01—Abstract
Summary
Summary of the 10-K filed September 27, 2000. Cited figures are marked; the original filing is the authoritative source.
Sysco Corporation's Form 10-K for fiscal 2000 (year ended July 1, 2000) reports record results for the largest North American distributor of food to the foodservice industry, serving approximately 356,000 customers.
Sales rose 11% to $19.30 billiona from $17.42 billion, and net earnings increased $83.3 million, or approximately 23%, to $445.6 million. Diluted earnings per share were $1.33, compared with $1.08 in fiscal 1999. Earnings before the cumulative effect of an accounting change rose approximately 25%, and the company cited its twenty-fourth consecutive year of increased earnings before that effect.
Return on average shareholders' equity before the accounting change was approximately 29%, compared with 26% in 1999. Operating cash flow was $708.7 millionb, and capital expenditures were $266.4 million. The balance sheet strengthened over the year.
Total assets grew to $4.81 billionc from $4.10 billion, largely reflecting acquisitions, including Watson Foodservice and FreshPoint, and goodwill and intangibles rose to $503.0 million from $302.1 million. Long-term debt was $1.02 billion, and the long-term debt to total capitalization ratio fell to 36.8% from 41.1%. Shareholders' equity rose to $1.76 billion.
The company raised its quarterly dividend to twelve cents per share and guided fiscal 2001 capital expenditures to a range of $325 million to $375 milliond. Management also flagged risks including low margins, economic sensitivity, labor relations, and integration of acquired companies, and noted an $8.0 million after-tax, non-cash charge from adopting SOP 98-5.
02—Key points
Key Highlights
- Sales increased 11% to $19.30 billion in fiscal 2000, driven by strong U.S. economic growth and foodservice industry growth; acquisitions represented 3.5% of total sales.
- Net earnings rose approximately 23% to $445.6 million, with diluted earnings per share of $1.33 versus $1.08 in fiscal 1999.
- Earnings before the cumulative effect of an accounting change rose approximately 25%, marking the twenty-fourth consecutive year of increased earnings before that effect.
- Return on average shareholders' equity before the accounting change was approximately 29%, up from 26% in 1999.
- Long-term debt to total capitalization improved to 36.8% from 41.1%, and the company bought back 5,660,400 shares for $186.3 million in fiscal 2000.
- The quarterly dividend increased to twelve cents per share from ten cents, and cash dividends for the year totaled $0.44 per share.
- Operating cash flow was $708.7 million, and fiscal 2001 capital expenditures are expected to be $325 million to $375 million.
03—Questions
Frequently Asked Questions
How did Sysco perform financially in fiscal 2000?
Sysco reported sales of $19.30 billion, up 11%, and net earnings of $445.6 million, up approximately 23%. Diluted earnings per share were $1.33. The results included an $8.0 million after-tax, non-cash charge from adopting SOP 98-5 on start-up costs.
What is Sysco's business?
Sysco describes itself as the largest North American distributor of food and food-related products to the foodservice industry. It serves approximately 356,000 customers, including restaurants, healthcare and educational facilities, and lodging establishments. Restaurants made up 65% of fiscal 2000 sales.
Did acquisitions contribute to growth and the balance sheet?
Yes. Sysco acquired Newport Meat, Doughtie's Foods, Buckhead Beef, Malcolm Meats, Watson Foodservice and FreshPoint during the period. Acquisitions represented 3.5% of fiscal 2000 sales, and goodwill and intangibles increased to $503.0 million from $302.1 million.
How is Sysco managing its debt and shareholder returns?
Long-term debt was $1.02 billion, and the debt-to-capitalization ratio fell to 36.8% from 41.1%. The company repurchased 5,660,400 shares for $186.3 million in fiscal 2000 and raised its quarterly dividend to twelve cents per share.
What key risks does Sysco highlight?
Sysco cites low profit margins and sensitivity to economic conditions, leverage and debt service, product liability claims, supply interruptions, labor relations with about 8,000 union-represented employees, and the integration of acquired companies. It states these factors have not had a material adverse impact on past operations.
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