Sysco Corporation (NYSE: SYY) (“Sysco” or the “company”) today
announced financial results for its 13-week second fiscal quarter
ended December 30, 2023.
Key financial results for the second quarter of
fiscal year 2024 include the following (comparisons are to the same
period in fiscal year 2023):
- Sales increased 3.7%; U.S.
Foodservice volume increased 3.4%; U.S. local volumes grew
2.9%;
- Gross profit increased 4.9% to $3.5
billion;
- Operating income increased 9.2% to
$700.0 million, and adjusted1 operating income increased 9.2% to
$744.9 million;
- EBITDA increased 82.7% to $914.3
million, and adjusted EBITDA increased 11.6% to $927.5
million2;
- EPS3 increased 192.9% to $0.82,
compared to $0.28 in the same period last year, and adjusted1 EPS
increased 11.3% to $0.89;
- First half cash flow from
operations increased 70.0% to $855.9 million, and free cash flow4
increased 140.5% to $527.4 million;
- The company now expects to return
approximately $2.25 billion back to shareholders in fiscal
year 2024, raising share repurchase expectations from
$750 million to $1.25 billion; and
- Reaffirming fiscal year 2024
guidance expectations for top- and bottom-line growth.
“Second quarter results included adjusted EPS
growth of over 11%, fueled by sales and volume growth, combined
with positive operating leverage, as we continue to effectively
manage margins. Our balanced efforts to deliver compelling top- and
bottom-line growth were driven by sequential improvements in volume
growth, including local performance, as well as supply chain
productivity and implementation of structural cost-out actions.
Sysco’s industry leading profitability, size and scale advantages,
and strong balance sheet represent a position of strength.
Combining our advantages with Sysco’s discipline on profitable
growth, we expect to deliver strong results for the remainder of
fiscal year 2024 and beyond,” said Kevin Hourican, Sysco’s
President and Chief Executive Officer.
1 Adjusted financial results, including adjusted
operating expense, adjusted operating income (loss), adjusted
earnings per share (EPS) and adjusted EBITDA, are non-GAAP
financial measures that exclude certain items, which primarily
include acquisition-related costs, restructuring and severance
costs, and transformational project costs. Last year’s Certain
Items include a pension settlement charge that resulted from the
purchase of a nonparticipating single premium group annuity
contract that transferred defined benefit plan obligations to an
insurer, adjustments to our bad debt reserve specific to aged
receivables existing prior to the COVID-19 pandemic and adjustments
to a product return allowance related to COVID-related personal
protection equipment inventory.2 Earnings before interest, taxes,
depreciation and amortization (EBITDA) and adjusted EBITDA are
non-GAAP financial measures. Reconciliations of all non-GAAP
financial measures to the nearest corresponding GAAP financial
measure are included at the end of this release.3 Earnings per
share (EPS) are shown on a diluted basis, unless otherwise
specified.4 Free cash flow is a non-GAAP financial measure that
represents net cash provided from operating activities less
purchases of plant and equipment and includes proceeds from sales
of plant and equipment. Reconciliations for all non-GAAP financial
measures are included at the end of this release.
“Our second quarter operating profit included
our fifth consecutive quarter of positive operating leverage, as
gross profit expanded at a faster rate than operating expenses.
Additionally, our balanced approach to capital allocation
demonstrates the importance of investing in the business and
rewarding our shareholders, all anchored by our strong balance
sheet and consistent cash generation. Looking ahead, we now expect
to return approximately $2.25 billion back to shareholders in
fiscal year 2024, through meaningful share repurchases and
dividends. Our positive momentum through the first half gives us
confidence in reiterating our fiscal year 2024 guidance of
mid-single digit sales growth to approximately $80 billion and five
to ten percent adjusted EPS growth to $4.20 to $4.40,” said Kenny
Cheung, Sysco’s Chief Financial Officer.
Second Quarter Fiscal
Year 2024 Results
(comparisons are to the same period in fiscal year 2023)
Total Sysco
Sales for the second quarter increased 3.7% to
$19.3 billion.
Gross profit increased 4.9% to $3.5 billion, and
gross margin increased 21 basis points to 18.2%. Product cost
inflation was 1.1% at the total enterprise level, as measured by
the estimated change in Sysco’s product costs, primarily in the
meat and frozen categories. The increase in gross profit for the
second quarter was primarily driven by higher volumes, as well as
continued progress with effective management of product cost
inflation and our strategic sourcing initiative.
Operating expenses increased 3.9%, driven by
increased volumes and cost inflation, partially offset by improved
productivity. Adjusted operating expenses increased 3.8%.
Operating income increased 9.2% to $700.0
million, and adjusted operating income increased 9.2% to
$744.9 million.
U.S. Foodservice Operations
The U.S. Foodservice Operations segment results
were driven by improved volumes, including positive local case
performance, combined with effective margin management, resulting
in continued profit growth.
Sales for the second quarter increased 3.2% to
$13.5 billion. Total case volume within U.S. Foodservice grew 3.4%
for the second quarter, while local case volume within U.S.
Foodservice increased 2.9%.
Gross profit increased 3.4% to $2.6 billion, and
gross margin increased 4 basis points to 19.1%.
Operating expenses increased 1.5%, and adjusted
operating expenses increased 1.4%.
Operating income increased 7.4% to $839.0
million, and adjusted operating income increased 7.6% to $851.1
million.
International Foodservice Operations
The International Foodservice Operations segment
delivered another quarter of sales and profit growth.
Sales for the second quarter increased 9.6% to
$3.6 billion. On a constant currency basis5, sales for the second
quarter were $3.5 billion, an increase of 6.4%. Foreign exchange
rates increased both International Foodservice Operations sales by
3.2% and total Sysco sales by 0.5% during the quarter.
Gross profit increased 13.4% to $708.1 million,
and gross margin increased 67 basis points to 19.7%. On a constant
currency basis5, gross profit increased 9.5% to $684.0 million.
Foreign exchange rates increased both International Foodservice
Operations gross profit by 3.9% and total Sysco gross profit by
0.7% during the quarter.
Operating expenses increased 10.3%, and adjusted
operating expenses increased 11.0%. On a constant currency basis5,
adjusted operating expenses increased 6.9%. Foreign exchange rates
increased both International Foodservice Operations operating
expenses by 4.1% and total Sysco operating expenses by 0.9% during
the quarter.
Operating income increased 44.4% to $82.9
million, and adjusted operating income increased 30.1% to $102.4
million. On a constant currency basis5, adjusted operating income
was $100.6 million, an increase of 27.8%. Foreign exchange rates
increased both International Foodservice Operations operating
income by 2.3% and total Sysco operating income by 0.2% during the
quarter.
Balance Sheet, Cash Flow and Capital
Spending
As of the end of the quarter, the company had a
cash balance of $962.2 million.
During the first 26 weeks of fiscal year 2024,
Sysco returned $705.5 million to shareholders via $199.9 million of
share repurchases and $505.6 million of dividends.
Cash flow from operations was $855.9 million for
the first 26 weeks of fiscal year 2024, which was an increase of
$352.4 million over the prior year period.
Capital expenditures, net of proceeds from sales
of plant and equipment, for the first 26 weeks of fiscal year 2024
were $328.5 million.
Free cash flow4 for the first 26 weeks of fiscal
year 2024 was $527.4 million, which was an increase of $308.2
million over the prior year period.
5 Represents a constant currency adjustment,
which eliminates the impact of foreign currency fluctuations on
current year results. These adjusted measures are non-GAAP
financial measures. Reconciliations of all non-GAAP financial
measures to the nearest corresponding GAAP financial measure are
included at the end of this release.
Conference Call &
Webcast
Sysco will host a conference call to review the
company’s second quarter fiscal year 2024 financial results on
Tuesday, January 30, 2024, at 10:00 a.m. Eastern Daylight
Time. A live webcast of the call, accompanying slide presentation
and a copy of this news release will be available online at
investors.sysco.com.
|
Key Highlights: |
|
|
13-Week Period Ended |
26-Week Period Ended |
|
|
|
|
|
|
|
Financial Comparison: |
December 30, 2023 |
Change |
December 30, 2023 |
Change |
|
GAAP: |
|
|
|
|
|
Sales |
$19.3 billion |
3.7% |
$38.9 billion |
3.1% |
|
Gross Profit |
$3.5 billion |
4.9% |
$7.2 billion |
4.7% |
|
Gross Margin |
18.2% |
21 bps |
18.4% |
28 bps |
|
Operating Expenses |
$2.8 billion |
3.9% |
$5.7 billion |
3.6% |
|
Operating Income |
$700.0 million |
9.2% |
$1.5 billion |
9.1% |
|
Operating Margin |
3.6% |
18 bps |
3.9% |
21 bps |
|
Net Earnings |
$415.2 million |
NM |
$918.6 million |
51.4% |
|
Diluted Earnings Per Share |
$0.82 |
NM |
$1.81 |
52.1% |
|
|
|
|
|
|
|
Non-GAAP
(1): |
|
|
|
|
|
Gross Profit |
$3.5 billion |
4.9% |
$7.2 billion |
4.8% |
|
Gross Margin |
18.2% |
21 bps |
18.4% |
29 bps |
|
Operating Expenses |
$2.8 billion |
3.8% |
$5.6 billion |
3.4% |
|
Operating Income |
$744.9 million |
9.2% |
$1.6 billion |
9.9% |
|
Operating Margin |
3.9% |
19 bps |
4.1% |
25 bps |
|
EBITDA |
$914.3 million |
82.7% |
$1.9 billion |
36.1% |
|
Adjusted EBITDA |
$927.5 million |
11.6% |
$2.0 billion |
11.7% |
|
Net Earnings |
$449.0 million |
10.1% |
$990.6 million |
10.0% |
|
Diluted Earnings Per Share (2) |
$0.89 |
11.3% |
$1.96 |
11.4% |
|
|
|
|
|
|
|
Case Growth: |
|
|
|
|
|
U.S. Foodservice |
3.4% |
|
2.5% |
|
|
Local |
2.9% |
|
1.3% |
|
|
|
|
|
|
|
|
Sysco Brand Sales as a % of Cases: |
|
|
|
|
|
U.S. Broadline |
36.8% |
-5 bps |
37.0% |
0 bps |
|
Local |
46.9% |
22 bps |
47.2% |
38 bps |
| Note: |
|
(1) Reconciliations of all non-GAAP financial measures to the
nearest respective GAAP financial measures are included at the end
of this release. |
|
(2) Individual components in the table above may not sum to the
totals due to the rounding. |
|
NM Represents that the percentage change is not meaningful. |
|
|
Forward-Looking Statements
Statements made in this press release or in our
earnings call for the second quarter of fiscal year 2024 that look
forward in time or that express management’s beliefs, expectations
or hopes are forward-looking statements under the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements reflect the views of management at the time such
statements are made and are subject to a number of risks,
uncertainties, estimates, and assumptions that may cause actual
results to differ materially from current expectations. These
statements include statements concerning: the implications of the
COVID-19 pandemic and any expectations we may have with respect
thereto; our expectations regarding future improvements in
productivity; our belief that improvements in our organizational
capabilities will deliver compelling outcomes in future periods;
our expectations regarding improvements in international volume;
our expectations that our transformational agenda will drive
long-term growth; our expectations regarding the continuation of an
inflationary environment; our expectations regarding improvements
in the efficiency of our supply chain; our expectations regarding
the impact of our Recipe for Growth strategy and the pace of
progress in implementing the initiatives under that strategy; our
expectations regarding Sysco’s ability to outperform the market in
future periods; our expectations that our strategic priorities will
enable us to grow faster than the market; our expectations
regarding our efforts to reduce overtime rates and the incremental
investments in hiring; our expectations regarding the expansion of
our driver academy and our belief that the academy will enable us
to provide upward career path mobility for our warehouse colleagues
and improve colleague retention; our expectations regarding the
benefits of the six-day delivery and last mile distribution models;
our plans to improve the capabilities of our sales team; our plans
to refine our engineering labor standards; our expectations
regarding the impact of our growth initiatives and their ability to
enable Sysco to consistently outperform the market; our
expectations to exceed our growth target by the end of fiscal 2024;
our ability to deliver against our strategic priorities; economic
trends in the United States and abroad; our belief that there is
further opportunity for profit in the future; our future growth,
including growth in sales and earnings per share; the pace of
implementation of our business transformation initiatives; our
expectations regarding our balanced approach to capital allocation
and rewarding our shareholders; our plans to improve colleague
retention, training and productivity; our belief that our Recipe
for Growth transformation is creating capabilities that will help
us profitably grow for the long term; our expectations regarding
our long-term financial outlook; our expectations of the effects
labor harmony will have on sales and case volume, as well as
mitigation expenses; our expectations for customer acquisition in
the local/street space; our expectations regarding the
effectiveness of our Global Support Center expense control
measures; and our expectations regarding the growth and resilience
of our food away from home market.
It is important to note that actual results
could differ materially from those projected in such
forward-looking statements based on numerous factors, including
those outside of Sysco’s control. For more information concerning
factors that could cause actual results to differ from those
expressed or forecasted, see our Annual Report on Form 10-K for the
year ended July 1, 2023, as filed with the SEC, and our subsequent
filings with the SEC. We do not undertake to update our
forward-looking statements, except as required by applicable
law.
About Sysco
Sysco is the global leader in selling, marketing
and distributing food products to restaurants, healthcare and
educational facilities, lodging establishments and other customers
who prepare meals away from home. Its family of products also
includes equipment and supplies for the foodservice and hospitality
industries. With more than 72,000 colleagues, the company operates
334 distribution facilities worldwide and serves approximately
725,000 customer locations. For fiscal year 2023 that ended July 1,
2023, the company generated sales of more than $76 billion.
Information about our Sustainability program, including Sysco’s
2023 Sustainability Report and 2023 Diversity, Equity &
Inclusion Report, can be found at www.sysco.com.
For more information, visit
www.sysco.com or connect with Sysco on Facebook at
www.facebook.com/SyscoFoods. For important news and information
regarding Sysco, visit the Investor Relations section of the
company’s Internet home page at investors.sysco.com, which Sysco
plans to use as a primary channel for publishing key information to
its investors, some of which may contain material and previously
non-public information. In addition, investors should continue to
review our news releases and filings with the SEC. It is possible
that the information we disclose through any of these channels of
distribution could be deemed to be material information.
| |
| Sysco
Corporation and its Consolidated
SubsidiariesCONSOLIDATED RESULTS OF OPERATIONS
(Unaudited)(In Thousands, Except for Share and Per
Share Data) |
| |
Quarter Ended |
|
Year Ended |
| |
Dec. 30, 2023 |
|
Dec. 31, 2022 |
|
Dec. 30, 2023 |
|
Dec. 31, 2022 |
| |
|
|
|
|
|
|
|
|
Sales |
$ |
19,287,942 |
|
$ |
18,593,953 |
|
$ |
38,908,396 |
|
$ |
37,720,783 |
| Cost of sales |
|
15,774,309 |
|
|
15,244,337 |
|
|
31,746,991 |
|
|
30,882,312 |
| Gross profit |
|
3,513,633 |
|
|
3,349,616 |
|
|
7,161,405 |
|
|
6,838,471 |
| Operating expenses |
|
2,813,590 |
|
|
2,708,793 |
|
|
5,657,780 |
|
|
5,460,847 |
| Operating income |
|
700,043 |
|
|
640,823 |
|
|
1,503,625 |
|
|
1,377,624 |
| Interest expense |
|
149,680 |
|
|
132,042 |
|
|
284,014 |
|
|
256,192 |
| Other expense (income), net
(1) (2) |
|
5,245 |
|
|
330,305 |
|
|
11,885 |
|
|
348,054 |
| Earnings before income
taxes |
|
545,118 |
|
|
178,476 |
|
|
1,207,726 |
|
|
773,378 |
| Income taxes |
|
129,876 |
|
|
37,260 |
|
|
289,092 |
|
|
166,594 |
| Net earnings |
$ |
415,242 |
|
$ |
141,216 |
|
$ |
918,634 |
|
$ |
606,784 |
| |
|
|
|
|
|
|
|
| Net earnings: |
|
|
|
|
|
|
|
| Basic earnings per share |
$ |
0.82 |
|
$ |
0.28 |
|
$ |
1.82 |
|
$ |
1.20 |
| Diluted earnings per
share |
|
0.82 |
|
|
0.28 |
|
|
1.81 |
|
|
1.19 |
| |
|
|
|
|
|
|
|
| Average shares
outstanding |
|
504,312,633 |
|
|
507,609,696 |
|
|
504,719,562 |
|
|
507,594,137 |
| Diluted shares
outstanding |
|
505,929,342 |
|
|
510,145,794 |
|
|
506,499,390 |
|
|
510,264,473 |
|
(1) |
Gains and losses related to the disposition of fixed assets have
been recognized within operating expenses. Prior year amounts have
been reclassified to conform to this presentation. |
| (2) |
Sysco’s second quarter of fiscal 2023 included a charge of $315.4
million in other expense related to pension settlement
charges. |
| |
|
| Sysco
Corporation and its Consolidated
SubsidiariesCONSOLIDATED BALANCE
SHEETS(In Thousands, Except for Share
Data) |
| |
Dec. 30, 2023 |
|
Jul. 1, 2023 |
| |
(Unaudited) |
|
|
| ASSETS |
|
|
|
| Current
assets |
|
|
|
|
Cash and cash equivalents |
$ |
962,165 |
|
|
$ |
745,201 |
|
| Accounts receivable, less
allowances of $79,179 and $45,599 |
|
5,291,552 |
|
|
|
5,091,970 |
|
| Inventories |
|
4,722,499 |
|
|
|
4,480,812 |
|
| Prepaid expenses and other
current assets |
|
327,569 |
|
|
|
284,566 |
|
| Income tax receivable |
|
5,815 |
|
|
|
5,815 |
|
| Total current assets |
|
11,309,600 |
|
|
|
10,608,364 |
|
| Plant and equipment at cost,
less accumulated depreciation |
|
5,157,150 |
|
|
|
4,915,049 |
|
| Other long-term
assets |
|
|
|
| Goodwill |
|
5,255,010 |
|
|
|
4,645,754 |
|
| Intangibles, less
amortization |
|
1,174,151 |
|
|
|
859,530 |
|
| Deferred income taxes |
|
444,180 |
|
|
|
420,450 |
|
| Operating lease right-of-use
assets, net |
|
824,390 |
|
|
|
731,766 |
|
| Other assets |
|
576,120 |
|
|
|
640,232 |
|
| Total other long-term
assets |
|
8,273,851 |
|
|
|
7,297,732 |
|
| Total assets |
$ |
24,740,601 |
|
|
$ |
22,821,145 |
|
| |
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
| Current
liabilities |
|
|
|
| Accounts payable |
$ |
5,737,726 |
|
|
$ |
6,025,757 |
|
| Accrued expenses |
|
2,266,062 |
|
|
|
2,251,181 |
|
| Accrued income taxes |
|
46,772 |
|
|
|
101,894 |
|
| Current operating lease
liabilities |
|
119,397 |
|
|
|
99,051 |
|
| Current maturities of
long-term debt |
|
84,513 |
|
|
|
62,550 |
|
| Total current liabilities |
|
8,254,470 |
|
|
|
8,540,433 |
|
| Long-term
liabilities |
|
|
|
| Long-term debt |
|
12,028,122 |
|
|
|
10,347,997 |
|
| Deferred income taxes |
|
303,878 |
|
|
|
302,904 |
|
| Long-term operating lease
liabilities |
|
737,354 |
|
|
|
656,269 |
|
| Other long-term
liabilities |
|
979,376 |
|
|
|
931,708 |
|
| Total long-term
liabilities |
|
14,048,730 |
|
|
|
12,238,878 |
|
| Commitments and
contingencies |
|
|
|
| Noncontrolling interest |
|
33,367 |
|
|
|
33,212 |
|
| Shareholders’
equity |
|
|
|
| Preferred stock, par value $1
per share Authorized 1,500,000 shares, issued none |
|
— |
|
|
|
— |
|
| Common stock, par value $1 per
share Authorized 2,000,000,000 shares, issued 765,174,900
shares |
|
765,175 |
|
|
|
765,175 |
|
| Paid-in capital |
|
1,877,201 |
|
|
|
1,814,681 |
|
| Retained earnings |
|
11,724,251 |
|
|
|
11,310,664 |
|
| Accumulated other
comprehensive loss |
|
(1,189,753 |
) |
|
|
(1,252,590 |
) |
| Treasury stock at cost,
261,472,819 and 260,062,834 shares |
|
(10,772,840 |
) |
|
|
(10,629,308 |
) |
| Total shareholders’
equity |
|
2,404,034 |
|
|
|
2,008,622 |
|
| Total liabilities and
shareholders’ equity |
$ |
24,740,601 |
|
|
$ |
22,821,145 |
|
| |
| Sysco
Corporation and its Consolidated
SubsidiariesCONSOLIDATED CASH FLOWS
(Unaudited)(In Thousands) |
|
|
26-Week Period Ended |
| |
Dec. 30, 2023 |
|
Dec. 31, 2022 |
| Cash flows from operating
activities: |
|
|
|
|
Net earnings |
$ |
918,634 |
|
|
$ |
606,784 |
|
|
Adjustments to reconcile net earnings to cash provided by operating
activities: |
|
|
|
|
Pension settlement charge |
|
— |
|
|
|
315,354 |
|
|
Share-based compensation expense |
|
52,821 |
|
|
|
52,679 |
|
|
Depreciation and amortization |
|
425,465 |
|
|
|
378,949 |
|
|
Operating lease asset amortization |
|
59,127 |
|
|
|
55,884 |
|
|
Amortization of debt issuance and other debt-related costs |
|
9,117 |
|
|
|
10,315 |
|
|
Deferred income taxes |
|
(28,689 |
) |
|
|
(123,187 |
) |
|
Provision for losses on receivables |
|
29,784 |
|
|
|
9,732 |
|
|
Other non-cash items |
|
(3,782 |
) |
|
|
11,525 |
|
|
Additional changes in certain assets and liabilities, net of effect
of businesses acquired: |
|
|
|
|
Increase in receivables |
|
(25,431 |
) |
|
|
(87,190 |
) |
|
Increase in inventories |
|
(98,047 |
) |
|
|
(222,650 |
) |
|
Decrease (increase) in prepaid expenses and other current
assets |
|
3,362 |
|
|
|
(8,915 |
) |
|
Decrease in accounts payable |
|
(404,411 |
) |
|
|
(390,124 |
) |
|
Increase (decrease) in accrued expenses |
|
17,033 |
|
|
|
(62,779 |
) |
|
Decrease in operating lease liabilities |
|
(64,112 |
) |
|
|
(57,234 |
) |
|
(Decrease) increase in accrued income taxes |
|
(55,123 |
) |
|
|
3,108 |
|
|
Decrease in other assets |
|
21,942 |
|
|
|
22,156 |
|
|
Decrease in other long-term liabilities |
|
(1,793 |
) |
|
|
(10,941 |
) |
|
Net cash provided by operating activities |
|
855,897 |
|
|
|
503,466 |
|
| Cash flows from investing
activities: |
|
|
|
|
Additions to plant and equipment |
|
(346,797 |
) |
|
|
(309,664 |
) |
|
Proceeds from sales of plant and equipment |
|
18,347 |
|
|
|
25,493 |
|
|
Acquisition of businesses, net of cash acquired |
|
(1,174,608 |
) |
|
|
(37,699 |
) |
|
Purchase of marketable securities |
|
(1,878 |
) |
|
|
(14,019 |
) |
|
Proceeds from sales of marketable securities |
|
— |
|
|
|
11,641 |
|
|
Other investing activities(1) |
|
— |
|
|
|
4,840 |
|
|
Net cash used for investing activities |
|
(1,504,936 |
) |
|
|
(319,408 |
) |
| Cash flows from financing
activities: |
|
|
|
|
Bank and commercial paper borrowings, net |
|
500,000 |
|
|
|
155,000 |
|
|
Other debt borrowings including senior notes |
|
1,132,475 |
|
|
|
140,024 |
|
|
Other debt repayments including senior notes |
|
(187,720 |
) |
|
|
(57,270 |
) |
|
Debt issuance costs |
|
(13,035 |
) |
|
|
— |
|
|
Proceeds from stock option exercises |
|
57,347 |
|
|
|
47,339 |
|
|
Stock repurchases |
|
(199,947 |
) |
|
|
(267,727 |
) |
|
Dividends paid |
|
(505,588 |
) |
|
|
(498,323 |
) |
|
Other financing activities(2) |
|
(5,775 |
) |
|
|
(46,517 |
) |
|
Net cash provided by (used for) financing activities |
|
777,757 |
|
|
|
(527,474 |
) |
|
Effect of exchange rates on cash, cash equivalents and restricted
cash |
|
905 |
|
|
|
(2,314 |
) |
|
Net increase (decrease) in cash, cash equivalents and restricted
cash |
|
129,623 |
|
|
|
(345,730 |
) |
| Cash, cash equivalents and
restricted cash at beginning of period |
|
966,033 |
|
|
|
931,376 |
|
| Cash, cash equivalents and
restricted cash at end of period |
$ |
1,095,656 |
|
|
$ |
585,646 |
|
| |
|
|
|
| Supplemental disclosures of
cash flow information: |
|
|
|
| Cash paid during the period
for: |
|
|
|
|
Interest |
$ |
266,002 |
|
|
$ |
244,530 |
|
|
Income taxes, net of refunds |
|
371,855 |
|
|
|
289,413 |
|
|
(1) |
Change primarily includes proceeds from the settlement of
corporate-owned life insurance policies. |
| (2) |
Change includes cash paid for shares withheld to cover taxes,
settlement of interest rate hedges and other financing
activities. |
| |
|
Sysco Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Impact of Certain Items
The discussion of our results includes certain
non-GAAP financial measures, including EBITDA and adjusted EBITDA,
that we believe provide important perspective with respect to
underlying business trends. Other than EBITDA and free cash flow,
any non-GAAP financial measures will be denoted as adjusted
measures to remove (1) restructuring charges; (2) expenses
associated with our various transformation initiatives; (3)
severance charges; and (4) acquisition-related costs consisting of:
(a) intangible amortization expense and (b) acquisition costs and
due diligence costs related to our acquisitions. Our results for
fiscal 2023 were also impacted by adjustments to a product return
allowance pertaining to COVID-related personal protection equipment
inventory, a pension settlement charge that resulted from the
purchase of a nonparticipating single premium group annuity
contract that transferred defined benefit plan obligations to an
insurer and the reduction of bad debt expense previously recognized
in fiscal 2020 due to the impact of the COVID-19 pandemic on the
collectability of our pre-pandemic trade receivable balances.
The results of our operations can be impacted
due to changes in exchange rates applicable in converting local
currencies to U.S. dollars. We measure our results on a constant
currency basis. Constant currency operating results are calculated
by translating current-period local currency operating results with
the currency exchange rates used to translate the financial
statements in the comparable prior-year period to determine what
the current-period U.S. dollar operating results would have been if
the currency exchange rate had not changed from the comparable
prior-year period.
Management believes that adjusting its operating
expenses, operating income, net earnings and diluted earnings per
share to remove these Certain Items and presenting its results on a
constant currency basis provides an important perspective with
respect to our underlying business trends and results. It provides
meaningful supplemental information to both management and
investors that (1) is indicative of the performance of the
company’s underlying operations and (2) facilitates comparisons on
a year-over-year basis.
Sysco has a history of growth through
acquisitions and excludes from its non-GAAP financial measures the
impact of acquisition-related intangible amortization, acquisition
costs and due-diligence costs for those acquisitions. We believe
this approach significantly enhances the comparability of Sysco’s
results for fiscal year 2024 and fiscal year 2023.
Set forth on the following page is a
reconciliation of sales, operating expenses, operating income,
other (income) expense, net earnings and diluted earnings per share
to adjusted results for these measures for the periods presented.
Individual components of diluted earnings per share may not be
equal to the total presented when added due to rounding. Adjusted
diluted earnings per share is calculated using adjusted net
earnings divided by diluted shares outstanding.
| |
| Sysco
Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Impact of Certain
Items(Dollars in Thousands, Except for Share and
Per Share Data) |
| |
13-Week Period Ended Dec. 30, 2023 |
|
13-Week Period Ended Dec. 31, 2022 |
|
Change in Dollars |
|
%/bps Change |
|
Sales (GAAP) |
$ |
19,287,942 |
|
|
$ |
18,593,953 |
|
|
$ |
693,989 |
|
|
3.7 |
% |
| Impact of currency
fluctuations(1) |
|
(104,758 |
) |
|
|
— |
|
|
|
(104,758 |
) |
|
(0.5 |
) |
| Comparable sales using
a constant currency basis (Non-GAAP) |
$ |
19,183,184 |
|
|
$ |
18,593,953 |
|
|
$ |
589,231 |
|
|
3.2 |
% |
| |
|
|
|
|
|
|
|
| Cost of sales
(GAAP) |
$ |
15,774,309 |
|
|
$ |
15,244,337 |
|
|
$ |
529,972 |
|
|
3.5 |
% |
| |
|
|
|
|
|
|
|
| Gross profit
(GAAP) |
$ |
3,513,633 |
|
|
$ |
3,349,616 |
|
|
$ |
164,017 |
|
|
4.9 |
% |
| Impact of currency
fluctuations(1) |
|
(24,183 |
) |
|
|
— |
|
|
|
(24,183 |
) |
|
(0.7 |
) |
| Comparable gross
profit adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
$ |
3,489,450 |
|
|
$ |
3,349,616 |
|
|
$ |
139,834 |
|
|
4.2 |
% |
| |
|
|
|
|
|
|
|
| Gross margin
(GAAP) |
|
18.22 |
% |
|
|
18.01 |
% |
|
|
|
21 bps |
| Impact of currency
fluctuations(1) |
|
(0.03 |
) |
|
|
— |
|
|
|
|
-3 bps |
| Comparable gross
margin adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
18.19 |
% |
|
|
18.01 |
% |
|
|
|
18 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
2,813,590 |
|
|
$ |
2,708,793 |
|
|
$ |
104,797 |
|
|
3.9 |
% |
| Impact of restructuring and
transformational project costs(2) |
|
(13,500 |
) |
|
|
(14,388 |
) |
|
|
888 |
|
|
6.2 |
|
| Impact of acquisition-related
costs(3) |
|
(31,341 |
) |
|
|
(28,960 |
) |
|
|
(2,381 |
) |
|
(8.2 |
) |
| Impact of bad debt reserve
adjustments(4) |
|
— |
|
|
|
1,923 |
|
|
|
(1,923 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
2,768,749 |
|
|
|
2,667,368 |
|
|
|
101,381 |
|
|
3.8 |
|
| Impact of currency
fluctuations(1) |
|
(23,102 |
) |
|
|
— |
|
|
|
(23,102 |
) |
|
(0.9 |
) |
| Comparable operating
expenses adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
$ |
2,745,647 |
|
|
$ |
2,667,368 |
|
|
$ |
78,279 |
|
|
2.9 |
% |
| |
|
|
|
|
|
|
|
| Operating expense as a
percentage of sales (GAAP) |
|
14.59 |
% |
|
|
14.57 |
% |
|
|
|
2 bps |
| Impact of certain item
adjustments |
|
(0.24 |
) |
|
|
(0.22 |
) |
|
|
|
-2 bps |
| Adjusted operating
expense as a percentage of sales (Non-GAAP) |
|
14.35 |
% |
|
|
14.35 |
% |
|
|
|
0 bps |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
700,043 |
|
|
$ |
640,823 |
|
|
$ |
59,220 |
|
|
9.2 |
% |
| Impact of restructuring and
transformational project costs(2) |
|
13,500 |
|
|
|
14,388 |
|
|
|
(888 |
) |
|
(6.2 |
) |
| Impact of acquisition-related
costs(3) |
|
31,341 |
|
|
|
28,960 |
|
|
|
2,381 |
|
|
8.2 |
|
| Impact of bad debt reserve
adjustments(4) |
|
— |
|
|
|
(1,923 |
) |
|
|
1,923 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
744,884 |
|
|
|
682,248 |
|
|
|
62,636 |
|
|
9.2 |
|
| Impact of currency
fluctuations(1) |
|
(1,081 |
) |
|
|
— |
|
|
|
(1,081 |
) |
|
(0.2 |
) |
| Comparable operating
income adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
$ |
743,803 |
|
|
$ |
682,248 |
|
|
$ |
61,555 |
|
|
9.0 |
% |
| |
|
|
|
|
|
|
|
| Operating margin
(GAAP) |
|
3.63 |
% |
|
|
3.45 |
% |
|
|
|
18 bps |
| Operating margin
adjusted for Certain Items (Non-GAAP) |
|
3.86 |
% |
|
|
3.67 |
% |
|
|
|
19 bps |
| Operating margin
adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
3.88 |
% |
|
|
3.67 |
% |
|
|
|
21 bps |
| |
|
|
|
|
|
|
|
| Other expense
(GAAP) |
$ |
5,245 |
|
|
$ |
330,305 |
|
|
$ |
(325,060 |
) |
|
(98.4)% |
| Impact of other non-routine
gains and losses(5) |
|
— |
|
|
|
(314,878 |
) |
|
|
314,878 |
|
|
NM |
| Other expense adjusted
for Certain Items (Non-GAAP) |
$ |
5,245 |
|
|
$ |
15,427 |
|
|
$ |
(10,182 |
) |
|
(66.0)% |
| |
|
|
|
|
|
|
|
| Net earnings
(GAAP) |
$ |
415,242 |
|
|
$ |
141,216 |
|
|
$ |
274,026 |
|
|
NM |
| Impact of restructuring and
transformational project costs(2) |
|
13,500 |
|
|
|
14,388 |
|
|
|
(888 |
) |
|
(6.2 |
) |
| Impact of acquisition-related
costs(3) |
|
31,341 |
|
|
|
28,960 |
|
|
|
2,381 |
|
|
8.2 |
|
| Impact of bad debt reserve
adjustments(4) |
|
— |
|
|
|
(1,923 |
) |
|
|
1,923 |
|
|
NM |
| Impact of other non-routine
gains and losses(5) |
|
— |
|
|
|
314,878 |
|
|
|
(314,878 |
) |
|
NM |
| Tax impact of restructuring
and transformational project costs(6) |
|
(3,335 |
) |
|
|
(3,618 |
) |
|
|
283 |
|
|
7.8 |
|
| Tax impact of
acquisition-related costs(6) |
|
(7,744 |
) |
|
|
(7,283 |
) |
|
|
(461 |
) |
|
(6.3 |
) |
| Tax impact of bad debt
reserves adjustments(6) |
|
— |
|
|
|
484 |
|
|
|
(484 |
) |
|
NM |
| Tax impact of other
non-routine gains and losses(6) |
|
— |
|
|
|
(79,185 |
) |
|
|
79,185 |
|
|
NM |
| Net earnings adjusted
for Certain Items (Non-GAAP) |
$ |
449,004 |
|
|
$ |
407,917 |
|
|
$ |
41,087 |
|
|
10.1 |
% |
| |
|
|
|
|
|
|
|
| Diluted earnings per
share (GAAP) |
$ |
0.82 |
|
|
$ |
0.28 |
|
|
$ |
0.54 |
|
|
NM |
| Impact of restructuring and
transformational project costs(2) |
|
0.03 |
|
|
|
0.03 |
|
|
|
— |
|
|
— |
|
| Impact of acquisition-related
costs(3) |
|
0.06 |
|
|
|
0.06 |
|
|
|
— |
|
|
— |
|
| Impact of other non-routine
gains and losses(5) |
|
— |
|
|
|
0.62 |
|
|
|
(0.62 |
) |
|
NM |
| Tax impact of restructuring
and transformational project costs(6) |
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
— |
|
|
— |
|
| Tax impact of
acquisition-related costs(6) |
|
(0.02 |
) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
(100.0 |
) |
| Tax impact of other
non-routine gains and losses(6) |
|
— |
|
|
|
(0.16 |
) |
|
|
0.16 |
|
|
NM |
| Diluted earnings per
share adjusted for Certain Items
(Non-GAAP)(7) |
$ |
0.89 |
|
|
$ |
0.80 |
|
|
$ |
0.09 |
|
|
11.3 |
% |
| |
|
|
|
|
|
|
|
| Diluted shares
outstanding |
|
505,929,342 |
|
|
|
510,145,794 |
|
|
|
|
|
| (1) |
Represents a constant currency adjustment, which eliminates the
impact of foreign currency fluctuations on the current year
results. |
| (2) |
Fiscal 2024 includes $2 million related to restructuring and
severance charges and $11 million related to various transformation
initiative costs, primarily consisting of changes to our business
technology strategy. Fiscal 2023 includes $5 million related to
restructuring and severance charges and $9 million related to
various transformation initiative costs, primarily consisting of
changes to our business technology strategy. |
| (3) |
Fiscal 2024 includes $29 million of intangible amortization expense
and $2 million in acquisition and due diligence costs. Fiscal 2023
includes $26 million of intangible amortization expense and $3
million in acquisition and due diligence costs. |
| (4) |
Fiscal 2023 represents the reduction of bad debt charges previously
taken on pre-pandemic trade receivable balances in fiscal
2020. |
| (5) |
Fiscal 2023 primarily represents a pension settlement charge of
$315 million that resulted from the purchase of a nonparticipating
single premium group annuity contract that transferred defined
benefit plan obligations to an insurer. |
| (6) |
The tax impact of adjustments for Certain Items are calculated by
multiplying the pretax impact of each Certain Item by the statutory
rates in effect for each jurisdiction where the Certain Item was
incurred. |
| (7) |
Individual components of diluted earnings per share may not equal
the total presented when added due to rounding. Total diluted
earnings per share is calculated using adjusted net earnings
divided by diluted shares outstanding. |
| NM |
Represents that the percentage change is not meaningful. |
| |
|
| Sysco
Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Impact of Certain
Items(Dollars in Thousands, Except for Share and
Per Share Data) |
| |
26-Week Period Ended Dec. 30, 2023 |
|
26-Week PeriodEnded Dec. 31, 2022 |
|
Change in Dollars |
|
%/bps Change |
|
Sales (GAAP) |
$ |
38,908,396 |
|
|
$ |
37,720,783 |
|
|
$ |
1,187,613 |
|
|
3.1 |
% |
| Impact of currency
fluctuations(1) |
|
(208,824 |
) |
|
|
— |
|
|
|
(208,824 |
) |
|
(0.5 |
) |
| Comparable sales using
a constant currency basis (Non-GAAP) |
$ |
38,699,572 |
|
|
$ |
37,720,783 |
|
|
$ |
978,789 |
|
|
2.6 |
% |
| |
|
|
|
|
|
|
|
| Cost of sales
(GAAP) |
$ |
31,746,991 |
|
|
$ |
30,882,312 |
|
|
$ |
864,679 |
|
|
2.8 |
% |
| Impact of inventory valuation
adjustment(2) |
|
— |
|
|
|
2,571 |
|
|
|
(2,571 |
) |
|
— |
|
| Cost of sales adjusted
for Certain Items (Non-GAAP) |
$ |
31,746,991 |
|
|
$ |
30,884,883 |
|
|
$ |
862,108 |
|
|
2.8 |
% |
| |
|
|
|
|
|
|
|
| Gross profit
(GAAP) |
$ |
7,161,405 |
|
|
$ |
6,838,471 |
|
|
$ |
322,934 |
|
|
4.7 |
% |
| Impact of inventory valuation
adjustment(2) |
|
— |
|
|
|
(2,571 |
) |
|
|
2,571 |
|
|
0.1 |
|
| Gross profit adjusted
for Certain Items (Non-GAAP) |
|
7,161,405 |
|
|
|
6,835,900 |
|
|
|
325,505 |
|
|
4.8 |
|
| Impact of currency
fluctuations(1) |
|
(50,367 |
) |
|
|
— |
|
|
|
(50,367 |
) |
|
(0.8 |
) |
| Comparable gross
profit adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
$ |
7,111,038 |
|
|
$ |
6,835,900 |
|
|
$ |
275,138 |
|
|
4.0 |
% |
| |
|
|
|
|
|
|
|
| Gross margin
(GAAP) |
|
18.41 |
% |
|
|
18.13 |
% |
|
|
|
28 bps |
| Impact of inventory valuation
adjustment(2) |
|
— |
|
|
|
(0.01 |
) |
|
|
|
1 bps |
| Gross margin adjusted
for Certain Items (Non-GAAP) |
|
18.41 |
|
|
|
18.12 |
|
|
|
|
29 bps |
| Impact of currency
fluctuations(1) |
|
(0.04 |
) |
|
|
— |
|
|
|
|
-4 bps |
| Comparable gross
margin adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
18.37 |
% |
|
|
18.12 |
% |
|
|
|
25 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
5,657,780 |
|
|
$ |
5,460,847 |
|
|
$ |
196,933 |
|
|
3.6 |
% |
| Impact of restructuring and
transformational project costs(3) |
|
(33,175 |
) |
|
|
(26,034 |
) |
|
|
(7,141 |
) |
|
(27.4 |
) |
| Impact of acquisition-related
costs(4) |
|
(62,379 |
) |
|
|
(58,415 |
) |
|
|
(3,964 |
) |
|
(6.8 |
) |
| Impact of bad debt reserve
adjustments(5) |
|
— |
|
|
|
4,515 |
|
|
|
(4,515 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
5,562,226 |
|
|
|
5,380,913 |
|
|
|
181,313 |
|
|
3.4 |
|
| Impact of currency
fluctuations(1) |
|
(48,940 |
) |
|
|
— |
|
|
|
(48,940 |
) |
|
(0.9 |
) |
| Comparable operating
expenses adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
$ |
5,513,286 |
|
|
$ |
5,380,913 |
|
|
$ |
132,373 |
|
|
2.5 |
% |
| |
|
|
|
|
|
|
|
| Operating expense as a
percentage of sales (GAAP) |
|
14.54 |
% |
|
|
14.48 |
% |
|
|
|
6 bps |
| Impact of certain item
adjustments |
|
(0.24 |
) |
|
|
(0.21 |
) |
|
|
|
-3 bps |
| Adjusted operating
expense as a percentage of sales (Non-GAAP) |
|
14.30 |
% |
|
|
14.27 |
% |
|
|
|
3 bps |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
1,503,625 |
|
|
$ |
1,377,624 |
|
|
$ |
126,001 |
|
|
9.1 |
% |
| Impact of inventory valuation
adjustment(2) |
|
— |
|
|
|
(2,571 |
) |
|
|
2,571 |
|
|
NM |
| Impact of restructuring and
transformational project costs(3) |
|
33,175 |
|
|
|
26,034 |
|
|
|
7,141 |
|
|
27.4 |
|
| Impact of acquisition-related
costs(4) |
|
62,379 |
|
|
|
58,415 |
|
|
|
3,964 |
|
|
6.8 |
|
| Impact of bad debt reserve
adjustments(5) |
|
— |
|
|
|
(4,515 |
) |
|
|
4,515 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
1,599,179 |
|
|
|
1,454,987 |
|
|
|
144,192 |
|
|
9.9 |
|
| Impact of currency
fluctuations(1) |
|
(1,427 |
) |
|
|
— |
|
|
|
(1,427 |
) |
|
(0.1 |
) |
| Comparable operating
income adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
$ |
1,597,752 |
|
|
$ |
1,454,987 |
|
|
$ |
142,765 |
|
|
9.8 |
% |
| |
|
|
|
|
|
|
|
| Operating margin
(GAAP) |
|
3.86 |
% |
|
|
3.65 |
% |
|
|
|
21 bps |
| Operating margin
adjusted for Certain Items (Non-GAAP) |
|
4.11 |
% |
|
|
3.86 |
% |
|
|
|
25 bps |
| Operating margin
adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
|
4.13 |
% |
|
|
3.86 |
% |
|
|
|
27 bps |
| |
|
|
|
|
|
|
|
| Other expense
(GAAP) |
$ |
11,885 |
|
|
$ |
348,054 |
|
|
$ |
(336,169 |
) |
|
(96.6)% |
| Impact of other non-routine
gains and losses(6) |
|
— |
|
|
|
(314,878 |
) |
|
|
314,878 |
|
|
NM |
| Other expense adjusted
for Certain Items (Non-GAAP) |
$ |
11,885 |
|
|
$ |
33,176 |
|
|
$ |
(21,291 |
) |
|
(64.2 |
) |
| |
|
|
|
|
|
|
|
| Net earnings
(GAAP) |
$ |
918,634 |
|
|
$ |
606,784 |
|
|
$ |
311,850 |
|
|
51.4 |
% |
| Impact of inventory valuation
adjustment(2) |
|
— |
|
|
|
(2,571 |
) |
|
|
2,571 |
|
|
NM |
| Impact of restructuring and
transformational project costs(3) |
|
33,175 |
|
|
|
26,034 |
|
|
|
7,141 |
|
|
27.4 |
|
| Impact of acquisition-related
costs(4) |
|
62,379 |
|
|
|
58,415 |
|
|
|
3,964 |
|
|
6.8 |
|
| Impact of bad debt reserve
adjustments(5) |
|
— |
|
|
|
(4,515 |
) |
|
|
4,515 |
|
|
NM |
| Impact of other non-routine
gains and losses(6) |
|
— |
|
|
|
314,878 |
|
|
|
(314,878 |
) |
|
NM |
| Tax impact of inventory
valuation adjustment(7) |
|
— |
|
|
|
646 |
|
|
|
(646 |
) |
|
NM |
| Tax impact of restructuring
and transformational project costs(7) |
|
(8,184 |
) |
|
|
(6,538 |
) |
|
|
(1,646 |
) |
|
(25.2 |
) |
| Tax impact of
acquisition-related costs(7) |
|
(15,388 |
) |
|
|
(14,670 |
) |
|
|
(718 |
) |
|
(4.9 |
) |
| Tax impact of bad debt
reserves adjustments(7) |
|
— |
|
|
|
1,134 |
|
|
|
(1,134 |
) |
|
NM |
| Tax impact of other
non-routine gains and losses(7) |
|
— |
|
|
|
(79,075 |
) |
|
|
79,075 |
|
|
NM |
| Net earnings adjusted
for Certain Items (Non-GAAP) |
$ |
990,616 |
|
|
$ |
900,522 |
|
|
$ |
90,094 |
|
|
10.0 |
% |
| |
|
|
|
|
|
|
|
| Diluted earnings per
share (GAAP) |
$ |
1.81 |
|
|
$ |
1.19 |
|
|
$ |
0.62 |
|
|
52.1 |
% |
| Impact of inventory valuation
adjustment(2) |
|
— |
|
|
|
(0.01 |
) |
|
|
0.01 |
|
|
NM |
| Impact of restructuring and
transformational project costs(3) |
|
0.07 |
|
|
|
0.05 |
|
|
|
0.02 |
|
|
40.0 |
|
| Impact of acquisition-related
costs(4) |
|
0.12 |
|
|
|
0.11 |
|
|
|
0.01 |
|
|
9.1 |
|
| Impact of bad debt reserve
adjustments(5) |
|
— |
|
|
|
(0.01 |
) |
|
|
0.01 |
|
|
NM |
| Impact of other non-routine
gains and losses(6) |
|
— |
|
|
|
0.62 |
|
|
|
(0.62 |
) |
|
NM |
| Tax impact of restructuring
and transformational project costs(7) |
|
(0.02 |
) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
(100.0 |
) |
| Tax impact of
acquisition-related costs(7) |
|
(0.03 |
) |
|
|
(0.03 |
) |
|
|
— |
|
|
— |
|
| Tax impact of other
non-routine gains and losses(7) |
|
— |
|
|
|
(0.15 |
) |
|
|
0.15 |
|
|
NM |
| Diluted earnings per
share adjusted for Certain Items
(Non-GAAP)(8) |
$ |
1.96 |
|
|
$ |
1.76 |
|
|
$ |
0.20 |
|
|
11.4 |
% |
| |
|
|
|
|
|
|
|
| Diluted shares
outstanding |
|
506,499,390 |
|
|
|
510,264,473 |
|
|
|
|
|
| (1) |
Represents a constant currency adjustment which eliminates the
impact of foreign currency fluctuations on the current year
results. |
| (2) |
Fiscal 2023 represents an adjustment to a product return allowance
related to COVID-related personal protection equipment
inventory. |
| (3) |
Fiscal 2024 includes $8 million related to restructuring and
severance charges and $25 million related to various transformation
initiative costs, primarily consisting of changes to our business
technology strategy. Fiscal 2023 includes $10 million related to
restructuring and severance charges and $16 million related to
various transformation initiative costs, primarily consisting of
changes to our business technology strategy. |
| (4) |
Fiscal 2024 includes $57 million of intangible amortization expense
and $5 million in acquisition and due diligence costs. Fiscal 2023
includes $52 million of intangible amortization expense and $6
million in acquisition and due diligence costs. |
| (5) |
Fiscal 2023 represents the reduction of bad debt charges previously
taken on pre-pandemic trade receivable balances in fiscal
2020. |
| (6) |
Fiscal 2023 primarily includes a pension settlement charge of $315
million that resulted from the purchase of a nonparticipating
single premium group annuity contract that transferred defined
benefit plan obligations to an insurer. |
| (7) |
The tax impact of adjustments for Certain Items is calculated by
multiplying the pretax impact of each Certain Item by the statutory
rates in effect for each jurisdiction where the Certain Item was
incurred. |
| (8) |
Individual components of diluted earnings per share may not add up
to the total presented due to rounding. Total diluted earnings per
share is calculated using adjusted net earnings divided by diluted
shares outstanding. |
| NM |
Represents that the percentage change is not meaningful. |
| |
|
| Sysco
Corporation and its Consolidated
SubsidiariesSegment
ResultsNon-GAAP Reconciliation
(Unaudited)Impact of Certain Items on Applicable
Segments(Dollars in Thousands) |
| |
13-Week Period Ended Dec. 30, 2023 |
|
13-Week Period Ended Dec. 31, 2022 |
|
Change in Dollars |
|
%/bps Change |
| U.S. FOODSERVICE
OPERATIONS |
|
|
|
|
|
|
|
|
Sales (GAAP) |
$ |
13,494,443 |
|
|
$ |
13,077,054 |
|
|
$ |
417,389 |
|
|
3.2 |
% |
| Gross profit (GAAP) |
|
2,577,694 |
|
|
|
2,493,089 |
|
|
|
84,605 |
|
|
3.4 |
% |
| Gross margin (GAAP) |
|
19.10 |
% |
|
|
19.06 |
% |
|
|
|
4 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
1,738,658 |
|
|
$ |
1,712,121 |
|
|
$ |
26,537 |
|
|
1.5 |
% |
| Impact of restructuring and
transformational project costs |
|
(65 |
) |
|
|
(92 |
) |
|
|
27 |
|
|
29.3 |
|
| Impact of acquisition-related
costs(1) |
|
(12,025 |
) |
|
|
(11,514 |
) |
|
|
(511 |
) |
|
(4.4 |
) |
| Impact of bad debt reserve
adjustments(2) |
|
— |
|
|
|
1,658 |
|
|
|
(1,658 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
1,726,568 |
|
|
$ |
1,702,173 |
|
|
$ |
24,395 |
|
|
1.4 |
% |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
839,036 |
|
|
$ |
780,968 |
|
|
$ |
58,068 |
|
|
7.4 |
% |
| Impact of restructuring and
transformational project costs |
|
65 |
|
|
|
92 |
|
|
|
(27 |
) |
|
(29.3 |
) |
| Impact of acquisition-related
costs(1) |
|
12,025 |
|
|
|
11,514 |
|
|
|
511 |
|
|
4.4 |
|
| Impact of bad debt reserve
adjustments(2) |
|
— |
|
|
|
(1,658 |
) |
|
|
1,658 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
$ |
851,126 |
|
|
$ |
790,916 |
|
|
$ |
60,210 |
|
|
7.6 |
% |
| |
|
|
|
|
|
|
|
| INTERNATIONAL
FOODSERVICE OPERATIONS |
|
|
|
|
|
|
|
| Sales
(GAAP) |
$ |
3,596,458 |
|
|
$ |
3,282,411 |
|
|
$ |
314,047 |
|
|
9.6 |
% |
| Impact of currency
fluctuations(3) |
|
(104,598 |
) |
|
|
— |
|
|
|
(104,598 |
) |
|
(3.2 |
) |
| Comparable sales using
a constant currency basis (Non-GAAP) |
$ |
3,491,860 |
|
|
$ |
3,282,411 |
|
|
$ |
209,449 |
|
|
6.4 |
% |
| |
|
|
|
|
|
|
|
| Gross profit
(GAAP) |
$ |
708,100 |
|
|
$ |
624,460 |
|
|
$ |
83,640 |
|
|
13.4 |
% |
| Impact of currency
fluctuations(3) |
|
(24,126 |
) |
|
|
— |
|
|
|
(24,126 |
) |
|
(3.9 |
) |
| Comparable gross
profit using a constant currency basis (Non-GAAP) |
$ |
683,974 |
|
|
$ |
624,460 |
|
|
$ |
59,514 |
|
|
9.5 |
% |
| |
|
|
|
|
|
|
|
| Gross margin
(GAAP) |
|
19.69 |
% |
|
|
19.02 |
% |
|
|
|
67 bps |
| Impact of currency
fluctuations(3) |
|
(0.10 |
) |
|
|
— |
|
|
|
|
-10 bps |
| Comparable gross
margin using a constant currency basis (Non-GAAP) |
|
19.59 |
% |
|
|
19.02 |
% |
|
|
|
57 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
625,170 |
|
|
$ |
567,047 |
|
|
$ |
58,123 |
|
|
10.3 |
% |
| Impact of restructuring and
transformational project costs(4) |
|
(2,603 |
) |
|
|
(5,588 |
) |
|
|
2,985 |
|
|
53.4 |
|
| Impact of acquisition-related
costs(5) |
|
(16,847 |
) |
|
|
(15,935 |
) |
|
|
(912 |
) |
|
(5.7 |
) |
| Impact of bad debt reserve
adjustments(2) |
|
— |
|
|
|
265 |
|
|
|
(265 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
605,720 |
|
|
|
545,789 |
|
|
|
59,931 |
|
|
11.0 |
|
| Impact of currency
fluctuations(3) |
|
(22,327 |
) |
|
|
— |
|
|
|
(22,327 |
) |
|
(4.1 |
) |
| Comparable operating
expenses adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
$ |
583,393 |
|
|
$ |
545,789 |
|
|
$ |
37,604 |
|
|
6.9 |
% |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
82,930 |
|
|
$ |
57,413 |
|
|
$ |
25,517 |
|
|
44.4 |
% |
| Impact of restructuring and
transformational project costs(4) |
|
2,603 |
|
|
|
5,588 |
|
|
|
(2,985 |
) |
|
(53.4 |
) |
| Impact of acquisition-related
costs(5) |
|
16,847 |
|
|
|
15,935 |
|
|
|
912 |
|
|
5.7 |
|
| Impact of bad debt reserve
adjustments(2) |
|
— |
|
|
|
(265 |
) |
|
|
265 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
102,380 |
|
|
|
78,671 |
|
|
|
23,709 |
|
|
30.1 |
|
| Impact of currency
fluctuations(3) |
|
(1,800 |
) |
|
|
— |
|
|
|
(1,800 |
) |
|
(2.3 |
) |
| Comparable operating
income adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
$ |
100,580 |
|
|
$ |
78,671 |
|
|
$ |
21,909 |
|
|
27.8 |
% |
| |
|
|
|
|
|
|
|
| SYGMA |
|
|
|
|
|
|
|
| Sales (GAAP) |
$ |
1,913,715 |
|
|
$ |
1,933,536 |
|
|
$ |
(19,821 |
) |
|
(1.0)% |
| Gross profit (GAAP) |
|
148,507 |
|
|
|
150,461 |
|
|
|
(1,954 |
) |
|
(1.3)% |
| Gross margin (GAAP) |
|
7.76 |
% |
|
|
7.78 |
% |
|
|
|
-2 bps |
| |
|
|
|
|
|
|
|
| Operating expenses (GAAP) |
$ |
132,161 |
|
|
$ |
143,614 |
|
|
$ |
(11,453 |
) |
|
(8.0)% |
| Operating income (GAAP) |
|
16,346 |
|
|
|
6,847 |
|
|
|
9,499 |
|
|
NM |
| |
|
|
|
|
|
|
|
| OTHER |
|
|
|
|
|
|
|
| Sales (GAAP) |
$ |
283,326 |
|
|
$ |
300,952 |
|
|
$ |
(17,626 |
) |
|
(5.9)% |
| Gross profit (GAAP) |
|
73,007 |
|
|
|
77,311 |
|
|
|
(4,304 |
) |
|
(5.6)% |
| Gross margin (GAAP) |
|
25.77 |
% |
|
|
25.69 |
% |
|
|
|
8 bps |
| |
|
|
|
|
|
|
|
| Operating expenses (GAAP) |
$ |
64,620 |
|
|
$ |
67,441 |
|
|
$ |
(2,821 |
) |
|
(4.2)% |
| Operating income (GAAP) |
|
8,387 |
|
|
|
9,870 |
|
|
|
(1,483 |
) |
|
(15.0)% |
| |
|
|
|
|
|
|
|
| GLOBAL SUPPORT
CENTER |
|
|
|
|
|
|
|
| Gross profit (GAAP) |
$ |
6,325 |
|
|
$ |
4,295 |
|
|
$ |
2,030 |
|
|
47.3 |
% |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
252,981 |
|
|
$ |
218,570 |
|
|
$ |
34,411 |
|
|
15.7 |
% |
| Impact of restructuring and
transformational project costs(6) |
|
(10,832 |
) |
|
|
(8,708 |
) |
|
|
(2,124 |
) |
|
(24.4 |
) |
| Impact of acquisition-related
costs(7) |
|
(2,469 |
) |
|
|
(1,511 |
) |
|
|
(958 |
) |
|
(63.4 |
) |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
239,680 |
|
|
$ |
208,351 |
|
|
$ |
31,329 |
|
|
15.0 |
% |
| |
|
|
|
|
|
|
|
| Operating loss
(GAAP) |
$ |
(246,656 |
) |
|
$ |
(214,275 |
) |
|
$ |
(32,381 |
) |
|
(15.1)% |
| Impact of restructuring and
transformational project costs(6) |
|
10,832 |
|
|
|
8,708 |
|
|
|
2,124 |
|
|
24.4 |
|
| Impact of acquisition-related
costs(7) |
|
2,469 |
|
|
|
1,511 |
|
|
|
958 |
|
|
63.4 |
|
| Operating loss
adjusted for Certain Items (Non-GAAP) |
$ |
(233,355 |
) |
|
$ |
(204,056 |
) |
|
$ |
(29,299 |
) |
|
(14.4)% |
| |
|
|
|
|
|
|
|
| TOTAL
SYSCO |
|
|
|
|
|
|
|
| Sales (GAAP) |
$ |
19,287,942 |
|
|
$ |
18,593,953 |
|
|
$ |
693,989 |
|
|
3.7 |
% |
| Gross profit (GAAP) |
|
3,513,633 |
|
|
|
3,349,616 |
|
|
|
164,017 |
|
|
4.9 |
% |
| Gross margin (GAAP) |
|
18.22 |
% |
|
|
18.01 |
% |
|
|
|
21 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
2,813,590 |
|
|
$ |
2,708,793 |
|
|
$ |
104,797 |
|
|
3.9 |
% |
| Impact of restructuring and
transformational project costs(4) (6) |
|
(13,500 |
) |
|
|
(14,388 |
) |
|
|
888 |
|
|
6.2 |
|
| Impact of acquisition-related
costs(1) (5) (7) |
|
(31,341 |
) |
|
|
(28,960 |
) |
|
|
(2,381 |
) |
|
(8.2 |
) |
| Impact of bad debt reserve
adjustments(2) |
|
— |
|
|
|
1,923 |
|
|
|
(1,923 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
2,768,749 |
|
|
$ |
2,667,368 |
|
|
$ |
101,381 |
|
|
3.8 |
% |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
700,043 |
|
|
$ |
640,823 |
|
|
$ |
59,220 |
|
|
9.2 |
% |
| Impact of restructuring and
transformational project costs(4) (6) |
|
13,500 |
|
|
|
14,388 |
|
|
|
(888 |
) |
|
(6.2 |
) |
| Impact of acquisition-related
costs(1) (5) (7) |
|
31,341 |
|
|
|
28,960 |
|
|
|
2,381 |
|
|
8.2 |
|
| Impact of bad debt reserve
adjustments(2) |
|
— |
|
|
|
(1,923 |
) |
|
|
1,923 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
$ |
744,884 |
|
|
$ |
682,248 |
|
|
$ |
62,636 |
|
|
9.2 |
% |
| (1) |
Fiscal 2024 and fiscal 2023 include intangible amortization expense
and acquisition costs. |
| (2) |
Fiscal 2023 represents the reduction of bad debt charges previously
taken on pre-pandemic trade receivable balances in fiscal
2020. |
| (3) |
Represents a constant currency adjustment, which eliminates the
impact of foreign currency fluctuations on current year
results. |
| (4) |
Includes restructuring costs primarily in Europe. |
| (5) |
Represents intangible amortization expense. |
| (6) |
Includes various transformation initiative costs, primarily
consisting of changes to our business technology strategy. |
| (7) |
Represents due diligence costs. |
| NM |
Represents that the percentage change is not meaningful. |
| |
|
| Sysco
Corporation and its Consolidated
SubsidiariesSegment
ResultsNon-GAAP Reconciliation
(Unaudited)Impact of Certain Items on Applicable
Segments(Dollars in Thousands) |
| |
26-Week Period Ended Dec. 30, 2023 |
|
26-Week Period Ended Dec. 31, 2022 |
|
Change in Dollars |
|
%/bps Change |
| U.S. FOODSERVICE
OPERATIONS |
|
|
|
|
|
|
|
|
Sales (GAAP) |
$ |
27,218,242 |
|
|
$ |
26,679,536 |
|
|
$ |
538,706 |
|
|
2.0 |
% |
| Gross profit (GAAP) |
|
5,262,469 |
|
|
|
5,105,432 |
|
|
|
157,037 |
|
|
3.1 |
% |
| Gross margin (GAAP) |
|
19.33 |
% |
|
|
19.14 |
% |
|
|
|
19 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
3,482,462 |
|
|
$ |
3,418,753 |
|
|
$ |
63,709 |
|
|
1.9 |
% |
| Impact of restructuring and
transformational project costs |
|
(120 |
) |
|
|
(44 |
) |
|
|
(76 |
) |
|
NM |
| Impact of acquisition-related
costs(1) |
|
(24,572 |
) |
|
|
(24,100 |
) |
|
|
(472 |
) |
|
(2.0 |
) |
| Impact of bad debt reserve
adjustments(2) |
|
— |
|
|
|
4,250 |
|
|
|
(4,250 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
3,457,770 |
|
|
$ |
3,398,859 |
|
|
$ |
58,911 |
|
|
1.7 |
% |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
1,780,007 |
|
|
$ |
1,686,679 |
|
|
$ |
93,328 |
|
|
5.5 |
% |
| Impact of restructuring and
transformational project costs |
|
120 |
|
|
|
44 |
|
|
|
76 |
|
|
NM |
| Impact of acquisition-related
costs(1) |
|
24,572 |
|
|
|
24,100 |
|
|
|
472 |
|
|
2.0 |
|
| Impact of bad debt reserve
adjustments(2) |
|
— |
|
|
|
(4,250 |
) |
|
|
4,250 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
$ |
1,804,699 |
|
|
$ |
1,706,573 |
|
|
$ |
98,126 |
|
|
5.7 |
% |
| |
|
|
|
|
|
|
|
| INTERNATIONAL
FOODSERVICE OPERATIONS |
|
|
|
|
|
|
|
| Sales
(GAAP) |
$ |
7,279,668 |
|
|
$ |
6,566,146 |
|
|
$ |
713,522 |
|
|
10.9 |
% |
| Impact of currency
fluctuations(3) |
|
(210,101 |
) |
|
|
— |
|
|
|
(210,101 |
) |
|
(3.2 |
) |
| Comparable sales using
a constant currency basis (Non-GAAP) |
$ |
7,069,567 |
|
|
$ |
6,566,146 |
|
|
$ |
503,421 |
|
|
7.7 |
% |
| |
|
|
|
|
|
|
|
| Gross profit
(GAAP) |
$ |
1,440,139 |
|
|
$ |
1,273,725 |
|
|
$ |
166,414 |
|
|
13.1 |
% |
| Impact of currency
fluctuations(3) |
|
(50,837 |
) |
|
|
— |
|
|
|
(50,837 |
) |
|
(4.0 |
) |
| Comparable gross
profit using a constant currency basis (Non-GAAP) |
$ |
1,389,302 |
|
|
$ |
1,273,725 |
|
|
$ |
115,577 |
|
|
9.1 |
% |
| |
|
|
|
|
|
|
|
| Gross margin
(GAAP) |
|
19.78 |
% |
|
|
19.40 |
% |
|
|
|
38 bps |
| Impact of currency
fluctuations(3) |
|
(0.13 |
) |
|
|
— |
|
|
|
|
-13 bps |
| Comparable gross
margin using a constant currency basis (Non-GAAP) |
|
19.65 |
% |
|
|
19.40 |
% |
|
|
|
25 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
1,263,726 |
|
|
$ |
1,129,332 |
|
|
$ |
134,394 |
|
|
11.9 |
% |
| Impact of restructuring and
transformational project costs(4) |
|
(8,406 |
) |
|
|
(9,495 |
) |
|
|
1,089 |
|
|
11.5 |
|
| Impact of acquisition-related
costs(5) |
|
(33,744 |
) |
|
|
(31,949 |
) |
|
|
(1,795 |
) |
|
(5.6 |
) |
| Impact of bad debt reserve
adjustments(2) |
|
— |
|
|
|
265 |
|
|
|
(265 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
|
1,221,576 |
|
|
|
1,088,153 |
|
|
|
133,423 |
|
|
12.3 |
|
| Impact of currency
fluctuations(3) |
|
(47,743 |
) |
|
|
— |
|
|
|
(47,743 |
) |
|
(4.4 |
) |
| Comparable operating
expenses adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
$ |
1,173,833 |
|
|
$ |
1,088,153 |
|
|
$ |
85,680 |
|
|
7.9 |
% |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
176,413 |
|
|
$ |
144,393 |
|
|
$ |
32,020 |
|
|
22.2 |
% |
| Impact of restructuring and
transformational project costs(4) |
|
8,406 |
|
|
|
9,495 |
|
|
|
(1,089 |
) |
|
(11.5 |
) |
| Impact of acquisition-related
costs(5) |
|
33,744 |
|
|
|
31,949 |
|
|
|
1,795 |
|
|
5.6 |
|
| Impact of bad debt reserve
adjustments(2) |
|
— |
|
|
|
(265 |
) |
|
|
265 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
|
218,563 |
|
|
|
185,572 |
|
|
|
32,991 |
|
|
17.8 |
|
| Impact of currency
fluctuations(3) |
|
(3,094 |
) |
|
|
— |
|
|
|
(3,094 |
) |
|
(1.7 |
) |
| Comparable operating
income adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
$ |
215,469 |
|
|
$ |
185,572 |
|
|
$ |
29,897 |
|
|
16.1 |
% |
| |
|
|
|
|
|
|
|
| SYGMA |
|
|
|
|
|
|
|
| Sales (GAAP) |
$ |
3,819,729 |
|
|
$ |
3,866,993 |
|
|
$ |
(47,264 |
) |
|
(1.2)% |
| Gross profit (GAAP) |
|
301,317 |
|
|
|
304,354 |
|
|
|
(3,037 |
) |
|
(1.0)% |
| Gross margin (GAAP) |
|
7.89 |
% |
|
|
7.87 |
% |
|
|
|
2 bps |
| |
|
|
|
|
|
|
|
| Operating expenses (GAAP) |
$ |
272,204 |
|
|
$ |
291,810 |
|
|
$ |
(19,606 |
) |
|
(6.7)% |
| Operating income (GAAP) |
|
29,113 |
|
|
|
12,544 |
|
|
|
16,569 |
|
|
NM |
| |
|
|
|
|
|
|
|
| OTHER |
|
|
|
|
|
|
|
| Sales (GAAP) |
$ |
590,757 |
|
|
$ |
608,108 |
|
|
$ |
(17,351 |
) |
|
(2.9)% |
| Gross profit (GAAP) |
|
150,982 |
|
|
|
158,149 |
|
|
|
(7,167 |
) |
|
(4.5)% |
| Gross margin (GAAP) |
|
25.56 |
% |
|
|
26.01 |
% |
|
|
|
-45 bps |
| |
|
|
|
|
|
|
|
| Operating expenses (GAAP) |
$ |
130,772 |
|
|
$ |
136,741 |
|
|
$ |
(5,969 |
) |
|
(4.4)% |
| Operating income (GAAP) |
|
20,210 |
|
|
|
21,408 |
|
|
|
(1,198 |
) |
|
(5.6)% |
| |
|
|
|
|
|
|
|
| GLOBAL SUPPORT
CENTER |
|
|
|
|
|
|
|
| Gross profit (loss)
(GAAP) |
$ |
6,498 |
|
|
$ |
(3,189 |
) |
|
$ |
9,687 |
|
|
NM |
| Impact of inventory valuation
adjustment(6) |
|
— |
|
|
|
(2,571 |
) |
|
|
2,571 |
|
|
NM |
| Gross profit (loss)
adjusted for Certain Items (Non-GAAP) |
$ |
6,498 |
|
|
$ |
(5,760 |
) |
|
$ |
12,258 |
|
|
NM |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
508,616 |
|
|
$ |
484,211 |
|
|
$ |
24,405 |
|
|
5.0 |
% |
| Impact of restructuring and
transformational project costs(7) |
|
(24,649 |
) |
|
|
(16,495 |
) |
|
|
(8,154 |
) |
|
(49.4 |
) |
| Impact of acquisition-related
costs(8) |
|
(4,063 |
) |
|
|
(2,365 |
) |
|
|
(1,698 |
) |
|
(71.8 |
) |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
479,904 |
|
|
$ |
465,351 |
|
|
$ |
14,553 |
|
|
3.1 |
% |
| |
|
|
|
|
|
|
|
| Operating loss
(GAAP) |
$ |
(502,118 |
) |
|
$ |
(487,400 |
) |
|
$ |
(14,718 |
) |
|
(3.0)% |
| Impact of inventory valuation
adjustment(6) |
|
— |
|
|
|
(2,571 |
) |
|
|
2,571 |
|
|
NM |
| Impact of restructuring and
transformational project costs(7) |
|
24,649 |
|
|
|
16,495 |
|
|
|
8,154 |
|
|
49.4 |
|
| Impact of acquisition-related
costs(8) |
|
4,063 |
|
|
|
2,365 |
|
|
|
1,698 |
|
|
71.8 |
|
| Operating loss
adjusted for Certain Items (Non-GAAP) |
$ |
(473,406 |
) |
|
$ |
(471,111 |
) |
|
$ |
(2,295 |
) |
|
(0.5)% |
| |
|
|
|
|
|
|
|
| TOTAL
SYSCO |
|
|
|
|
|
|
|
| Sales (GAAP) |
$ |
38,908,396 |
|
|
$ |
37,720,783 |
|
|
$ |
1,187,613 |
|
|
3.1 |
% |
| Gross profit (GAAP) |
|
7,161,405 |
|
|
|
6,838,471 |
|
|
|
322,934 |
|
|
4.7 |
% |
| Gross margin (GAAP) |
|
18.41 |
% |
|
|
18.13 |
% |
|
|
|
28 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
5,657,780 |
|
|
$ |
5,460,847 |
|
|
$ |
196,933 |
|
|
3.6 |
% |
| Impact of restructuring and
transformational project costs(4) (7) |
|
(33,175 |
) |
|
|
(26,034 |
) |
|
|
(7,141 |
) |
|
(27.4 |
) |
| Impact of acquisition-related
costs(1) (5) (8) |
|
(62,379 |
) |
|
|
(58,414 |
) |
|
|
(3,965 |
) |
|
(6.8 |
) |
| Impact of bad debt reserve
adjustments(2) |
|
— |
|
|
|
4,515 |
|
|
|
(4,515 |
) |
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
5,562,226 |
|
|
$ |
5,380,914 |
|
|
$ |
181,312 |
|
|
3.4 |
% |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
1,503,625 |
|
|
$ |
1,377,624 |
|
|
$ |
126,001 |
|
|
9.1 |
% |
| Impact of inventory valuation
adjustment(6) |
|
— |
|
|
|
(2,571 |
) |
|
|
2,571 |
|
|
NM |
| Impact of restructuring and
transformational project costs(4) (7) |
|
33,175 |
|
|
|
26,034 |
|
|
|
7,141 |
|
|
27.4 |
|
| Impact of acquisition-related
costs(1) (5) (8) |
|
62,379 |
|
|
|
58,414 |
|
|
|
3,965 |
|
|
6.8 |
|
| Impact of bad debt reserve
adjustments(2) |
|
— |
|
|
|
(4,515 |
) |
|
|
4,515 |
|
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
$ |
1,599,179 |
|
|
$ |
1,454,986 |
|
|
$ |
144,193 |
|
|
9.9 |
% |
| (1) |
Fiscal 2024 and fiscal 2023 include intangible amortization expense
and acquisition costs. |
| (2) |
Fiscal 2023 represents the reduction of bad debt charges previously
taken on pre-pandemic trade receivable balances in fiscal
2020. |
| (3) |
Represents a constant currency adjustment, which eliminates the
impact of foreign currency fluctuations on current year
results. |
| (4) |
Includes restructuring and severance costs, primarily in
Europe. |
| (5) |
Represents intangible amortization expense. |
| (6) |
Fiscal 2023 represents an adjustment to a product return allowance
related to COVID-related personal protection equipment
inventory. |
| (7) |
Includes various transformation initiative costs, primarily
consisting of changes to our business technology strategy. |
| (8) |
Represents due diligence costs. |
| NM |
Represents that the percentage change is not meaningful. |
| |
|
Sysco Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Free Cash Flow(In
Thousands)
Free cash flow represents net cash provided from
operating activities less purchases of plant and equipment and
includes proceeds from sales of plant and equipment. Sysco
considers free cash flow to be a liquidity measure that provides
useful information to management and investors about the amount of
cash generated by the business after the purchases and sales of
buildings, fleet, equipment and technology, which may potentially
be used to pay for, among other things, strategic uses of cash
including dividend payments, share repurchases and acquisitions.
However, free cash flow may not be available for discretionary
expenditures, as it may be necessary that we use it to make
mandatory debt service or other payments. Free cash flow should not
be used as a substitute for the most comparable GAAP financial
measure in assessing the company’s liquidity for the periods
presented. An analysis of any non-GAAP financial measure should be
used in conjunction with results presented in accordance with GAAP.
In the table that follows, free cash flow for each period presented
is reconciled to net cash provided by operating activities.
| |
| |
26-Week Period Ended Dec. 30, 2023 |
|
26-Week Period Ended Dec. 31, 2022 |
|
26-Week Period Change in Dollars |
|
Net cash provided by operating activities
(GAAP) |
$ |
855,897 |
|
|
$ |
503,466 |
|
|
$ |
352,431 |
|
| Additions to plant and
equipment |
|
(346,797 |
) |
|
|
(309,664 |
) |
|
|
(37,133 |
) |
| Proceeds from sales of plant
and equipment |
|
18,347 |
|
|
|
25,493 |
|
|
|
(7,146 |
) |
| Free Cash Flow
(Non-GAAP) |
$ |
527,447 |
|
|
$ |
219,295 |
|
|
$ |
308,152 |
|
| |
Sysco Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Impact of Certain Items on Earnings
Before Interest, Taxes, Depreciation and Amortization
(EBITDA)(Dollars in Thousands)
EBITDA represents net earnings (loss) plus (i)
interest expense, (ii) income tax expense and benefit, (iii)
depreciation and (iv) amortization. The net earnings (loss)
component of our EBITDA calculation is impacted by Certain Items
that we do not consider representative of our underlying
performance. As a result, in the non-GAAP reconciliations below for
each period presented, adjusted EBITDA is computed as EBITDA plus
the impact of Certain Items, excluding certain items related to
interest expense, income taxes, depreciation and amortization.
Sysco's management considers growth in this metric to be a measure
of overall financial performance that provides useful information
to management and investors about the profitability of the
business, as it facilitates comparison of performance on a
consistent basis from period to period by providing a measurement
of recurring factors and trends affecting our business.
Additionally, it is a commonly used component metric used to inform
on capital structure decisions. Adjusted EBITDA should not be used
as a substitute for the most comparable GAAP financial measure in
assessing the company’s financial performance for the periods
presented. An analysis of any non-GAAP financial measure should be
used in conjunction with results presented in accordance with GAAP.
In the tables that follow, adjusted EBITDA for each period
presented is reconciled to net earnings.
| |
| |
13-Week Period Ended Dec. 30, 2023 |
|
13-Week Period Ended Dec. 31, 2022 |
|
Change in Dollars |
|
% Change |
| Net earnings
(GAAP) |
$ |
415,242 |
|
|
$ |
141,216 |
|
|
$ |
274,026 |
|
|
NM |
|
Interest (GAAP) |
|
149,680 |
|
|
|
132,042 |
|
|
|
17,638 |
|
|
13.4 |
|
| Income taxes (GAAP) |
|
129,876 |
|
|
|
37,260 |
|
|
|
92,616 |
|
|
NM |
| Depreciation and amortization
(GAAP) |
|
219,458 |
|
|
|
190,025 |
|
|
|
29,433 |
|
|
15.5 |
|
| EBITDA
(Non-GAAP) |
$ |
914,256 |
|
|
$ |
500,543 |
|
|
$ |
413,713 |
|
|
82.7 |
% |
| Certain Item adjustments: |
|
|
|
|
|
|
|
|
Impact of restructuring and transformational project costs(1) |
|
10,910 |
|
|
|
14,793 |
|
|
|
(3,883 |
) |
|
(26.2 |
) |
|
Impact of acquisition-related costs(2) |
|
2,332 |
|
|
|
3,049 |
|
|
|
(717 |
) |
|
(23.5 |
) |
|
Impact of bad debt reserve adjustments(3) |
|
— |
|
|
|
(1,923 |
) |
|
|
1,923 |
|
|
NM |
|
Impact of other non-routine gains and losses(4) |
|
— |
|
|
|
314,878 |
|
|
|
(314,878 |
) |
|
NM |
| EBITDA adjusted for
Certain Items (Non-GAAP)(5) |
$ |
927,498 |
|
|
$ |
831,340 |
|
|
$ |
96,158 |
|
|
11.6 |
% |
|
Other expense (income), net, as adjusted (Non-GAAP)(6) |
|
5,245 |
|
|
|
15,427 |
|
|
|
(10,182 |
) |
|
(66.0 |
) |
|
Depreciation and amortization, as adjusted (Non-GAAP)(7) |
|
(187,859 |
) |
|
|
(164,519 |
) |
|
|
(23,340 |
) |
|
(14.2 |
) |
| Operating income
adjusted for Certain Items (Non-GAAP) |
$ |
744,884 |
|
|
$ |
682,248 |
|
|
$ |
62,636 |
|
|
9.2 |
% |
| (1) |
Fiscal 2024 and fiscal 2023 include charges related to
restructuring and severance, as well as various transformation
initiative costs, primarily consisting of changes to our business
technology strategy, excluding charges related to accelerated
depreciation. |
| (2) |
Fiscal 2024 and fiscal 2023 include acquisition and due diligence
costs. |
| (3) |
Fiscal 2023 represents the reduction of bad debt charges previously
taken on pre-pandemic trade receivable balances in fiscal
2020. |
| (4) |
Fiscal 2023 primarily represents a pension settlement charge of
$315 million that resulted from the purchase of a nonparticipating
single premium group annuity contract that transferred defined
benefit plan obligations to an insurer. |
| (5) |
In arriving at adjusted EBITDA, Sysco does not adjust out interest
income of $9 million and $5 million or non-cash stock compensation
expense of $29 million and $24 million in fiscal 2024 and fiscal
2023, respectively. |
| (6) |
Fiscal 2024 represents $5 million in GAAP other expense (income),
net. Fiscal 2023 represents $330 million in GAAP other expense
(income), net less $315 million due to the certain items impact of
a pension settlement charge that resulted from the purchase of a
nonparticipating single premium group annuity contract that
transferred defined benefit plan obligations to an insurer. |
| (7) |
Fiscal 2024 includes $219 million in GAAP depreciation and
amortization expense, less $32 million of Non-GAAP depreciation and
amortization expense primarily related to acquisitions. Fiscal 2023
includes $190 million in GAAP depreciation and amortization
expense, less $26 million of Non-GAAP depreciation and amortization
expense primarily related to acquisitions. |
| NM |
Represents that the percentage change is not meaningful. |
| |
|
| |
26-Week Period Ended Dec. 30, 2023 |
|
26-Week Period Ended Dec. 31, 2022 |
|
Change in Dollars |
|
% Change |
|
Net earnings (GAAP) |
$ |
918,634 |
|
|
$ |
606,784 |
|
|
$ |
311,850 |
|
|
51.4 |
% |
| Interest (GAAP) |
|
284,014 |
|
|
|
256,192 |
|
|
|
27,822 |
|
|
10.9 |
|
| Income taxes (GAAP) |
|
289,092 |
|
|
|
166,594 |
|
|
|
122,498 |
|
|
73.5 |
|
| Depreciation and amortization
(GAAP) |
|
425,465 |
|
|
|
378,949 |
|
|
|
46,516 |
|
|
12.3 |
|
| EBITDA
(Non-GAAP) |
$ |
1,917,205 |
|
|
$ |
1,408,519 |
|
|
$ |
508,686 |
|
|
36.1 |
% |
| Certain Item adjustments: |
|
|
|
|
|
|
|
|
Impact of inventory valuation adjustment(1) |
|
— |
|
|
|
(2,571 |
) |
|
|
2,571 |
|
|
NM |
|
Impact of restructuring and transformational project costs(2) |
|
29,743 |
|
|
|
25,302 |
|
|
|
4,441 |
|
|
17.6 |
|
|
Impact of acquisition-related costs(3) |
|
4,961 |
|
|
|
6,595 |
|
|
|
(1,634 |
) |
|
(24.8 |
) |
|
Impact of bad debt reserve adjustments(4) |
|
— |
|
|
|
(4,515 |
) |
|
|
4,515 |
|
|
NM |
|
Impact of other non-routine gains and losses(5) |
|
— |
|
|
|
314,878 |
|
|
|
(314,878 |
) |
|
NM |
| EBITDA adjusted for
Certain Items (Non-GAAP)(6) |
$ |
1,951,909 |
|
|
$ |
1,748,208 |
|
|
$ |
203,701 |
|
|
11.7 |
% |
|
Other expense (income), net, as adjusted (Non-GAAP)(7) |
|
11,885 |
|
|
|
33,176 |
|
|
|
(21,291 |
) |
|
(64.2 |
) |
|
Depreciation and amortization, as adjusted (Non-GAAP)(8) |
|
(364,615 |
) |
|
|
(326,397 |
) |
|
|
(38,218 |
) |
|
(11.7 |
) |
| Operating income
adjusted for Certain Items (Non-GAAP) |
$ |
1,599,179 |
|
|
$ |
1,454,987 |
|
|
$ |
144,192 |
|
|
9.9 |
% |
| (1) |
Fiscal 2023 represents an adjustment to a product return allowance
related to COVID-related personal protection equipment
inventory. |
| (2) |
Fiscal 2024 and 2023 include charges related to restructuring and
severance, as well as various transformation initiative costs,
primarily consisting of changes to our business technology strategy
and exclude charges related to accelerated depreciation. |
| (3) |
Fiscal 2024 and 2023 include acquisition and due diligence
costs. |
| (4) |
Fiscal 2023 represents the reduction of bad debt charges previously
taken on pre-pandemic trade receivable balances in fiscal
2020. |
| (5) |
Fiscal 2023 primarily represents a pension settlement charge of
$315 million that resulted from the purchase of a nonparticipating
single premium group annuity contract that transferred defined
benefit plan obligations to an insurer. |
| (6) |
In arriving at adjusted EBITDA, Sysco does not exclude interest
income of $20 million and $8 million or non-cash stock compensation
expense of $53 million and $52 million for fiscal 2024 and fiscal
2023, respectively. |
| (7) |
Fiscal 2024 represents $12 million in GAAP other expense (income),
net. Fiscal 2023 represents $348 million in GAAP other expense
(income), net less $315 million due to the certain items impact of
a pension settlement charge that resulted from the purchase of a
nonparticipating single premium group annuity contract that
transferred defined benefit plan obligations to an insurer. |
| (8) |
Fiscal 2024 includes $425 million in GAAP depreciation and
amortization expense, less $61 million of Non-GAAP depreciation and
amortization expense primarily related to acquisitions. Fiscal 2023
includes $379 million in GAAP depreciation and amortization
expense, less $53 million of Non-GAAP depreciation and amortization
expense primarily related to acquisitions. |
| NM |
Represents that the percentage change is not meaningful. |
| |
|
Sysco Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Net Debt to Adjusted
EBITDA(In Thousands)
Net Debt to Adjusted EBITDA is a non-GAAP
financial measure frequently used by investors and credit rating
agencies. Our Net Debt to Adjusted EBITDA ratio is calculated using
a numerator of our debt minus cash and cash equivalents, divided by
the sum of the most recent four quarters of Adjusted EBITDA. In the
table that follows, we have provided the calculation of our debt
and net debt as a ratio of Adjusted EBITDA.
| |
| |
|
Dec. 30, 2023 |
|
Current Maturities of long-term debt |
|
$ |
84,513 |
|
| Long-term debt |
|
|
12,028,122 |
|
| Total
Debt |
|
|
12,112,635 |
|
| Cash & Cash
Equivalents |
|
|
(962,165 |
) |
| Net Debt |
|
$ |
11,150,470 |
|
| |
|
|
| Adjusted EBITDA for
the previous 12 months |
|
$ |
4,050,280 |
|
| |
|
|
| Debt/Adjusted EBITDA
Ratio |
|
|
2.99 |
|
| Net Debt/Adjusted
EBITDA Ratio |
|
|
2.75 |
|
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