Sysco Corporation (NYSE: SYY) today announced financial results for
its 13-week first fiscal quarter ended September 26, 2020.
First Quarter Fiscal 2021 Highlights
- Sales decreased 23.0% to $11.8
billion
- Gross profit decreased 24.6% to
$2.2 billion; gross margin decreased 39 basis points
- Operating income decreased 37.2% to
$419.6 million; adjusted¹ operating income decreased 50.8% to
$364.7 million
- Earnings per share (“EPS”)
decreased $0.45 to $0.42; adjusted¹ EPS decreased $0.64 to
$0.34
“Although our first quarter 2021 results
continue to be impacted by the pandemic, we are pleased with our
overall expense management and our ability to produce positive free
cash flow and a profitable quarter despite a 23% reduction in
sales. We saw improvement in the overall sales environment
throughout the quarter and remain resolutely focused upon serving
our customers. We are confident that Sysco’s business
transformation will accelerate profitable growth as we
differentiate our business from our competition to better serve the
evolving needs of our customers,” said Kevin Hourican, Sysco’s
president and chief executive officer. “I am pleased with the focus
and agility of Sysco’s associates as we work to transform the
company and manage the complexities of the COVID-19 pandemic.”
Our business transformation is on track as Sysco
continues to manage through the COVID-19 pandemic and is using the
crisis as an opportunity to accelerate our strategic
transformation, which will help improve how we serve our customers
and differentiate ourselves from the competition. Our strategic
transformation priorities include acceleration of our work across
our customer-facing tools and technology, sales transformation to
improve selling effectiveness and provide a more customer-centric
structure, regionalization of our U.S. Broadline business, and
becoming a more efficient company -- all of which will enable us to
improve profitability and fund new sources of business growth. Our
success comes from the success of our customers, and our
transformation initiatives will improve how we serve those
customers, both big and small.
¹ Earnings Per Share (EPS) are shown on a
diluted basis unless otherwise specified. Adjusted financial
results exclude certain items, which primarily include adjustments
to our bad debt reserve specific to aged receivables existing prior
to the COVID-19 pandemic, restructuring costs, transformational
project costs and acquisition-related costs. Specific to EPS, this
year’s Certain Items include the impact of a loss on the sale of
Cake Corporation and the impact of a new U.K. tax law change.
Reconciliations of all non-GAAP measures are included at the end of
this release. 2 Free cash flow is a non-GAAP 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 measures
are included at the end of this release.
First Quarter Fiscal 2021
Results
U.S. Foodservice Operations
Sales for the first quarter were $7.9 billion, a
decrease of 25.7% compared to the same period last year. Local case
volume within U.S. Broadline operations decreased 21.6% for the
first quarter, of which a decrease of 21.7% was organic, while
total case volume within U.S. Broadline operations decreased 25.8%,
of which a decrease of 25.9% was organic.
Gross profit decreased 25.4% to $1.6 billion,
and gross margin increased 7 basis points to 20.2%, compared to the
same period last year. Product cost inflation was 1.0% in U.S.
Broadline, as measured by the estimated change in Sysco’s product
costs, primarily in the dairy, paper and disposables, and meat
categories.
Operating expenses decreased $340.0 million, or
25.2%, compared to the same period last year. Adjusted operating
expenses decreased $250.5 million, or 18.6%, compared to the same
period last year.
Operating income was $588.4 million, a decrease
of $205.2 million, or 25.9%, compared to the same period last year.
Adjusted operating income was $503.0 million, a decrease of $294.7
million, or 36.9%, compared to the same period last year.
International Foodservice Operations
Sales for the first quarter were $2.2 billion, a
decrease of 25.7% compared to the same period last year. On a
constant currency basis, sales for the first quarter were $2.1
billion, a decrease of 27.1% compared to the same period last year.
Foreign exchange rates positively affected International
Foodservice Operations sales by 1.4% and total Sysco sales by 0.3%
during the quarter.
Gross profit decreased 25.6% to $450.4 million,
and gross margin increased 4 basis points to 20.8%, in each case as
compared to the same period last year. On a constant currency
basis, gross profit decreased 27.5% to $438.9 million. Foreign
exchange rates positively affected International Foodservice
Operations gross profit by 1.9% and total Sysco gross profit by
0.4% during the quarter.
Operating expenses decreased $99.5 million, or
18.1%, compared to the same period last year. Adjusted
operating expenses decreased $74.6 million, or 14.7%, compared to
the same period last year. On a constant currency basis, adjusted
operating expenses decreased $86.9 million, or 17.2%, compared to
the same period last year. Foreign exchange rates negatively
affected International Foodservice Operations operating expense by
2.4% and total Sysco operating expense by 0.6% during the
quarter.
The International Foodservice Operations segment
delivered an operating loss of $0.5 million, a decrease of $55.3
million compared to the same period last year. Adjusted operating
income was $18.8 million, a decrease of $80.2 million compared to
the same period last year. Foreign exchange rates did not have a
meaningful impact on International Foodservice Operations operating
income during the quarter.
Balance Sheet, Capital Spending and Cash
Flow
Capital expenditures, net of proceeds from sales
of plant and equipment, for the first 13 weeks of fiscal 2021 were
$102.4 million lower compared to the prior year period.
Cash flow from operations was $930.9 million for
the first 13 weeks of fiscal 2021, which was $759.3 million higher
compared to the prior year period. Free cash flow2 for the first 13
weeks of fiscal 2021 was $862.4 million, which was $861.7 million
higher compared to the prior year.
Conference Call &
Webcast
Sysco will host a conference call to review the
company’s first quarter fiscal 2021 financial results on Tuesday,
November 3, 2020, at 10:00 a.m. Eastern. 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 |
|
|
|
|
|
|
Financial Comparison: |
September 26, 2020 |
September 28, 2019 |
Change |
|
Sales |
$11.8 billion |
$15.3 billion |
-23.0% |
|
Gross profit |
$2.2 billion |
$2.9 billion |
-24.6% |
|
Gross Margin |
18.85% |
19.23% |
-39 bps |
|
|
|
|
|
|
GAAP: |
|
|
|
|
Operating expenses |
$1.8 billion |
$2.3 billion |
-20.9% |
|
Certain Items |
$(54.9) million |
$73.6 million |
-174.6% |
|
Operating Income |
$419.6 million |
$668.3 million |
-37.2% |
|
Operating Margin |
3.56% |
4.37% |
-80 bps |
|
Net Earnings |
$216.9 million |
$453.8 million |
-52.2% |
|
Diluted Earnings Per Share |
$0.42 |
$0.87 |
-51.7% |
|
|
|
|
|
|
Non-GAAP (1): |
|
|
|
|
Operating Expenses |
$1.9 billion |
$2.2 billion |
-15.7% |
|
Operating Income |
$364.7 million |
$741.9 million |
-50.8% |
|
Operating Margin |
3.10% |
4.85% |
-175 bps |
|
Net Earnings |
$173.5 million |
$510.3 million |
-66.0% |
|
Diluted Earnings Per Share (2) |
$0.34 |
$0.98 |
-65.3% |
|
|
|
|
|
|
Case Growth: |
|
|
|
|
U.S. Broadline |
-25.8% |
0.5% |
|
|
Local |
-21.6% |
1.5% |
|
|
|
|
|
|
|
Sysco Brand Sales as a % of Cases: |
|
|
|
|
U.S. Broadline |
38.81% |
38.66% |
15 bps |
|
Local |
46.33% |
47.39% |
-106 bps |
Note:
(1) A reconciliation of non-GAAP measures
is included at the end of this release.
(2) Individual components in the table above may
not sum to the totals due to the rounding.
Forward-Looking Statements
Statements made in this press release or in our
earnings call for the first quarter of fiscal 2021 that look
forward in time or that express management’s beliefs, expectations
or hopes are forward-looking statements within the meaning of 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: the effect, impact, potential duration or other
implications of the recent outbreak of a novel strain of
coronavirus (“COVID-19”) and any expectations we may have with
respect thereto; our expectations regarding our ability to manage
the current downturn and capitalize on our position as the industry
leader as the global economy recovers; our expectations regarding
future market share gains; our expectations regarding the effects
of our business transformation initiatives; our belief that our
transformation initiatives will improve how we serve customers; our
expectations regarding our efforts to regionalize our operations
and the benefits to our company from regionalization; our
expectations that our efforts across our customer-facing tools and
technology will improve service to our customers; our plans
regarding the timing of the commencement of piloting our new
pricing software; our plans regarding our sales transformation
initiative and our expectations regarding the effects of our new
sales process; our expectations regarding our company, and our
ability to attract and serve new customers, following the COVID-19
crisis; our plans to remove structural expense from our company’s
operations and the amount of structural savings we expect to
deliver; our expectations regarding savings starting in fiscal 2022
from additional cost improvement opportunities; the effects of our
planned investments in digital technology; our expectations
regarding the timing of improvements in the economy following the
COVID-19 crisis; the impact on our results of government-imposed
restrictions on restaurant operations; our expectations that our
work to accelerate growth will return to pre-COVID levels as demand
resurges; our expectations that our investments in technology and
our business will allow for future growth and exceptional customer
service; our belief that the steps undertaken as part of our
management of the COVID-19 crisis to date will help us retain and
win additional business from our independent restaurant customers
beyond the pandemic; our expectations regarding the impact of our
strategy on our future operations, including on the service we
provide our customers and on our ability to differentiate Sysco
from other companies in our industry; our plans to reinvest a
portion of our cost savings into our growth agenda; our ability to
deliver against our strategic priorities; statements regarding
economic trends in the United States and abroad; our expectations
regarding the amount of our capital expenditures in fiscal 2021;
our expectations regarding the deployment of capital proceeds that
Sysco currently holds; our expectations regarding the effects of
our divestiture of our CAKE business; our expectations regarding
our free cash flow during fiscal 2021; and our expectations
regarding our cash performance in the second quarter of fiscal
2021.
The success of our plans and expectations
regarding our operating performance are subject to the general
risks associated with our business, including the risks of
interruption of supplies due to lack of long-term contracts, severe
weather, crop conditions, work stoppages, intense competition,
technology disruptions, dependence on large, long-term regional and
national customers, inflation risks, the impact of fuel prices,
adverse publicity, labor issues, political or financial
instability, trade restrictions, tariffs, currency exchange rates,
transport capacity and costs and other factors relating to foreign
trade, any or all of which could delay our receipt of product or
increase our input costs. Risks and uncertainties also include the
impact and effects of public health crises, pandemics and
epidemics, such as the COVID-19 pandemic, and the adverse impact
thereof on our business, financial condition and results of
operations, including, but not limited to, our growth, product
costs, supply chain, labor availability, logistical capabilities,
customer demand for our products and industry demand generally,
consumer spending, our liquidity, the price of our securities and
trading markets with respect thereto, our credit ratings, our
ability to maintain compliance with the covenants in our credit
agreement, our ability to access capital markets, and the global
economy and financial markets generally. Risks and uncertainties
also include risks impacting the economy generally, including the
risks that the current general economic conditions will
deteriorate, or consumer confidence in the economy or consumer
spending, particularly on food-away-from-home, may decline. Market
conditions may not improve. Competition and the impact of GPOs may
reduce our margins and make it difficult for us to maintain our
market share, growth rate and profitability. We may not be able to
fully compensate for increases in fuel costs, and fuel hedging
arrangements intended to contain fuel costs could result in above
market fuel costs. Our ability to meet our long-term strategic
objectives depends on our ability to grow gross profit, leverage
our supply chain costs and reduce administrative costs. This will
depend largely on the success of our various business initiatives,
including efforts related to revenue management, expense
management, our digital e-commerce strategy and any efforts related
to restructuring or the reduction of administrative costs. There
are various risks related to these efforts, including the risk that
if sales from our locally managed customers do not grow at the same
rate as sales from regional and national customers, or if we are
unable to continue to accelerate local case growth, our gross
margins may decline; the risk that we are unlikely to be able to
predict inflation over the long term, and lower inflation is likely
to produce lower gross profit; the risk that our efforts to
mitigate increases in warehouse costs may be unsuccessful; the risk
that we may not be able to accelerate and/or identify additional
administrative cost savings in order to compensate for any gross
profit or supply chain cost leverage challenges; the risk that
these efforts may not provide the expected benefits in our
anticipated time frame, if at all, and may prove costlier than
expected; the risk that the actual costs of any initiatives may be
greater or less than currently expected; and the risk of adverse
effects to our business, results of operations and liquidity if
past and future undertakings, and the associated changes to our
business, do not prove to be cost effective or do not result in the
cost savings and other benefits at the levels that we anticipate.
Our plans related to and the timing of any initiatives are subject
to change at any time based on management’s subjective evaluation
of our overall business needs. If we are unable to realize the
anticipated benefits from our efforts, we could become cost
disadvantaged in the marketplace, and our competitiveness and our
profitability could decrease. Adverse publicity about us or lack of
confidence in our products could negatively impact our reputation
and reduce earnings. Capital expenditures may vary based on changes
in business plans and other factors, including risks related to the
implementation of various initiatives, the timing and successful
completion of acquisitions, construction schedules and the
possibility that other cash requirements could result in delays or
cancellations of capital spending. Periods of significant or
prolonged inflation or deflation, either overall or in certain
product categories, can have a negative impact on us and our
customers, as high food costs can reduce consumer spending in the
food-away-from-home market, and may negatively impact our sales,
gross profit, operating income and earnings, and periods of
deflation can be difficult to manage effectively. Fluctuations in
inflation and deflation, as well as fluctuations in the value of
foreign currencies, are beyond our control and subject to broader
market forces. Expanding into international markets presents unique
challenges and risks, including compliance with local laws,
regulations and customs and the impact of local political and
economic conditions, including the impact of Brexit and the “yellow
vest” protests in France against a fuel tax increase, pension
reform and the French government, and such expansion efforts may
not be successful. Any business that we acquire may not perform as
expected, and we may not realize the anticipated benefits of our
acquisitions. Expectations regarding the financial statement impact
of any acquisitions may change based on management’s subjective
evaluation. A divestiture of one or more of our businesses may not
provide the anticipated effects on our operations. Meeting our
dividend target objectives depends on our level of earnings,
available cash and the success of our various strategic
initiatives. Changes in applicable tax laws or regulations and the
resolution of tax disputes could negatively affect our financial
results. We rely on technology in our business and any
cybersecurity incident, other technology disruption or delay in
implementing new technology could negatively affect our business
and our relationships with customers. For a discussion of
additional factors impacting Sysco’s business, see our Annual
Report on Form 10-K for the year ended June 27, 2020, 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 57,000 associates, the company operates
326 distribution facilities worldwide and serves more than 625,000
customer locations. For fiscal 2020 that ended June 27, 2020, the
company generated sales of more than $52 billion. Information about
our CSR program, including Sysco’s 2020 Corporate Social
Responsibility Report, can be found at sysco.com/csr2020report.
For more information, visit
www.sysco.com or connect with Sysco on Facebook at
www.facebook.com/SyscoCorporation or Twitter at
https://twitter.com/Sysco. 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. Investors should also follow us at
www.twitter.com/SyscoStock and download the Sysco IR App, available
on the iTunes App Store and the Google Play Market. 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(In Thousands, Except for Share and Per
Share Data)
| |
13-Week Period Ended |
| |
Sep. 26, 2020 |
|
Sep. 28, 2019 |
| |
|
|
|
|
Sales |
$ |
11,777,379 |
|
|
$ |
15,303,005 |
|
| Cost of sales |
9,557,534 |
|
|
12,359,635 |
|
| Gross profit |
2,219,845 |
|
|
2,943,370 |
|
| Operating expenses |
1,800,266 |
|
|
2,275,052 |
|
| Operating income |
419,579 |
|
|
668,318 |
|
| Interest expense |
146,717 |
|
|
83,335 |
|
| Other expense (income),
net |
14,124 |
|
|
3,112 |
|
| Earnings before income
taxes |
258,738 |
|
|
581,871 |
|
| Income taxes |
41,838 |
|
|
128,090 |
|
| Net earnings |
$ |
216,900 |
|
|
$ |
453,781 |
|
| |
|
|
|
| Net earnings: |
|
|
|
| Basic earnings per share |
$ |
0.43 |
|
|
$ |
0.88 |
|
| Diluted earnings per
share |
0.42 |
|
|
0.87 |
|
| |
|
|
|
| Average shares
outstanding |
509,127,405 |
|
|
513,496,296 |
|
| Diluted shares
outstanding |
510,738,760 |
|
|
518,761,456 |
|
Sysco Corporation and its Consolidated
SubsidiariesCONSOLIDATED BALANCE
SHEETS(In Thousands, Except for Share
Data)
| |
Sep. 26, 2020 |
|
Jun. 27, 2020 |
| |
|
|
|
|
ASSETS |
| Current
assets |
|
|
|
|
Cash and cash equivalents |
$ |
5,985,532 |
|
|
$ |
6,059,427 |
|
| Accounts receivable, less
allowances of $265,597 and $334,810 |
3,106,466 |
|
|
2,893,551 |
|
| Inventories |
3,134,732 |
|
|
3,095,085 |
|
| Prepaid expenses and other
current assets |
197,074 |
|
|
192,163 |
|
| Income tax receivable |
9,294 |
|
|
108,006 |
|
| Total current assets |
12,433,098 |
|
|
12,348,232 |
|
| Plant and equipment at cost,
less accumulated depreciation |
4,404,597 |
|
|
4,458,567 |
|
| Other long-term
assets |
|
|
|
| Goodwill |
3,794,152 |
|
|
3,732,469 |
|
| Intangibles, less
amortization |
776,598 |
|
|
780,172 |
|
| Deferred income taxes |
228,234 |
|
|
194,115 |
|
| Operating lease right-of-use
assets, net |
621,307 |
|
|
603,616 |
|
| Other assets |
483,572 |
|
|
511,095 |
|
| Total other long-term
assets |
5,903,863 |
|
|
5,821,467 |
|
| Total assets |
$ |
22,741,558 |
|
|
$ |
22,628,266 |
|
| |
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
| Current
liabilities |
|
|
|
| Notes payable |
$ |
5,408 |
|
|
$ |
2,266 |
|
| Accounts payable |
4,035,332 |
|
|
3,447,065 |
|
| Accrued expenses |
1,697,995 |
|
|
1,616,289 |
|
| Accrued income taxes |
— |
|
|
2,938 |
|
| Current operating lease
liabilities |
108,704 |
|
|
107,167 |
|
| Current maturities of
long-term debt |
1,320,628 |
|
|
1,542,128 |
|
| Total current liabilities |
7,168,067 |
|
|
6,717,853 |
|
| Long-term
liabilities |
|
|
|
| Long-term debt |
12,422,780 |
|
|
12,902,485 |
|
| Deferred income taxes |
54,011 |
|
|
86,601 |
|
| Long-term operating lease
liabilities |
545,485 |
|
|
523,496 |
|
| Other long-term
liabilities |
1,217,227 |
|
|
1,204,953 |
|
| Total long-term
liabilities |
14,239,503 |
|
|
14,717,535 |
|
| Commitments and
contingencies |
|
|
|
| Noncontrolling interest |
33,977 |
|
|
34,265 |
|
| 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 |
1,534,281 |
|
|
1,506,901 |
|
| Retained earnings |
10,546,598 |
|
|
10,563,008 |
|
| Accumulated other
comprehensive loss |
(1,612,386 |
) |
|
(1,710,881 |
) |
| Treasury stock at cost,
256,075,772 and 256,915,825 shares |
(9,933,657 |
) |
|
(9,965,590 |
) |
| Total shareholders’
equity |
1,300,011 |
|
|
1,158,613 |
|
| Total liabilities and
shareholders’ equity |
$ |
22,741,558 |
|
|
$ |
22,628,266 |
|
Sysco Corporation and its Consolidated
SubsidiariesCONSOLIDATED CASH
FLOWS(In Thousands)
|
|
13-Week Period Ended |
| |
Sep. 26, 2020 |
|
Sep. 28, 2019 |
| Cash flows from operating
activities: |
|
|
|
|
Net earnings |
$ |
216,900 |
|
|
$ |
453,781 |
|
|
Adjustments to reconcile net earnings to cash provided by operating
activities: |
|
|
|
|
Share-based compensation expense |
25,834 |
|
|
21,386 |
|
|
Depreciation and amortization |
180,520 |
|
|
187,405 |
|
|
Operating lease asset amortization |
27,379 |
|
|
26,925 |
|
|
Amortization of debt issuance and other debt-related costs |
6,554 |
|
|
4,920 |
|
|
Deferred income taxes |
(53,579 |
) |
|
(25,494 |
) |
|
Provision for losses on receivables |
(77,790 |
) |
|
18,712 |
|
|
Loss on sale of business |
12,043 |
|
|
— |
|
|
Other non-cash items |
(6,641 |
) |
|
2,295 |
|
|
Additional changes in certain assets and liabilities, net of effect
of businesses acquired: |
|
|
|
|
Increase in receivables |
(111,261 |
) |
|
(236,136 |
) |
|
Increase in inventories |
(23,320 |
) |
|
(186,331 |
) |
|
Decrease (increase) in prepaid expenses and other current
assets |
5,577 |
|
|
(30,133 |
) |
|
Increase (decrease) in accounts payable |
577,013 |
|
|
(38,894 |
) |
|
Increase (decrease) in accrued expenses |
56,042 |
|
|
(92,661 |
) |
|
Decrease in operating lease liabilities |
(31,167 |
) |
|
(30,597 |
) |
|
Increase in accrued income taxes |
98,712 |
|
|
89,467 |
|
|
Decrease in other assets |
7,187 |
|
|
3,141 |
|
|
Increase in other long-term liabilities |
20,911 |
|
|
3,793 |
|
|
Net cash provided by operating activities |
930,914 |
|
|
171,579 |
|
| |
|
|
|
| Cash flows from investing
activities: |
|
|
|
|
Additions to plant and equipment |
(75,539 |
) |
|
(175,728 |
) |
|
Proceeds from sales of plant and equipment |
7,064 |
|
|
4,902 |
|
|
Acquisition of businesses, net of cash acquired |
— |
|
|
(74,814 |
) |
|
Purchase of marketable securities |
(26,557 |
) |
|
(4,002 |
) |
|
Proceeds from sales of marketable securities |
12,166 |
|
|
3,018 |
|
|
Net cash used for investing activities |
(82,866 |
) |
|
(246,624 |
) |
| |
|
|
|
| Cash flows from financing
activities: |
|
|
|
|
Bank and commercial paper borrowings, net |
3,110 |
|
|
533,400 |
|
|
Other debt borrowings |
6,159 |
|
|
31,789 |
|
|
Other debt repayments |
(762,858 |
) |
|
(16,139 |
) |
|
Proceeds from stock option exercises |
31,933 |
|
|
85,317 |
|
|
Treasury stock purchases |
— |
|
|
(349,314 |
) |
|
Dividends paid |
(228,714 |
) |
|
(200,037 |
) |
|
Other financing activities (1) |
(457 |
) |
|
(22,311 |
) |
|
Net cash (used for) provided by financing activities |
(950,827 |
) |
|
62,705 |
|
| |
|
|
|
|
Effect of exchange rates on cash, cash equivalents and restricted
cash |
17,095 |
|
|
(5,485 |
) |
| |
|
|
|
|
Net decrease in cash and cash equivalents (2) |
(85,684 |
) |
|
(17,825 |
) |
| Cash, cash equivalents and
restricted cash at beginning of period |
6,095,570 |
|
|
532,245 |
|
| Cash, cash equivalents and
restricted cash at end of period (2) |
$ |
6,009,886 |
|
|
$ |
514,420 |
|
| |
|
|
|
| Supplemental disclosures of
cash flow information: |
|
|
|
| Cash paid during the period
for: |
|
|
|
|
Interest |
$ |
104,879 |
|
|
$ |
84,407 |
|
|
Income taxes |
6,851 |
|
|
70,013 |
|
(1) Change includes cash paid for shares withheld to
cover taxes, debt issuance costs and other financing
activities.
(2) Change includes restricted cash
included within other assets in the Consolidated Balance Sheet.
Sysco Corporation and its Consolidated
SubsidiariesNon-GAAP Reconciliation
(Unaudited)Impact of Certain Items
Sysco’s results of operations for fiscal 2021
and fiscal 2020 were impacted by restructuring and transformational
project costs consisting of: (1) restructuring charges; (2)
expenses associated with our various transformation initiatives;
and (3) facility closure and severance charges. All
acquisition-related costs in fiscal 2021 and fiscal 2020 that have
been designated as Certain Items relate to the fiscal 2017
acquisition of Cucina Lux Investments Limited (the Brakes
Acquisition). These include acquisition-related intangible
amortization expense.
Fiscal 2021 results of operations were also
positively impacted by the reduction of bad debt expense previously
recognized in fiscal 2020 due to the unexpected impact of the
COVID-19 pandemic on the collectability of our pre-pandemic trade
receivable balances. Many of Sysco’s customers, including those in
the restaurant, hospitality and education segments, are operating
at a substantially reduced volume due to governmental requirements
for closures or other social-distancing measures and a portion of
Sysco’s customers are closed. Some of these customers ceased paying
their outstanding receivables, creating uncertainty as to their
collectability. We experienced an increase in past due receivables
and recognized additional bad debt charges in the third and fourth
quarters of fiscal 2020; however, collections have improved in
fiscal 2021. We have estimated uncollectible amounts based on the
current collection experience and by applying write-off percentages
based on historical loss experience, including loss experience
during times of local and regional disasters. The COVID-19 pandemic
is more widespread and longer in duration than historical disasters
impacting our business, and it is possible that actual
uncollectible amounts will differ and additional charges may be
required; however, if collections continue to improve, it is also
possible that additional reductions in our bad debt reserve could
occur. While Sysco traditionally incurs bad debt expense, the
magnitude of such expenses and benefits, that we have experienced
is not indicative of our normal operations. Our adjusted results
have not been normalized in a manner that would exclude the full
impact of the COVID-19 pandemic on our business. As such, Sysco has
not adjusted its results for lost sales, inventory write-offs or
other costs associated with the COVID-19 pandemic not previously
stated.
The results of our foreign operations can be
impacted due to changes in exchange rates applicable in converting
local currencies to U.S. dollars. We measure our International
Foodservice Operations 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. The constant currency impact on our adjusted International
Foodservice Operations results are disclosed when the impact
exceeds a defined threshold of greater than 1% on the growth
metric. If the amount does not exceed this threshold, a disclosure
will be made that the impact of the currency change was not
significant.
Management believes that adjusting its operating
expenses, operating income, net earnings and diluted earnings per
share to remove these Certain Items and presenting its
International Foodservice Operations results on a constant currency
basis, provides an important perspective with respect to our
underlying business trends and results and provides meaningful
supplemental information to both management and investors that (1)
is indicative of the performance of the company’s underlying
operations, facilitating comparisons on a year-over-year basis and
(2) removes those items that are difficult to predict and are often
unanticipated and that, as a result, are difficult to include in
analysts’ financial models and our investors’ expectations with any
degree of specificity.
Although Sysco has a history of growth through
acquisitions, the Brakes Group was significantly larger than the
companies historically acquired by Sysco, with a proportionately
greater impact on Sysco’s consolidated financial statements.
Accordingly, Sysco is excluding from its non-GAAP financial
measures for the relevant period solely those acquisition costs
specific to the Brakes Acquisition. We believe this approach
significantly enhances the comparability of Sysco’s results for
fiscal 2021 and fiscal 2020.
Set forth below is a reconciliation of sales,
operating expenses, operating income, interest 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 add up to the total presented
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-WeekPeriod EndedSep. 26, 2020 |
|
13-WeekPeriod EndedSep. 28, 2019 |
|
Change inDollars |
|
% Change |
|
Operating expenses (GAAP) |
$ |
1,800,266 |
|
|
$ |
2,275,052 |
|
|
$ |
(474,786 |
) |
|
-20.9 |
% |
| Impact of restructuring and
transformational project costs (1) |
(25,964 |
) |
|
(56,722 |
) |
|
30,758 |
|
|
-54.2 |
|
| Impact of acquisition-related
costs (2) |
(17,755 |
) |
|
(16,909 |
) |
|
(846 |
) |
|
5.0 |
|
| Impact of bad debt reserve
adjustments (3) |
98,629 |
|
|
— |
|
|
98,629 |
|
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
1,855,176 |
|
|
$ |
2,201,421 |
|
|
$ |
(346,245 |
) |
|
-15.7 |
% |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
419,579 |
|
|
$ |
668,318 |
|
|
$ |
(248,739 |
) |
|
-37.2 |
% |
| Impact of restructuring and
transformational project costs (1) |
25,964 |
|
|
56,722 |
|
|
(30,758 |
) |
|
-54.2 |
|
| Impact of acquisition-related
costs (2) |
17,755 |
|
|
16,909 |
|
|
846 |
|
|
5.0 |
|
| Impact of bad debt reserve
adjustments (3) |
(98,629 |
) |
|
— |
|
|
(98,629 |
) |
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
$ |
364,669 |
|
|
$ |
741,949 |
|
|
$ |
(377,280 |
) |
|
-50.8 |
% |
| |
|
|
|
|
|
|
|
| Other (income) expense
(GAAP) |
$ |
14,124 |
|
|
$ |
3,112 |
|
|
$ |
11,012 |
|
|
NM |
| Impact of loss on sale of a
business |
(12,043 |
) |
|
— |
|
|
(12,043 |
) |
|
NM |
| Other (income) expense
(Non-GAAP) |
$ |
2,081 |
|
|
$ |
3,112 |
|
|
$ |
(1,031 |
) |
|
-33.1 |
% |
| |
|
|
|
|
|
|
|
| Net earnings
(GAAP) |
$ |
216,900 |
|
|
$ |
453,781 |
|
|
$ |
(236,881 |
) |
|
-52.2 |
% |
| Impact of restructuring and
transformational project costs (1) |
25,964 |
|
|
56,722 |
|
|
(30,758 |
) |
|
-54.2 |
|
| Impact of acquisition-related
costs (2) |
17,755 |
|
|
16,909 |
|
|
846 |
|
|
5.0 |
|
| Impact of bad debt reserve
adjustments (3) |
(98,629 |
) |
|
— |
|
|
(98,629 |
) |
|
NM |
| Impact of loss on sale of a
business |
12,043 |
|
|
— |
|
|
12,043 |
|
|
NM |
| Tax impact of restructuring
and transformational project costs (4) |
(5,920 |
) |
|
(13,921 |
) |
|
8,001 |
|
|
-57.5 |
|
| Tax impact of
acquisition-related costs (4) |
(4,048 |
) |
|
(4,149 |
) |
|
101 |
|
|
-2.4 |
|
| Tax impact of bad debt reserve
adjustments (4) |
22,488 |
|
|
— |
|
|
22,488 |
|
|
NM |
| Tax impact of loss on sale of
a business |
(7,553 |
) |
|
— |
|
|
(7,553 |
) |
|
NM |
| Impact of foreign tax rate
change |
(5,548 |
) |
|
924 |
|
|
(6,472 |
) |
|
NM |
| Net earnings adjusted
for Certain Items (Non-GAAP) |
$ |
173,452 |
|
|
$ |
510,266 |
|
|
$ |
(336,814 |
) |
|
-66.0 |
% |
| |
|
|
|
|
|
|
|
| Diluted earnings per
share (GAAP) |
$ |
0.42 |
|
|
$ |
0.87 |
|
|
$ |
(0.45 |
) |
|
-51.7 |
% |
| Impact of restructuring and
transformational project costs (1) |
0.05 |
|
|
0.11 |
|
|
(0.06 |
) |
|
-54.5 |
|
| Impact of acquisition-related
costs (2) |
0.03 |
|
|
0.03 |
|
|
— |
|
|
NM |
| Impact of bad debt reserve
adjustments (3) |
(0.19 |
) |
|
— |
|
|
(0.19 |
) |
|
NM |
| Impact of loss on sale of a
business |
0.02 |
|
|
— |
|
|
0.02 |
|
|
NM |
| Tax impact of restructuring
and transformational project costs (4) |
(0.01 |
) |
|
(0.03 |
) |
|
0.02 |
|
|
-66.7 |
|
| Tax impact of
acquisition-related costs (4) |
(0.01 |
) |
|
(0.01 |
) |
|
— |
|
|
NM |
| Tax impact of bad debt reserve
adjustments (4) |
0.04 |
|
|
— |
|
|
0.04 |
|
|
NM |
| Tax impact loss on sale of a
business |
(0.01 |
) |
|
— |
|
|
(0.01 |
) |
|
NM |
| Tax impact of foreign tax rate
change |
(0.01 |
) |
|
— |
|
|
(0.01 |
) |
|
NM |
| Diluted EPS adjusted
for Certain Items (Non-GAAP) (5) |
$ |
0.34 |
|
|
$ |
0.98 |
|
|
$ |
(0.64 |
) |
|
-65.3 |
% |
| |
|
|
|
|
|
|
|
| Diluted shares
outstanding |
|
510,738,760 |
|
|
|
518,761,456 |
|
|
|
|
|
|
(1) |
Fiscal 2021 includes $13 million related to various transformation
initiative costs, primarily consisting of changes to our business
technology strategy, and $13 million primarily consisting of
restructuring charges. Fiscal 2020 includes $30 million related to
restructuring, facility closure and severance charges and $27
million related to various transformation initiative costs. |
|
(2) |
Fiscal 2021 and fiscal 2020 include $18 million and $17 million,
respectively, related to intangible amortization expense from the
Brakes Acquisition, which is included in the results of
International Foodservice. |
|
(3) |
Represents the reduction of bad debt charges previously taken on
pre-pandemic trade receivable balances in fiscal 2020. |
|
(4) |
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. |
|
(5) |
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-WeekPeriod EndedSep. 26, 2020 |
|
13-WeekPeriod EndedSep. 28, 2019 |
|
Change inDollars |
|
%/bps Change |
| U.S. FOODSERVICE
OPERATIONS |
|
|
|
|
|
|
|
|
Sales |
$ |
7,921,533 |
|
|
$ |
10,658,633 |
|
|
$ |
(2,737,100 |
) |
|
-25.7 |
% |
| Gross Profit |
1,599,707 |
|
|
2,144,886 |
|
|
(545,179 |
) |
|
-25.4 |
% |
| Gross Margin |
20.19 |
% |
|
20.12 |
% |
|
|
|
7 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
1,011,298 |
|
|
$ |
1,351,268 |
|
|
$ |
(339,970 |
) |
|
-25.2 |
% |
| Impact of restructuring and
transformational project costs (1) |
(940 |
) |
|
(4,126 |
) |
|
3,186 |
|
|
-77.2 |
|
| Impact of bad debt reserve
adjustments (2) |
86,317 |
|
|
— |
|
|
86,317 |
|
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
1,096,675 |
|
|
$ |
1,347,142 |
|
|
$ |
(250,467 |
) |
|
-18.6 |
% |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
588,409 |
|
|
$ |
793,618 |
|
|
$ |
(205,209 |
) |
|
-25.9 |
% |
| Impact of restructuring and
transformational project costs (1) |
940 |
|
|
4,126 |
|
|
(3,186 |
) |
|
-77.2 |
|
| Impact of bad debt reserve
adjustments (2) |
(86,317 |
) |
|
— |
|
|
(86,317 |
) |
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
$ |
503,032 |
|
|
$ |
797,744 |
|
|
$ |
(294,712 |
) |
|
-36.9 |
% |
| |
|
|
|
|
|
|
|
| INTERNATIONAL
FOODSERVICE OPERATIONS |
|
|
|
|
|
|
|
| Sales
(GAAP) |
$ |
2,163,693 |
|
|
$ |
2,912,388 |
|
|
$ |
(748,695 |
) |
|
-25.7 |
% |
| Impact of currency
fluctuations (3) |
(40,640 |
) |
|
— |
|
|
(40,640 |
) |
|
1.4 |
|
| Comparable sales using
a constant currency basis (Non-GAAP) |
$ |
2,123,053 |
|
|
$ |
2,912,388 |
|
|
$ |
(789,335 |
) |
|
-27.1 |
% |
| |
|
|
|
|
|
|
|
| Gross Profit
(GAAP) |
$ |
450,398 |
|
|
$ |
605,185 |
|
|
$ |
(154,787 |
) |
|
-25.6 |
% |
| Impact of currency
fluctuations (3) |
(11,512 |
) |
|
— |
|
|
(11,512 |
) |
|
1.9 |
|
| Comparable gross
profit using a constant currency basis (Non-GAAP) |
$ |
438,886 |
|
|
$ |
605,185 |
|
|
$ |
(166,299 |
) |
|
-27.5 |
% |
| |
|
|
|
|
|
|
|
| Gross Margin
(GAAP) |
20.82 |
% |
|
20.78 |
% |
|
|
|
4 bps |
| Impact of currency
fluctuations (3) |
0.15 |
|
|
— |
|
|
|
|
15 bps |
| Comparable gross
margin using a constant currency basis (Non-GAAP) |
20.67 |
% |
|
20.78 |
% |
|
|
|
-11 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
450,935 |
|
|
$ |
550,385 |
|
|
$ |
(99,450 |
) |
|
-18.1 |
% |
| Impact of restructuring and
transformational project costs (4) |
(12,993 |
) |
|
(27,272 |
) |
|
14,279 |
|
|
-52.4 |
|
| Impact of acquisition-related
costs (5) |
(17,755 |
) |
|
(16,909 |
) |
|
(846 |
) |
|
5.0 |
|
| Impact of bad debt reserve
adjustments (2) |
11,429 |
|
|
— |
|
|
11,429 |
|
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
431,616 |
|
|
$ |
506,204 |
|
|
$ |
(74,588 |
) |
|
-14.7 |
% |
| Impact of currency
fluctuations (3) |
(12,329 |
) |
|
— |
|
|
(12,329 |
) |
|
2.4 |
|
| Comparable operating
expenses adjusted for Certain Items using a constant currency basis
(Non-GAAP) |
$ |
419,287 |
|
|
$ |
506,204 |
|
|
$ |
(86,917 |
) |
|
-17.2 |
% |
| |
|
|
|
|
|
|
|
| Operating income
(loss) (GAAP) |
$ |
(537 |
) |
|
$ |
54,800 |
|
|
$ |
(55,337 |
) |
|
-101.0 |
% |
| Impact of restructuring and
transformational project costs (4) |
12,993 |
|
|
27,272 |
|
|
(14,279 |
) |
|
-52.4 |
|
| Impact of acquisition-related
costs (5) |
17,755 |
|
|
16,909 |
|
|
846 |
|
|
5.0 |
|
| Impact of bad debt reserve
adjustments (2) |
(11,429 |
) |
|
— |
|
|
(11,429 |
) |
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) * |
$ |
18,782 |
|
|
$ |
98,981 |
|
|
$ |
(80,199 |
) |
|
-81.0 |
% |
| |
|
|
|
|
|
|
|
| SYGMA |
|
|
|
|
|
|
|
| Sales |
$ |
1,524,148 |
|
|
$ |
1,446,994 |
|
|
$ |
77,154 |
|
|
5.3 |
% |
| Gross Profit |
131,541 |
|
|
125,918 |
|
|
5,623 |
|
|
4.5 |
% |
| Gross Margin |
8.63 |
% |
|
8.70 |
% |
|
|
|
-7 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
119,849 |
|
|
$ |
118,348 |
|
|
$ |
1,501 |
|
|
1.3 |
% |
| Impact of restructuring and
transformational project costs (1) |
(13 |
) |
|
(2,585 |
) |
|
2,572 |
|
|
-99.5 |
|
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
119,836 |
|
|
$ |
115,763 |
|
|
$ |
4,073 |
|
|
3.5 |
% |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
11,692 |
|
|
$ |
7,570 |
|
|
$ |
4,122 |
|
|
54.5 |
% |
| Impact of restructuring and
transformational project costs (1) |
13 |
|
|
2,585 |
|
|
(2,572 |
) |
|
-99.5 |
|
| Operating income
adjusted for Certain Items (Non-GAAP) |
$ |
11,705 |
|
|
$ |
10,155 |
|
|
$ |
1,550 |
|
|
15.3 |
% |
| |
|
|
|
|
|
|
|
| OTHER |
|
|
|
|
|
|
|
| Sales |
$ |
168,005 |
|
|
$ |
284,990 |
|
|
$ |
(116,985 |
) |
|
-41.0 |
% |
| Gross Profit |
40,430 |
|
|
71,744 |
|
|
(31,314 |
) |
|
-43.6 |
% |
| Gross Margin |
24.06 |
% |
|
25.17 |
% |
|
|
|
-111 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
40,435 |
|
|
$ |
61,607 |
|
|
$ |
(21,172 |
) |
|
-34.4 |
% |
| Impact of bad debt reserve
adjustments (2) |
883 |
|
|
— |
|
|
883 |
|
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
41,318 |
|
|
$ |
61,607 |
|
|
(20,289 |
) |
|
-32.9 |
% |
| |
|
|
|
|
|
|
|
| Operating (loss)
income (GAAP) |
$ |
(5 |
) |
|
$ |
10,137 |
|
|
$ |
(10,142 |
) |
|
-100.0 |
% |
| Impact of bad debt reserve
adjustments (2) |
(883 |
) |
|
— |
|
|
(883 |
) |
|
NM |
| Operating (loss)
income adjusted for Certain Items (Non-GAAP) |
$ |
(888 |
) |
|
$ |
10,137 |
|
|
(11,025 |
) |
|
-108.8 |
% |
| |
|
|
|
|
|
|
|
|
CORPORATE |
|
|
|
|
|
|
|
| Gross Profit |
$ |
(2,231 |
) |
|
$ |
(4,363 |
) |
|
$ |
2,132 |
|
|
-48.9 |
% |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
177,749 |
|
|
$ |
193,444 |
|
|
$ |
(15,695 |
) |
|
-8.1 |
% |
| Impact of restructuring and
transformational project costs (6) |
(12,018 |
) |
|
(22,739 |
) |
|
10,721 |
|
|
-47.1 |
|
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
165,731 |
|
|
$ |
170,705 |
|
|
$ |
(4,974 |
) |
|
-2.9 |
% |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
(179,980 |
) |
|
$ |
(197,807 |
) |
|
$ |
17,827 |
|
|
-9.0 |
% |
| Impact of restructuring and
transformational project costs (6) |
12,018 |
|
|
22,739 |
|
|
(10,721 |
) |
|
-47.1 |
|
| Operating income
adjusted for Certain Items (Non-GAAP) |
$ |
(167,962 |
) |
|
$ |
(175,068 |
) |
|
$ |
7,106 |
|
|
-4.1 |
% |
| |
|
|
|
|
|
|
|
| TOTAL
SYSCO |
|
|
|
|
|
|
|
| Sales |
$ |
11,777,379 |
|
|
$ |
15,303,005 |
|
|
$ |
(3,525,626 |
) |
|
-23.0 |
% |
| Gross Profit |
2,219,845 |
|
|
2,943,370 |
|
|
(723,525 |
) |
|
-24.6 |
% |
| Gross Margin |
18.85 |
% |
|
19.23 |
% |
|
|
|
-39 bps |
| |
|
|
|
|
|
|
|
| Operating expenses
(GAAP) |
$ |
1,800,266 |
|
|
$ |
2,275,052 |
|
|
$ |
(474,786 |
) |
|
-20.9 |
% |
| Impact of restructuring and
transformational project costs (1) (4) (6) |
(25,964 |
) |
|
(56,722 |
) |
|
30,758 |
|
|
-54.2 |
|
| Impact of acquisition-related
costs (5) |
(17,755 |
) |
|
(16,909 |
) |
|
(846 |
) |
|
5.0 |
|
| Impact of bad debt reserve
adjustments (2) |
98,629 |
|
|
— |
|
|
98,629 |
|
|
NM |
| Operating expenses
adjusted for Certain Items (Non-GAAP) |
$ |
1,855,176 |
|
|
$ |
2,201,421 |
|
|
$ |
(346,245 |
) |
|
-15.7 |
% |
| |
|
|
|
|
|
|
|
| Operating income
(GAAP) |
$ |
419,579 |
|
|
$ |
668,318 |
|
|
$ |
(248,739 |
) |
|
-37.2 |
% |
| Impact of restructuring and
transformational project costs (1) (4) (6) |
25,964 |
|
|
56,722 |
|
|
(30,758 |
) |
|
-54.2 |
|
| Impact of acquisition-related
costs (5) |
17,755 |
|
|
16,909 |
|
|
846 |
|
|
5.0 |
|
| Impact of bad debt reserve
adjustments (2) |
(98,629 |
) |
|
— |
|
|
(98,629 |
) |
|
NM |
| Operating income
adjusted for Certain Items (Non-GAAP) |
$ |
364,669 |
|
|
$ |
741,949 |
|
|
$ |
(377,280 |
) |
|
-50.8 |
% |
|
(1) |
Includes charges related to restructuring and business
transformation projects. |
|
(2) |
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, severance and facility closure costs
primarily in Europe. |
|
(5) |
Fiscal 2021 and fiscal 2020 include $18 million and $17 million,
respectively, related to intangible amortization expense from the
Brakes Acquisition. |
|
(6) |
Fiscal 2021 and fiscal 2020 include various transformation
initiative costs, primarily consisting of changes to our business
technology strategy. |
|
* |
Foreign exchange rates did not have a meaningful impact during the
period; therefore, the constant currency adjustment is not
disclosed. |
|
|
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 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.
| |
13-WeekPeriod EndedSep. 26, 2020 |
|
13-WeekPeriod EndedSep. 28, 2019 |
|
13-WeekPeriod Changein Dollars |
|
Net cash provided by operating activities
(GAAP) |
$ |
930,914 |
|
|
$ |
171,579 |
|
|
$ |
759,335 |
| Additions to plant and
equipment |
(75,539 |
) |
|
(175,728 |
) |
|
100,189 |
| Proceeds from sales of plant
and equipment |
7,064 |
|
|
4,902 |
|
|
2,162 |
| Free Cash Flow
(Non-GAAP) |
$ |
862,440 |
|
|
$ |
753 |
|
|
$ |
861,687 |
|
For more information contact: |
|
|
|
|
Shannon MutschlerMedia Contactmutschler.shannon@corp.sysco.comT
281-584-4059 |
Rachel LeeInvestor Contactlee.rachel@corp.sysco.comT
281-436-7815 |
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