Net earnings grew to $144.0
million, 36 percent above the $105.7 million earned last year, prior to the
accounting change. Real sales growth for the quarter was 8.2 percent, after
adjusting overall sales growth by 5.25 percent for acquisitions and 1.69 percent
for food cost inflation.
"Customer satisfaction is paramount to SYSCO," said Charles H. Cotros,
chairman and chief executive officer. "Our entire focus continues to reflect the
C.A.R.E.S. philosophy (Customers Are Really Everything to SYSCO) ingrained in
the very fiber of our culture and we are benefiting along with our customers as
their dining establishments prosper. Growth in the independent operator sector
remains particularly strong, as our marketing associate-served sales continue to
grow at double-digit levels, now representing 56.2 percent of broadline sales.
We are also pleased with the continued growth of the chain/multi-unit customer
segment, including new healthcare business added during the quarter.
"The outstanding quality, consistency and labor-saving benefits of SYSCO's
branded products continue to be favored by marketing associate-served customers,
driving branded sales to 52.6 percent of this customer segment. In addition,
SYSCO's uniform information system is providing more detailed information to
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access customer preferences and boost our service capabilities to an even
greater level. Other factors that contributed to SYSCO's stellar earnings
performance include the continuing healthy economic climate and mild weather
patterns which positively impact eating away from home. Gross margins and
expenses as a percent of sales were higher this year, primarily due to product
and customer mix. Despite fuel price increases, fuel costs increased only 0.07
as a percent of sales due to offsetting efficiency gains."
He also noted that the company continues to expand its "fold-out" strategy,
having announced last week approval for the construction of a facility to serve
the Las Vegas market, where site selection for that distribution center
currently is underway. The "fold-out" strategy involves building a stand-alone
distribution center in a location that has an existing sales base that is being
served from a distant SYSCO location. Construction also is progressing on
facilities in the Hampton Roads area of Virginia and near Sacramento, California
and all complexes will be operational during calendar 2001.
"During the last several quarters, a combination of the same factors
discussed above has allowed SYSCO to exceed its long-term sustainable objective
of leveraging real sales growth a minimum of five percentage points and we will
aggressively focus on continuing to exceed that goal," Mr. Cotros said in
summary.
"The economy continues to favorably influence consumer dining patterns and
51 percent of the food dollar spent is now captured by the foodservice industry
in comparison to the retail supermarket industry," he continued. "We are excited
about the remainder of the year and the many opportunities we envision to
increase our marketing associate-served customer base and aggressively pursue
internal and external growth through "fold-outs" and acquisitions. The American
dining public has a love affair with eating foods prepared away from home and a
growing dependence on meals prepared by others, given the demanding pace of
today's lifestyles. Our mission is to help our customers be successful by
providing them outstanding service and consistent quality products."
SYSCO, listed on the New York Stock Exchange, is the largest foodservice
marketing and distribution organization in North America. Generating annual
sales of $19.3 billion for the fiscal year ended July 1, 2000, the company
provides products and services to approximately 356,000 restaurants, healthcare
and educational institutions, lodging establishments and other foodservice
operations. The SYSCO distribution network extends throughout the entire
contiguous United States and Alaska, as well as portions of Canada.
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The comparative financial data (unaudited) for the first quarter of fiscal
years 2001 and 2000 are summarized below.
<TABLE>
<CAPTION>
For the 13 Weeks Ended
------------------------------------------------------------
Sept. 30, Oct. 2,
2000 1999
------------------------- -------------------------
<S> <C> <C>
($000 omitted)
Sales $ 5,360,174 $ 4,657,034
Costs and expenses
Cost of sales 4,322,784 3,793,200
Operating expenses 787,497 674,244
Interest expense 17,401 17,944
Other, net (633) (189)
------------------------- -------------------------
Total costs and expenses 5,127,049 4,485,199
------------------------- -------------------------
Earnings before income taxes 233,125 171,835
Income taxes 89,170 66,156
------------------------- -------------------------
Net earnings before accounting change 143,955 105,679
Cumulative effect of accounting change -- (8,041)
------------------------- -------------------------
Net earnings $ 143,955 $ 97,638
========================= =========================
Earnings before accounting change:
Basic earnings per share $ 0.43 $ 0.32
========================= =========================
Diluted earnings per share $ 0.43 $ 0.32
========================= =========================
Cumulative effect of accounting change:
Basic earnings per share $ -- $ (0.02)
========================= =========================
Diluted earnings per share $ -- $ (0.02)
========================= =========================
Net earnings:
Basic earnings per share $ 0.43 $ 0.30
========================= =========================
Diluted earnings per share $ 0.43 $ 0.29
========================= =========================
Average shares outstanding 332,025,934 328,925,219
========================= =========================
Diluted average shares outstanding 337,092,765 333,487,155
========================= =========================
</TABLE>
Certain statements made herein are forward-looking statements under the Private
Securities Litigation Reform Act of 1995. They include statements regarding
anticipated industry growth, real sales growth and earnings per share growth,
and implementation and timing of "fold-outs" and acquisitions. These statements
are based on management's current growth expectations and estimates; actual
results may differ materially due to certain risks and uncertainties. For
example, industry growth may be affected by changes in general economic
conditions. Real sales growth and earnings per share growth may be affected by
competitive price pressures, availability of supplies, work stoppages,
successful integration of acquired companies, conditions in the economy,
industry growth and internal factors, such as the ability to control expenses.
The decision to pursue "fold-outs" and acquisitions and expenditures for such
could vary depending upon construction schedules and the timing of other
purchases, such as fleet and equipment, while "fold-out" and acquisition timing
and results could be impacted by competitive conditions, labor issues and other
matters. For a discussion of these and other factors that could cause actual
results to differ from those described in the forward-looking statements, see
the Company's Annual Report on Form 10-K for the fiscal year ended July 1, 2000
as filed with the Securities and Exchange Commission.
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