Sysco FY

Sysco's diluted earnings per share for the same period were $1.47, a 7.3% increase over last year's $1.37. Net earnings increased 6.0% to $961.5 million vs. $907.2 million in last year's 53-week fiscal year. Non-comparable acquisitions represented 0.8% of sales and food cost inflation, as measured by Sysco's change in cost of goods, was 3.5%. Operating expenses as a percent to sales dropped 27 basis points to 13.85% compared to last year's 14.12%.

As for the fourth quarter, the distributorship recorded sales of $7.98 billion compared with $8.14 billion in last year's 14-week fourth quarter. On a comparable basis, fourth-quarter sales of $7.98 billion compare to last year's adjusted 13-week fourth quarter sales of $7.56 billion. Non-comparable acquisitions represented 1.0% of sales and food cost inflation, as measured by Sysco's change in cost of goods, was 1.6%. Diluted earnings per share were $0.44, or 2.3% above the $0.43 earned in last year's 14-week fourth quarter. Net earnings rose 1.5%, or $284.7 million compared with $280.6 million in last year's 14-week fourth quarter. Operating expenses as a percent to sales were 13.55%, an 11-basis point reduction in comparison to 13.66% in the same period last year.

Commenting on the year's growth, Rick Schnieders, chairman and ceo, pointed out that the company's "review process" with operator-customers contributed to sales increases.

Schnieders said Sysco's business review efforts enhance customer relationships by tailoring value-added products and services such as menu reengineering and customer loyalty programs. On a year-over-year basis, sales to those operators who have participated in business reviews increased at an average percentage rate in the mid-teens.

Schnieders said Sysco continued to invest for growth during the fourth quarter, with capital expenditures of $85.8 million during the final 13 weeks of fiscal 2005, or a total of $390.2 million during the fiscal year. The company projects capital spending to be in a range of $425 million to $450 million for fiscal year 2006.

During the fourth quarter, $16.9 million was expensed and $2.2 million was capitalized related to the National Supply Chain Project. Through the end of fiscal year 2005, the total amount expensed on the National Supply Chain Project since inception was $113 million and the total amount capitalized was $186 million.

"The National Supply Chain project, the largest strategic project in Sysco's history, continues to exceed our expectations,'' added Schnieders. "The Northeast Redistribution Center (RDC) is currently shipping to 12 of the 14 broadline operating companies in that region, with the two remaining companies scheduled to ramp up by October. Approximately 120,000 cases are currently being shipped each day from the Northeast RDC, a figure that will grow to 300,000 cases when it is operational in January of next year. We also have identified a site in Florida as the location for the second RDC and expect to make a formal announcement in the near future.''

Sysco also contributed to the fast pace of acquisitions since January by acquiring two specialty meat distributors


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