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Sysco Annual Report, Year Ended Jul 3, 2004

Filing Date
Filed September 16, 2004
Period End
July 3, 2004
Security
SYY
In the record · 2016–202610-K1210-Q328-K147

SYY filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 147 current reports (8-K) between 2016 and 2026.

  1. FY2017 annual report10-K · Aug ’17Aug ’17
  2. Material agreement8-K · Feb ’20Feb ’20
  3. Leadership change8-K · Feb ’22Feb ’22
  4. Leadership change8-K · Nov ’25Nov ’25

01—Abstract

Summary

Summary of the 10-K filed September 16, 2004. Cited figures are marked; the original filing is the authoritative source.

Sysco Corporation (SYY) reported fiscal 2004, a 53-week year ended July 3, 2004, in this Form 10-K.

Sales rose 12.2% to $29.34 billiona from $26.14 billion, and net earnings increased 16.6% to $907.2 million, or $1.37 diluted earnings per share. The filing states that the additional week contributed an estimated 2.2% to sales growth and that adjusted sales growth was 10.0%. Management said rising product costs, estimated at 6.3% for the year and 8.0% in the fourth quarter, contributed to a softer foodservice market, and that sales growth slowed in the latter half of the fourth quarter and continued slowing into the first quarter of fiscal 2005.

Gross margin as a percentage of sales declined, with cost of sales at 80.7% of sales versus 80.3% in fiscal 2003. Operating expenses fell to 14.1% of sales from 14.7%, helped by operating efficiencies and a $19.1 millionb gain on life insurance assets, partly offset by a $39.9 million increase in net pension costs. Cash from operations declined to $1.19 billion from $1.37 billion, mainly because cash taxes paid rose to $344.4 million from $28.7 million as supply chain tax deferrals began reversing.

Long-term debt to total capitalization was 32.4%, below management's 35% to 40% target range, and the company repurchased 16.45 million shares for $608.5 millionc during the year. The company plans capital expenditures of $475 million to $500 million in fiscal 2005 and continues its National Supply Chain project, with the first regional distribution center in Front Royal, Virginia expected to become operational in the third quarter of fiscal 2005. Sysco also notes that it expects to incur an additional $40 million to $50 million in National Supply Chain expenses in fiscal 2005.

02—Key points

Key Highlights

  1. Net sales of $29.34 billion, up 12.2% from $26.14 billion; adjusted for the 53rd week, growth was 10.0%.
  2. Net earnings of $907.2 million, up 16.6%; diluted EPS of $1.37 versus $1.18 in fiscal 2003.
  3. Cost of sales rose to 80.7% of sales from 80.3%, reflecting product cost inflation of 6.3% for the year and 8.0% in the fourth quarter.
  4. Operating expenses improved to 14.1% of sales from 14.7%, aided by efficiencies and a $19.1 million life insurance gain.
  5. Cash from operations fell to $1.19 billion from $1.37 billion as cash taxes paid increased to $344.4 million.
  6. Repurchased 16.45 million shares for $608.5 million; long-term debt to capitalization of 32.4% is within a 35% to 40% target range, below it.
  7. Management reported slowing sales growth in the latter half of the fourth quarter that continued into the first quarter of fiscal 2005.

03—Questions

Frequently Asked Questions

  1. How did Sysco perform in fiscal 2004?

    Sales grew 12.2% to $29.34 billion and net earnings grew 16.6% to $907.2 million, with diluted EPS of $1.37. The filing notes the 53rd week added an estimated 2.2% to sales growth, leaving adjusted sales growth at 10.0%.

  2. What is the impact of rising product costs?

    Product cost increases were estimated at 6.3% for the year and 8.0% in the fourth quarter. Management said these increases softened the foodservice market and reduced gross margin as a percentage of sales, with cost of sales rising to 80.7% of sales from 80.3%.

  3. Why did operating cash flow decline?

    Net cash from operations fell to $1.19 billion from $1.37 billion. The filing attributes this mainly to cash taxes paid rising to $344.4 million from $28.7 million as deferred supply chain tax payments came due, along with higher receivables and inventory balances.

  4. What are Sysco's capital allocation plans?

    Capital expenditures are estimated at $475 million to $500 million for fiscal 2005. The company repurchased $608.5 million of stock in fiscal 2004, had 11.94 million shares remaining under its repurchase authorization as of August 20, 2004, and declared a quarterly dividend of $0.13 per share.

  5. What is the status of the National Supply Chain project?

    The project is building regional distribution centers. The Northeast Redistribution Center in Front Royal, Virginia is expected to be operational in the third quarter of fiscal 2005, and the company expects $40 million to $50 million in additional project expenses in fiscal 2005 over fiscal 2004.

04—Continue

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