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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sysco Corp | NYSE:SYY | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.2818 | -0.37% | 75.0782 | 75.80 | 74.84 | 75.54 | 1,023,766 | 18:37:55 |
(Mark One) | |||||
☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 74-1648137 | ||||||||||
(State or other jurisdiction of incorporation or organization) | (IRS employer identification number) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Common stock, $1.00 Par Value | SYY | New York Stock Exchange | ||||||||||||
1.25% Notes due June 2023 | SYY 23 | New York Stock Exchange |
Large Accelerated Filer | ☑ | Accelerated Filer | ☐ | ||||||||
Non-accelerated Filer | ☐ | Smaller Reporting Company | ☐ | ||||||||
(Do not check if a smaller reporting company) | Emerging growth company | ☐ |
PART I – FINANCIAL INFORMATION | Page No. | |||||||
PART II – OTHER INFORMATION | ||||||||
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 | |||||||||||||||
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 |
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 |
13-Week Period Ended | |||||||||||||||||||||||
Sep. 26, 2020 | Sep. 28, 2019 | ||||||||||||||||||||||
Net earnings | $ | 216,900 | $ | 453,781 | |||||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Foreign currency translation adjustment | 113,140 | (126,159) | |||||||||||||||||||||
Items presented net of tax: | |||||||||||||||||||||||
Amortization of cash flow hedges | 2,155 | 2,155 | |||||||||||||||||||||
Change in net investment hedges | (11,261) | 30,000 | |||||||||||||||||||||
Change in cash flow hedges | (12,967) | 9,259 | |||||||||||||||||||||
Amortization of prior service cost | 137 | 1,428 | |||||||||||||||||||||
Amortization of actuarial loss | 7,765 | 6,683 | |||||||||||||||||||||
Change in marketable securities | (474) | 933 | |||||||||||||||||||||
Total other comprehensive income (loss) | 98,495 | (75,701) | |||||||||||||||||||||
Comprehensive income | $ | 315,395 | $ | 378,080 | |||||||||||||||||||
Accumulated
Other Comprehensive Loss |
|||||||||||||||||||||||||||||||||||||||||||||||
Common Stock |
Paid-in
Capital |
Retained
Earnings |
Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amounts | Totals | |||||||||||||||||||||||||||||||||||||||||||
Balance as of June 27, 2020 | 765,174,900 | $ | 765,175 | $ | 1,506,901 | $ | 10,563,008 | $ | (1,710,881) | 256,915,825 | $ | (9,965,590) | $ | 1,158,613 | |||||||||||||||||||||||||||||||||
Net earnings | 216,900 | 216,900 | |||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 113,140 | 113,140 | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of cash flow hedges, net of tax | 2,155 | 2,155 | |||||||||||||||||||||||||||||||||||||||||||||
Change in cash flow hedges, net of tax | (12,967) | (12,967) | |||||||||||||||||||||||||||||||||||||||||||||
Change in net investment hedges, net of tax | (11,261) | (11,261) | |||||||||||||||||||||||||||||||||||||||||||||
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax | 7,902 | 7,902 | |||||||||||||||||||||||||||||||||||||||||||||
Change in marketable securities, net of tax | (474) | (474) | |||||||||||||||||||||||||||||||||||||||||||||
Adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), net of tax | (2,068) | (2,068) | |||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.45 per common share) | (231,242) | (231,242) | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation awards | 27,380 | (840,053) | 31,933 | 59,313 | |||||||||||||||||||||||||||||||||||||||||||
Balance as of September 26, 2020 | 765,174,900 | $ | 765,175 | $ | 1,534,281 | $ | 10,546,598 | $ | (1,612,386) | 256,075,772 | $ | (9,933,657) | $ | 1,300,011 | |||||||||||||||||||||||||||||||||
Accumulated
Other Comprehensive Loss |
|||||||||||||||||||||||||||||||||||||||||||||||
Common Stock |
Paid-in
Capital |
Retained
Earnings |
Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amounts | Totals | |||||||||||||||||||||||||||||||||||||||||||
Balance as of June 29, 2019 | 765,174,900 | $ | 765,175 | $ | 1,457,419 | $ | 11,229,679 | $ | (1,599,729) | 252,297,926 | $ | (9,349,941) | $ | 2,502,603 | |||||||||||||||||||||||||||||||||
Net earnings | 453,781 | 453,781 | |||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | (126,159) | (126,159) | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of cash flow hedges, net of tax | 2,155 | 2,155 | |||||||||||||||||||||||||||||||||||||||||||||
Change in cash flow hedges, net of tax | 9,259 | 9,259 | |||||||||||||||||||||||||||||||||||||||||||||
Change in net investment hedges, net of tax | 30,000 | 30,000 | |||||||||||||||||||||||||||||||||||||||||||||
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax | 8,111 | 8,111 | |||||||||||||||||||||||||||||||||||||||||||||
Change in marketable securities, net of tax | 933 | 933 | |||||||||||||||||||||||||||||||||||||||||||||
Adoption of ASU 2016-02, Leases (Topic 842), net of tax | 1,978 | 1,978 | |||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.39 per common share) | (198,605) | (198,605) | |||||||||||||||||||||||||||||||||||||||||||||
Treasury stock purchases | 4,587,397 | (347,867) | (347,867) | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation awards | 33,242 | (2,574,697) | 85,317 | 118,559 | |||||||||||||||||||||||||||||||||||||||||||
Balance as of September 28, 2019 | 765,174,900 | $ | 765,175 | $ | 1,490,661 | $ | 11,486,833 | $ | (1,675,430) | 254,310,626 | $ | (9,612,491) | $ | 2,454,748 |
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 | (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, cash equivalents and restricted cash | (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 | $ | 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 |
Sep. 26, 2020 | Sep. 28, 2019 | ||||||||||
(In thousands) | |||||||||||
Cash and cash equivalents | $ | 5,985,532 | $ | 455,482 | |||||||
Restricted cash (1)
|
24,354 | 58,938 | |||||||||
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows | $ | 6,009,886 | $ | 514,420 |
13-Week Period Ended Sep. 26, 2020 | ||||||||||||||||||||||||||||||||
US Foodservice Operations | International Foodservice Operations | SYGMA | Other | Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Principal Product Categories | ||||||||||||||||||||||||||||||||
Fresh and frozen meats | $ | 1,491,000 | $ | 314,172 | $ | 428,919 | $ | — | $ | 2,234,091 | ||||||||||||||||||||||
Canned and dry products | 1,391,218 | 391,578 | 29,573 | — | 1,812,369 | |||||||||||||||||||||||||||
Frozen fruits, vegetables, bakery and other | 1,048,833 | 426,565 | 256,787 | — | 1,732,185 | |||||||||||||||||||||||||||
Poultry | 830,775 | 179,026 | 216,635 | — | 1,226,436 | |||||||||||||||||||||||||||
Dairy products | 819,493 | 232,956 | 147,029 | — | 1,199,478 | |||||||||||||||||||||||||||
Fresh produce | 767,097 | 170,538 | 64,982 | — | 1,002,617 | |||||||||||||||||||||||||||
Paper and disposables | 677,321 | 90,709 | 179,174 | 11,638 | 958,842 | |||||||||||||||||||||||||||
Seafood | 481,717 | 88,567 | 25,096 | — | 595,380 | |||||||||||||||||||||||||||
Beverage products | 179,652 | 77,466 | 148,591 | 11,210 | 416,919 | |||||||||||||||||||||||||||
Other (1)
|
234,427 | 192,116 | 27,362 | 145,157 | 599,062 | |||||||||||||||||||||||||||
Total Sales | $ | 7,921,533 | $ | 2,163,693 | $ | 1,524,148 | $ | 168,005 | $ | 11,777,379 |
13-Week Period Ended Sep. 28, 2019 | ||||||||||||||||||||||||||||||||
US Foodservice Operations | International Foodservice Operations | SYGMA | Other | Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Principal Product Categories | ||||||||||||||||||||||||||||||||
Fresh and frozen meats | $ | 2,075,300 | $ | 412,155 | $ | 381,377 | $ | — | $ | 2,868,832 | ||||||||||||||||||||||
Canned and dry products | 1,898,889 | 586,625 | 37,190 | — | 2,522,704 | |||||||||||||||||||||||||||
Frozen fruits, vegetables, bakery and other | 1,449,218 | 552,014 | 254,455 | — | 2,255,687 | |||||||||||||||||||||||||||
Dairy products | 1,148,381 | 312,178 | 145,921 | — | 1,606,480 | |||||||||||||||||||||||||||
Poultry | 1,090,106 | 218,600 | 204,269 | — | 1,512,975 | |||||||||||||||||||||||||||
Fresh produce | 998,164 | 257,758 | 60,933 | — | 1,316,855 | |||||||||||||||||||||||||||
Paper and disposables | 719,540 | 98,342 | 168,436 | 17,373 | 1,003,691 | |||||||||||||||||||||||||||
Seafood | 685,410 | 149,590 | 24,855 | — | 859,855 | |||||||||||||||||||||||||||
Beverage products | 290,785 | 132,852 | 143,679 | 24,329 | 591,645 | |||||||||||||||||||||||||||
Other (1)
|
302,840 | 192,274 | 25,879 | 243,288 | 764,281 | |||||||||||||||||||||||||||
Total Sales | $ | 10,658,633 | $ | 2,912,388 | $ | 1,446,994 | $ | 284,990 | $ | 15,303,005 |
Assets Measured at Fair Value as of Sep. 26, 2020 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash equivalents | |||||||||||||||||||||||
Cash and cash equivalents | $ | 5,038,629 | $ | 469,034 | $ | — | $ | 5,507,663 | |||||||||||||||
Other assets (1)
|
24,354 | — | — | 24,354 | |||||||||||||||||||
Total assets at fair value | $ | 5,062,983 | $ | 469,034 | $ | — | $ | 5,532,017 | |||||||||||||||
Assets Measured at Fair Value as of Jun. 27, 2020 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash equivalents | |||||||||||||||||||||||
Cash and cash equivalents | $ | 5,245,487 | $ | 300,200 | $ | — | $ | 5,545,687 | |||||||||||||||
Other assets (1)
|
36,143 | — | — | 36,143 | |||||||||||||||||||
Total assets at fair value | $ | 5,281,630 | $ | 300,200 | $ | — | $ | 5,581,830 | |||||||||||||||
Sep. 26, 2020 | |||||||||||||||||||||||||||||||||||
Amortized Cost Basis | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Short-Term Marketable Securities | Long-Term Marketable Securities | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||||||||||||
Corporate bonds | $ | 88,593 | $ | 3,524 | $ | (174) | $ | 91,943 | $ | 17,762 | $ | 74,181 | |||||||||||||||||||||||
Government bonds | 33,265 | 5,035 | (1) | 38,299 | — | 38,299 | |||||||||||||||||||||||||||||
Total marketable securities | $ | 121,858 | $ | 8,559 | $ | (175) | $ | 130,242 | $ | 17,762 | $ | 112,480 | |||||||||||||||||||||||
Jun. 27, 2020 | |||||||||||||||||||||||||||||||||||
Amortized Cost Basis | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Short-Term Marketable Securities | Long-Term Marketable Securities | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||||||||||||
Corporate bonds | $ | 78,651 | $ | 4,064 | $ | — | $ | 82,715 | $ | 18,233 | $ | 64,482 | |||||||||||||||||||||||
Government bonds | 28,633 | 4,919 | — | 33,552 | — | 33,552 | |||||||||||||||||||||||||||||
Total marketable securities | $ | 107,284 | $ | 8,983 | $ | — | $ | 116,267 | $ | 18,233 | $ | 98,034 |
Maturity Date of the Hedging Instrument | Currency / Unit of Measure | Notional Value | ||||||||||||
(In millions) | ||||||||||||||
Hedging of interest rate risk | ||||||||||||||
July 2021 | U.S. Dollar | 500 | ||||||||||||
June 2023 | Euro | 500 | ||||||||||||
March 2025 | U.S. Dollar | 500 | ||||||||||||
Hedging of foreign currency risk | ||||||||||||||
Various (September 28, 2020 to October 2020) | Swedish Krona | 57 | ||||||||||||
Various (October 2020 to February 2021) | British Pound Sterling | 7 | ||||||||||||
June 2023 | Euro | 500 | ||||||||||||
Hedging of fuel risk | ||||||||||||||
Various (September 30, 2020 to December 2021) | Gallons | 43 |
Derivative Fair Value | |||||||||||||||||
Balance Sheet location | Sep. 26, 2020 | Jun. 27, 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Fair Value Hedges: | |||||||||||||||||
Interest rate swaps | Other current assets | $ | 4,013 | $ | 1,388 | ||||||||||||
Interest rate swaps | Other assets | 62,594 | 69,782 | ||||||||||||||
Cash Flow Hedges: | |||||||||||||||||
Fuel swaps | Other current assets | $ | 455 | $ | 233 | ||||||||||||
Foreign currency forwards | Other current assets | 753 | 1,063 | ||||||||||||||
Fuel swaps | Other assets | 385 | 1,173 | ||||||||||||||
Cross currency swaps | Other assets | — | 19,614 | ||||||||||||||
Fuel swaps | Other current liabilities | 21,160 | 28,242 | ||||||||||||||
Foreign currency forwards | Other current liabilities | — | 222 | ||||||||||||||
13-Week Period Ended | ||||||||||||||||||||||||||
Sep. 26, 2020 | Sep. 28, 2019 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value hedges are recorded | $ | 146,717 | $ | 83,335 | ||||||||||||||||||||||
Gain or (loss) on fair value hedging relationships: | ||||||||||||||||||||||||||
Interest rate swaps: | ||||||||||||||||||||||||||
Hedged items | $ | (9,998) | $ | (24,736) | ||||||||||||||||||||||
Derivatives designated as hedging instruments | 3,457 | 8,857 | ||||||||||||||||||||||||
13-Week Period Ended | ||||||||||||||||||||||||||
Sep. 26, 2020 | Sep. 28, 2019 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Interest expense | $ | (14,834) | $ | (14,557) | ||||||||||||||||||||||
Increase (decrease) in fair value of debt | (4,836) | 10,179 | ||||||||||||||||||||||||
Hedged items | $ | (9,998) | $ | (24,736) |
13-Week Period Ended Sep. 26, 2020 | |||||||||||||||||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | |||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||
Derivatives in cash flow hedging relationships: | |||||||||||||||||
Fuel swaps | $ | 2,891 | Operating expense | $ | (8,652) | ||||||||||||
Foreign currency contracts | (19,732) | Cost of sales / Other income | (2,692) | ||||||||||||||
Total | $ | (16,841) | $ | (11,344) | |||||||||||||
Derivatives in net investment hedging relationships: | |||||||||||||||||
Foreign denominated debt | (36,550) | N/A | — | ||||||||||||||
Total | $ | (36,550) | $ | — | |||||||||||||
13-Week Period Ended Sep. 28, 2019 | |||||||||||||||||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | |||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||
Derivatives in cash flow hedging relationships: | |||||||||||||||||
Fuel swaps | $ | 344 | Operating expense | $ | (3,406) | ||||||||||||
Foreign currency contracts | 12,307 | Cost of sales / Other income | 2 | ||||||||||||||
Total | $ | 12,651 | $ | (3,404) | |||||||||||||
Derivatives in net investment hedging relationships: | |||||||||||||||||
Foreign currency contracts | $ | 20,852 | N/A | $ | — | ||||||||||||
Foreign denominated debt | 21,450 | N/A | — | ||||||||||||||
Total | $ | 42,302 | $ | — |
Sep. 26, 2020 | |||||||||||
Carrying Amount of Hedged Assets (Liabilities) | Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) | ||||||||||
(In thousands) | |||||||||||
Balance sheet location: | |||||||||||
Current maturities of long-term debt | $ | (499,678) | $ | (4,198) | |||||||
Long-term debt | (1,064,374) | (62,594) |
Jun. 27, 2020 | |||||||||||
Carrying Amount of Hedged Assets (Liabilities) | Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) | ||||||||||
(In thousands) | |||||||||||
Balance sheet location: | |||||||||||
Current maturities of long-term debt | $ | (749,924) | $ | (1,388) | |||||||
Long-term debt | (1,563,636) | (70,239) |
13-Week Period Ended | |||||||||||||||||||||||
Sep. 26, 2020 | Sep. 28, 2019 | ||||||||||||||||||||||
(In thousands, except for share
and per share data) |
|||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net earnings | $ | 216,900 | $ | 453,781 | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted-average basic shares outstanding | 509,127,405 | 513,496,296 | |||||||||||||||||||||
Dilutive effect of share-based awards | 1,611,355 | 5,265,160 | |||||||||||||||||||||
Weighted-average diluted shares outstanding | 510,738,760 | 518,761,456 | |||||||||||||||||||||
Basic earnings per share | $ | 0.43 | $ | 0.88 | |||||||||||||||||||
Diluted earnings per share | $ | 0.42 | $ | 0.87 |
13-Week Period Ended Sep. 26, 2020 | |||||||||||||||||||||||
Location of
Expense (Income) Recognized in Net Earnings |
Before Tax
Amount |
Tax |
Net of Tax
Amount |
||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Pension and other postretirement benefit plans: | |||||||||||||||||||||||
Reclassification adjustments: | |||||||||||||||||||||||
Amortization of prior service cost | Other expense, net | $ | 183 | $ | 46 | $ | 137 | ||||||||||||||||
Amortization of actuarial loss, net | Other expense, net | 10,353 | 2,588 | 7,765 | |||||||||||||||||||
Total reclassification adjustments | 10,536 | 2,634 | 7,902 | ||||||||||||||||||||
Foreign currency translation: | |||||||||||||||||||||||
Foreign currency translation adjustment | N/A | 113,140 | — | 113,140 | |||||||||||||||||||
Marketable securities: | |||||||||||||||||||||||
Change in marketable securities (1)
|
N/A | (600) | (126) | (474) | |||||||||||||||||||
Hedging instruments: | |||||||||||||||||||||||
Other comprehensive income (loss) before reclassification adjustments: | |||||||||||||||||||||||
Change in cash flow hedge (3)
|
Operating expenses (2)
|
(16,841) | (3,874) | (12,967) | |||||||||||||||||||
Change in net investment hedge | N/A | (20,399) | (9,138) | (11,261) | |||||||||||||||||||
Total other comprehensive income before reclassification adjustments | (37,240) | (13,012) | (24,228) | ||||||||||||||||||||
Reclassification adjustments: | |||||||||||||||||||||||
Amortization of cash flow hedges | Interest expense | 2,874 | 719 | 2,155 | |||||||||||||||||||
Total other comprehensive income | $ | 88,710 | $ | (9,785) | $ | 98,495 |
13-Week Period Ended Sep. 28, 2019 | |||||||||||||||||||||||
Location of
Expense (Income) Recognized in Net Earnings |
Before Tax
Amount |
Tax |
Net of Tax
Amount |
||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Pension and other postretirement benefit plans: | |||||||||||||||||||||||
Reclassification adjustments: | |||||||||||||||||||||||
Amortization of prior service cost | Other expense, net | $ | 1,905 | $ | 477 | $ | 1,428 | ||||||||||||||||
Amortization of actuarial loss, net | Other expense, net | 8,942 | 2,259 | 6,683 | |||||||||||||||||||
Total reclassification adjustments | 10,847 | 2,736 | 8,111 | ||||||||||||||||||||
Foreign currency translation: | |||||||||||||||||||||||
Foreign currency translation adjustment | N/A | (126,159) | — | (126,159) | |||||||||||||||||||
Marketable Securities: | |||||||||||||||||||||||
Change in marketable securities (1)
|
N/A | 1,181 | 248 | 933 | |||||||||||||||||||
Hedging instruments: | |||||||||||||||||||||||
Other comprehensive income (loss) before reclassification adjustments: | |||||||||||||||||||||||
Change in cash flow hedges |
Operating expenses (2)
|
12,651 | 3,392 | 9,259 | |||||||||||||||||||
Change in net investment hedges | N/A | 42,302 | 12,302 | 30,000 | |||||||||||||||||||
Total other comprehensive income (loss) before reclassification adjustments | 54,953 | 15,694 | 39,259 | ||||||||||||||||||||
Reclassification adjustments: | |||||||||||||||||||||||
Amortization of cash flow hedges | Interest expense | 2,874 | 719 | 2,155 | |||||||||||||||||||
Total other comprehensive loss | $ | (56,304) | $ | 19,397 | $ | (75,701) |
13-Week Period Ended Sep. 26, 2020 | |||||||||||||||||||||||||||||
Pension and Other Postretirement Benefit Plans,
net of tax |
Foreign Currency Translation |
Hedging,
net of tax |
Marketable Securities,
net of tax |
Total | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Balance as of June 27, 2020 | $ | (1,265,714) | $ | (402,384) | $ | (49,878) | $ | 7,095 | $ | (1,710,881) | |||||||||||||||||||
Equity adjustment from foreign currency translation | — | 113,140 | — | — | 113,140 | ||||||||||||||||||||||||
Amortization of cash flow hedges | — | — | 2,155 | — | 2,155 | ||||||||||||||||||||||||
Change in net investment hedges | — | — | (11,261) | — | (11,261) | ||||||||||||||||||||||||
Change in cash flow hedge | — | — | (12,967) | — | (12,967) | ||||||||||||||||||||||||
Amortization of unrecognized prior service cost | 137 | — | — | — | 137 | ||||||||||||||||||||||||
Amortization of unrecognized net actuarial losses | 7,765 | — | — | — | 7,765 | ||||||||||||||||||||||||
Change in marketable securities | — | — | — | (474) | (474) | ||||||||||||||||||||||||
Balance as of Sep. 26, 2020 | $ | (1,257,812) | $ | (289,244) | $ | (71,951) | $ | 6,621 | $ | (1,612,386) |
13-Week Period Ended Sep. 28, 2019 | |||||||||||||||||||||||||||||
Pension and Other Postretirement Benefit Plans,
net of tax |
Foreign Currency Translation |
Hedging,
net of tax |
Marketable Securities,
net of tax |
Total | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Balance as of Jun. 29, 2019 | $ | (1,217,617) | $ | (290,169) | $ | (94,770) | 2,827 | $ | (1,599,729) | ||||||||||||||||||||
Equity adjustment from foreign currency translation | — | (126,159) | — | — | (126,159) | ||||||||||||||||||||||||
Amortization of cash flow hedges | — | — | 2,155 | — | 2,155 | ||||||||||||||||||||||||
Change in net investment hedges | — | — | 30,000 | — | 30,000 | ||||||||||||||||||||||||
Change in cash flow hedge | — | — | 9,259 | — | 9,259 | ||||||||||||||||||||||||
Amortization of unrecognized prior service cost | 1,428 | — | — | — | 1,428 | ||||||||||||||||||||||||
Amortization of unrecognized net actuarial losses | 6,683 | — | — | — | 6,683 | ||||||||||||||||||||||||
Change in marketable securities | — | — | — | 933 | 933 | ||||||||||||||||||||||||
Balance as of Sep. 28, 2019 | $ | (1,209,506) | $ | (416,328) | $ | (53,356) | $ | 3,760 | $ | (1,675,430) |
13-Week Period Ended | |||||||||||||||||||||||
Sep. 26, 2020 | Sep. 28, 2019 | ||||||||||||||||||||||
Sales: | (In thousands) | ||||||||||||||||||||||
U.S. Foodservice Operations | $ | 7,921,533 | $ | 10,658,633 | |||||||||||||||||||
International Foodservice Operations | 2,163,693 | 2,912,388 | |||||||||||||||||||||
SYGMA | 1,524,148 | 1,446,994 | |||||||||||||||||||||
Other | 168,005 | 284,990 | |||||||||||||||||||||
Total | $ | 11,777,379 | $ | 15,303,005 | |||||||||||||||||||
13-Week Period Ended | |||||||||||||||||||||||
Sep. 26, 2020 | Sep. 28, 2019 | ||||||||||||||||||||||
Operating income (loss): | (In thousands) | ||||||||||||||||||||||
U.S. Foodservice Operations | $ | 588,409 | $ | 793,618 | |||||||||||||||||||
International Foodservice Operations | (537) | 54,800 | |||||||||||||||||||||
SYGMA | 11,692 | 7,570 | |||||||||||||||||||||
Other | (5) | 10,137 | |||||||||||||||||||||
Total segments | 599,559 | 866,125 | |||||||||||||||||||||
Corporate | (179,980) | (197,807) | |||||||||||||||||||||
Total 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 |
13-Week Period Ended | |||||||||||||||||||||||
Sep. 26, 2020 | Sep. 28, 2019 | ||||||||||||||||||||||
Sales | 100.0 | % | 100.0 | % | |||||||||||||||||||
Cost of sales | 81.2 | 80.8 | |||||||||||||||||||||
Gross profit | 18.8 | 19.2 | |||||||||||||||||||||
Operating expenses | 15.3 | 14.9 | |||||||||||||||||||||
Operating income | 3.5 | 4.3 | |||||||||||||||||||||
Interest expense | 1.2 | 0.5 | |||||||||||||||||||||
Other expense (income), net | 0.1 | — | |||||||||||||||||||||
Earnings before income taxes | 2.2 | 3.8 | |||||||||||||||||||||
Income taxes | 0.4 | 0.8 | |||||||||||||||||||||
Net earnings | 1.8 | % | 3.0 | % |
13-Week Period Ended | |||||||||||
Sep. 26, 2020 | |||||||||||
Sales | (23.0) | % | |||||||||
Cost of sales | (22.7) | ||||||||||
Gross profit | (24.6) | ||||||||||
Operating expenses | (20.9) | ||||||||||
Operating income | (37.2) | ||||||||||
Interest expense | 76.1 | ||||||||||
Other expense (income), net (1)
|
353.9 | ||||||||||
Earnings before income taxes | (55.5) | ||||||||||
Income taxes | (67.3) | ||||||||||
Net earnings | (52.2) | % | |||||||||
Basic earnings per share | (51.1) | % | |||||||||
Diluted earnings per share | (51.7) | ||||||||||
Average shares outstanding | (0.9) | ||||||||||
Diluted shares outstanding | (1.5) |
13-Week Period Ended Sep. 26, 2020 | |||||||||||||||||||||||||||||||||||
U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Corporate |
Consolidated
Totals |
||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Sales | $ | 7,921,533 | $ | 2,163,693 | $ | 1,524,148 | $ | 168,005 | $ | — | $ | 11,777,379 | |||||||||||||||||||||||
Sales increase (decrease) | (25.7) | % | (25.7) | % | 5.3 | % | (41.0) | % | (23.0) | % | |||||||||||||||||||||||||
Percentage of total | 67.3 | % | 18.4 | % | 12.9 | % | 1.4 | % | 100.0 | % | |||||||||||||||||||||||||
Operating income (loss) | $ | 588,409 | $ | (537) | $ | 11,692 | $ | (5) | $ | (179,980) | $ | 419,579 | |||||||||||||||||||||||
Operating income (loss) increase (decrease) | (25.9) | % | NM | 54.5 | % | NM | (37.2) | % | |||||||||||||||||||||||||||
Percentage of total segments | 98.1 | % | (0.1) | % | 2.0 | % | — | % | 100.0 | % | |||||||||||||||||||||||||
Operating income (loss) as a percentage of sales | 7.4 | % | — | % | 0.8 | % | — | % | 3.6 | % |
13-Week Period Ended Sep. 28, 2019 | |||||||||||||||||||||||||||||||||||
U.S. Foodservice Operations | International Foodservice Operations | SYGMA | Other | Corporate |
Consolidated
Totals |
||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Sales | $ | 10,658,633 | $ | 2,912,388 | $ | 1,446,994 | $ | 284,990 | $ | — | $ | 15,303,005 | |||||||||||||||||||||||
Percentage of total | 69.7 | % | 19.0 | % | 9.5 | % | 1.8 | % | 100.0 | % | |||||||||||||||||||||||||
Operating income | $ | 793,618 | $ | 54,800 | $ | 7,570 | $ | 10,137 | $ | (197,807) | $ | 668,318 | |||||||||||||||||||||||
Percentage of total segments | 91.6 | % | 6.3 | % | 0.9 | % | 1.2 | % | 100.0 | % | |||||||||||||||||||||||||
Operating income as a percentage of sales | 7.4 | % | 1.9 | % | 0.5 | % | 3.6 | % | 4.3 | % |
13-Week Period Ended Sep. 26, 2020 | 13-Week Period Ended Sep. 28, 2019 | Change in Dollars | % Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Sales | $ | 7,921,533 | $ | 10,658,633 | $ | (2,737,100) | (25.7) | % | |||||||||||||||
Gross profit | 1,599,707 | 2,144,886 | (545,179) | (25.4) | |||||||||||||||||||
Operating expenses | 1,011,298 | 1,351,268 | (339,970) | (25.2) | |||||||||||||||||||
Operating income | $ | 588,409 | $ | 793,618 | $ | (205,209) | (25.9) | % | |||||||||||||||
Gross profit | $ | 1,599,707 | $ | 2,144,886 | $ | (545,179) | (25.4) | % | |||||||||||||||
Adjusted operating expenses (Non-GAAP) | 1,096,675 | 1,347,142 | (250,467) | (18.6) | |||||||||||||||||||
Adjusted operating income (Non-GAAP) | $ | 503,032 | $ | 797,744 | $ | (294,712) | (36.9) | % | |||||||||||||||
Increase (Decrease) | |||||||||||||||||||||||
13-Week Period | |||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
Cause of change | Percentage | Dollars | |||||||||||||||||||||
Case volume | (25.6) | % | $ | (2,728.2) | |||||||||||||||||||
Inflation | 0.9 | 92.2 | |||||||||||||||||||||
Acquisitions | 0.3 | 33.8 | |||||||||||||||||||||
Other (1)
|
(1.3) | (134.9) | |||||||||||||||||||||
Total change in sales | (25.7) | % | $ | (2,737.1) | |||||||||||||||||||
13-Week Period Ended Sep. 26, 2020 | 13-Week Period Ended Sep. 28, 2019 | Change in Dollars | % Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Sales | $ | 2,163,693 | $ | 2,912,388 | $ | (748,695) | (25.7) | % | |||||||||||||||
Gross profit | 450,398 | 605,185 | (154,787) | (25.6) | |||||||||||||||||||
Operating expenses | 450,935 | 550,385 | (99,450) | (18.1) | |||||||||||||||||||
Operating (loss) income | $ | (537) | $ | 54,800 | $ | (55,337) | NM | ||||||||||||||||
Gross profit | $ | 450,398 | $ | 605,185 | $ | (154,787) | (25.6) | % | |||||||||||||||
Adjusted operating expenses (Non-GAAP) | 431,616 | 506,204 | (74,588) | (14.7) | |||||||||||||||||||
Adjusted operating income (Non-GAAP) | $ | 18,782 | $ | 98,981 | $ | (80,199) | (81.0) | % | |||||||||||||||
Sales on a constant currency basis (Non-GAAP) | $ | 2,123,053 | $ | 2,912,388 | $ | (789,335) | (27.1) | % | |||||||||||||||
Gross profit on a constant currency basis (Non-GAAP) | 438,886 | 605,185 | (166,299) | (27.5) | |||||||||||||||||||
Adjusted operating expenses on a constant currency basis (Non-GAAP) | 419,287 | 506,204 | (86,917) | (17.2) | |||||||||||||||||||
Adjusted operating income on a constant currency basis (Non-GAAP) | $ | 19,599 | $ | 98,981 | $ | (79,382) | (80.2) | % | |||||||||||||||
Increase (Decrease) | |||||||||||||||||||||||
13-Week Period | |||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
Cause of change | Percentage | Dollars | |||||||||||||||||||||
Inflation | 2.8 | % | $ | 81.8 | |||||||||||||||||||
Foreign currency | 1.4 | 40.6 | |||||||||||||||||||||
Other (1)
|
(29.9) | (871.1) | |||||||||||||||||||||
Total change in sales | (25.7) | % | $ | (748.7) | |||||||||||||||||||
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. |
13-Week Period Ended Sep. 26, 2020 | 13-Week Period Ended Sep. 28, 2019 | Change in Dollars | % Change | ||||||||||||||||||||
(Dollars in thousands, except for per share data) | |||||||||||||||||||||||
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) | % | |||||||||||||||
(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, primarily consisting of changes to our business technology strategy.
|
||||
(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. |
13-Week Period Ended Sep. 26, 2020 | 13-Week Period Ended Sep. 28, 2019 | Change in Dollars | % Change | ||||||||||||||||||||
U.S. FOODSERVICE OPERATIONS | |||||||||||||||||||||||
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 | |||||||||||||||||||||||
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 | % |
(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. |
13-Week Period Ended Sep. 26, 2020 | 13-Week Period Ended Sep. 28, 2019 | ||||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities (GAAP) | $ | 930,914 | $ | 171,579 | |||||||
Additions to plant and equipment | (75,539) | (175,728) | |||||||||
Proceeds from sales of plant and equipment | 7,064 | 4,902 | |||||||||
Free Cash Flow (Non-GAAP) | $ | 862,439 | $ | 753 |
Combined Parent and Guarantor Subsidiaries Summarized Balance Sheet | Sep. 26, 2020 | Jun. 27, 2020 | ||||||||||||
(In thousands) | ||||||||||||||
ASSETS | ||||||||||||||
Receivables due from non-obligor subsidiaries | $ | 123,883 | $ | 133,195 | ||||||||||
Current assets | 8,241,522 | 8,644,084 | ||||||||||||
Total current assets | $ | 8,365,405 | $ | 8,777,279 | ||||||||||
Notes receivable from non-obligor subsidiaries | $ | 83,275 | $ | 671,500 | ||||||||||
Other noncurrent assets | 3,938,444 | 4,036,312 | ||||||||||||
Total noncurrent assets | $ | 4,021,719 | $ | 4,707,812 | ||||||||||
LIABILITIES | ||||||||||||||
Payables due to non-obligor subsidiaries | $ | 46,973 | $ | 48,923 | ||||||||||
Other current liabilities | 2,013,761 | 2,200,422 | ||||||||||||
Total current liabilities | $ | 2,060,734 | $ | 2,249,345 | ||||||||||
Notes payable to non-obligor subsidiaries | $ | 212,695 | $ | 233,158 | ||||||||||
Long-term debt | 11,994,280 | 12,478,453 | ||||||||||||
Other noncurrent liabilities | 1,292,880 | 1,356,781 | ||||||||||||
Total noncurrent liabilities | $ | 13,499,855 | $ | 14,068,392 |
Combined Parent and Guarantor Subsidiaries Summarized Results of Operations | 13-Week Period Ended Sep. 26, 2020 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Sales | $ | 7,330,291 | ||||||||||||||||||||||||
Gross profit | 1,421,395 | |||||||||||||||||||||||||
Operating income | 442,389 | |||||||||||||||||||||||||
Interest expense from non-obligor subsidiaries | 11,307 | |||||||||||||||||||||||||
Net earnings | 262,680 |
3.1 | — | |||||||
3.2 | — | |||||||
3.3 | — | |||||||
3.4 | — | |||||||
10.1# | — | |||||||
10.2# | — | |||||||
10.3†# | — | |||||||
10.4†# | — | |||||||
10.5† | — | |||||||
10.6†# | — | |||||||
10.7†# | — | |||||||
10.8 | — | |||||||
10.9 | — | |||||||
22.1 | — | |||||||
31.1# | — | |||||||
31.2# | — | |||||||
32.1# | — | |||||||
32.2# | — | |||||||
101.SCH# | — | Inline XBRL Taxonomy Extension Schema Document | ||||||
101.CAL# | — | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||||
101.DEF# | — | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||||
101.LAB# | — | Inline XBRL Taxonomy Extension Labels Linkbase Document | ||||||
101.PRE# | — | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||||
104 | — | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Sysco Corporation | ||||||||
(Registrant) | ||||||||
Date: November 3, 2020 | By: | /s/ KEVIN P. HOURICAN | ||||||
Kevin P. Hourican | ||||||||
President and Chief Executive Officer | ||||||||
Date: November 3, 2020 | By: | /s/ JOEL T. GRADE | ||||||
Joel T. Grade | ||||||||
Executive Vice President and | ||||||||
Chief Financial Officer | ||||||||
Date: November 3, 2020 | By: | /s/ ANITA A. ZIELINSKI | ||||||
Anita A. Zielinski | ||||||||
Senior Vice President and | ||||||||
Chief Accounting Officer |
1 Year Sysco Chart |
1 Month Sysco Chart |
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