01—Abstract
Summary
Summary of the 10-K filed September 25, 1997. Cited figures are marked; the original filing is the authoritative source.
Sysco Corporation's annual report for the fiscal year ended June 28, 1997 shows net sales of $14.45 billiona, up 8% from $13.40 billion in fiscal 1996, with net earnings of $302.5 million (up about 9%) and earnings per share of $1.71 versus $1.52.
The company describes itself as engaged in marketing and distributing a wide range of food and related products to the foodservice industry, serving traditional customers such as restaurants, hospitals, schools and hotels, as well as chain restaurants through its SYGMA Network. Restaurants accounted for 61%b of fiscal 1997 sales, and no single customer represented as much as 5% of sales. Management described fiscal 1997 as the twenty-first consecutive year of increased earnings.
The balance sheet and cash flow show operating cash flow of $498.1 millionc in fiscal 1997, up from $350.4 million, while capital expenditures were $210.9 million. Long-term debt rose to $685.6 million, and long-term debt to capitalization increased to 33% from 28%, reflecting debt-financed share repurchases. Treasury stock purchases totaled $305.3 million for 9,016,400 shares, and shareholders' equity declined to $1.40 billion from $1.47 billion.
The company reported a return on average shareholders' equity of approximately 21%d, compared with 19% in fiscal 1996 and 1995. The filing also notes that Sysco operates 99 distribution facilities and self-serve centers, a fleet of about 5,380 delivery vehicles, and approximately 32,000 employees, 21% of whom are union members.
Fiscal 1998 capital expenditures are expected to be between $220 million and $240 million. Management stated that pending legal proceedings are not expected to have a material adverse effect on the company's financial position or results of operations.
02—Key points
Key Highlights
- Net sales rose 8% to $14.45 billion in fiscal 1997, compared with $13.40 billion in fiscal 1996.
- Net earnings increased about 9% to $302.5 million, and earnings per share rose to $1.71 from $1.52.
- Operating cash flow increased to $498.1 million from $350.4 million in fiscal 1996.
- Long-term debt to capitalization rose to 33% from 28%, as the buyback program was partly financed with long-term debt.
- Treasury stock purchases totaled $305.3 million for 9,016,400 shares in fiscal 1997.
- Return on average shareholders' equity was approximately 21%, compared with 19% in fiscal 1996 and 1995.
- No single traditional foodservice customer accounted for as much as 5% of sales, and no chain restaurant customer for as much as 3%.
03—Questions
Frequently Asked Questions
How did Sysco perform financially in fiscal 1997?
Sysco reported sales of $14,454,589 thousand, up 8% from fiscal 1996, and net earnings of $302,533 thousand, up about 9%. Earnings per share were $1.71 compared with $1.52. The filing describes fiscal 1997 as the twenty-first consecutive year of increased earnings.
Who are Sysco's customers?
Traditional foodservice customers include restaurants, hospitals, schools, hotels and industrial caterers, while chain restaurant customers include regional pizza and national hamburger, chicken and steak chains. Restaurants made up 61% of sales in fiscal 1997, and hospitals and nursing homes made up 11%.
How is Sysco financing its growth and share repurchases?
Capital expenditures were $210.9 million in fiscal 1997 and are expected to be $220 million to $240 million in fiscal 1998. Long-term debt reached $685.6 million at June 28, 1997, with about 94% at fixed rates averaging 7.28%. In April 1997, Sysco issued $150 million of new debt under its shelf registration, and the company said its long-term debt to capitalization ratio was 33%, within its target range of 30% to 40%.
What is Sysco's physical footprint and workforce?
Sysco operates 96 facilities within the United States and three in Canada, a fleet of approximately 5,380 delivery vehicles, and about 32,000 employees. About 21% of employees are represented by unions, primarily the International Brotherhood of Teamsters.
Are there significant legal risks disclosed in the filing?
The company states it is engaged in various legal proceedings that have not been fully adjudicated. Management believes these will not have a material adverse effect on the consolidated financial position or results of operations when ultimately concluded.
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