Key highlights for the fourth quarter of fiscal year 2021 included:
- Sales were stronger than expected;
- Share gains continue, driven by new customer wins;
- Sysco’s Recipe for Growth strategy advances;
- Inflation effectively managed;
- Cash flow stronger than expected, even with significant inventory investments;
- International operations show profit improvement;
Greco and Sons transaction to close imminently;- Quarterly dividend increased, maintaining Dividend Aristocrat status; and
- Currently no signs of Delta variant impacting demand; strong July sales.
“Sysco’s fourth quarter results were strong, reflecting market share gains and industry demand that has continued to rebound earlier and stronger than expected,” said
Key financial results for the fourth quarter of fiscal year 2021 included:
- Sales trends improved as markets reopened; fourth quarter sales increased 82.0% versus the same period in fiscal year 2020 and increased 4.3% versus the same period in fiscal year 2019;
- Gross profit increased 86.2% to
$2.9 billion , and gross margin increased 41 basis points to 18.1%, as compared to the same period last year; - Operating income increased 207.2% to
$569.7 million , and adjusted1 operating income increased to$605.2 million , as compared to the same period last year; - Earnings before interest, taxes, depreciation and amortization (“EBITDA”) increased to
$778.6 million , and adjusted EBITDA increased to $781.1 million, as compared to the same period last year;2
_____________________________________
1 Adjusted financial results, including adjusted operating income (loss), adjusted operating expenses, and adjusted Earnings Per Share (EPS), are non-GAAP financial measures that exclude certain items, which primarily include adjustments to our bad debt reserve specific to aged receivables existing prior to the COVID-19 pandemic, goodwill impairment charges, restructuring costs, transformational project costs and acquisition-related costs. Specific to adjusted EPS, this year’s fourth quarter and fiscal 2021 Certain Items include the impact of a gain on sale of property and the impact of a
2EBITDA and adjusted EBITDA are non-GAAP financial measures. Reconciliations of all non-GAAP financial measures to the nearest respective GAAP financial measure are included at the end of this release.
- Earnings per share (“EPS”)3 increased to
$0.29 compared to a loss per share of$1.22 in the same period last year; and adjusted1 EPS increased to$0.71 compared to a loss per share of$0.29 in the same period last year.
Key financial results for fiscal year 2021 include:
- Sales decreased 3.0% to
$51.3 billion versus fiscal year 2020 and decreased 14.7% versus fiscal year 2019; - Gross profit decreased 5.5% to
$9.4 billion , and gross margin decreased 48 basis points to 18.2%, as compared to the prior year; - Operating income increased 91.8% to
$1.4 billion , and adjusted¹ operating income decreased 14.7% to$1.5 billion , as compared to the prior year; - EBITDA increased 46.1% to
$2.2 billion , and adjusted EBITDA decreased 9.1% to$2.2 billion , as compared to the prior year;2 - EPS increased to
$1.02 compared to$0.42 in the prior year; adjusted1 EPS decreased to$1.44 compared to$2.01 in the prior year; - Cash flow from operations increased 17.6% to
$1.9 billion , and free cash flow4 increased 61.0% to$1.5 billion , as compared to the prior year; and - The company exceeded its cash flow from operations guidance and reduced debt more than planned, totaling
$3 .4 billion in debt reduction during the year.
“We’re very pleased with our financial results in the fourth quarter, including particularly strong free cash flow performance,” said
Fourth Quarter Fiscal 2021 Results
Total Sysco
Sales for the fourth quarter were
Gross profit increased 86.2% to
Operating expenses increased
Operating income was
The
Sales for the fourth quarter were
_____________________________________
3Earnings Per Share (EPS) are shown on a diluted basis unless otherwise specified.
4Free 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.
Gross profit increased 90.0% to
Operating expenses increased
Operating income was
International Foodservice Operations
The International Foodservice Operations segment experienced expected operating income improvement compared to the prior quarter and prior year.
Sales for the fourth quarter were
Gross profit increased 88.6% to
Operating expenses decreased
The International Foodservice Operations segment delivered an operating loss of
Fiscal 2021 Results
Total Sysco
Sales for fiscal 2021 were
Gross profit decreased 5.5% to
Operating expenses decreased
Operating income was
Sales for fiscal 2021 were
Gross profit decreased 3.4% to
Operating expenses decreased
Operating income was
International Foodservice Operations
Sales for fiscal 2021 were
Gross profit decreased 15.8% to
Operating expenses decreased
The International Foodservice Operations segment delivered an operating loss of
Balance Sheet, Capital Spending and Cash Flow
Capital expenditures, net of proceeds from sales of plant and equipment, for fiscal 2021 were
Cash flow from operations was
Conference Call & Webcast
Sysco will host a conference call to review the company’s fourth quarter and full fiscal 2021 financial results on
Key Highlights:
14-Week Period Ended | 53-Week Period Ended | |||||||||
Financial Comparison: | Change | Change | ||||||||
Sales | 82.0% | -3.0% | ||||||||
Gross profit | 86.2% | -5.5% | ||||||||
Gross Margin | 18.1% | 41 bps | 18.2% | -48 bps | ||||||
GAAP: | ||||||||||
Operating expenses | 11.9% | -13.5% | ||||||||
Certain Items | -92.9% | -97.6% | ||||||||
Operating Income | 207.2% | 91.8% | ||||||||
Operating Margin | 3.5% | 953 bps | 2.8% | 138 bps | ||||||
Net Earnings | 124.4% | 143.3% | ||||||||
Diluted Earnings Per Share | 123.8% | 142.9% | ||||||||
Non-GAAP (1): | ||||||||||
Operating Expenses | 44.5% | -3.6% | ||||||||
Operating Income | NM | -14.7% | ||||||||
Operating Margin | 3.8% | 413 bps | 2.8% | -39 bps | ||||||
EBITDA | NM | 46.1% | ||||||||
Adjusted EBITDA | NM | -9.1% | ||||||||
Net Earnings | NM | -28.3% | ||||||||
Diluted Earnings Per Share (2) | NM | -28.4% | ||||||||
Case Growth: | ||||||||||
71.4% | -5.8% | |||||||||
Local | 74.3% | -1.1% | ||||||||
37.7% | 75 bps | 37.6% | -87 bps | |||||||
Local | 45.3% | 26 bps | 44.6% | -212 bps |
Note:
(1) Reconciliations of all non-GAAP financial measures to the nearest respective GAAP financial measures are included at the end of this release.
(2) Individual components in the table above may not sum to the totals due to the rounding.
NM represents that the percentage change is not meaningful.
Forward-Looking Statements
Statements made in this press release or in our earnings call for the fourth 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 statements concerning: the effect, impact, potential duration or other implications of the coronavirus (“COVID-19”) pandemic and any expectations we may have with respect thereto, including the extent and duration of lockdowns in the
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
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 58,000 associates, the company operates 343 distribution facilities worldwide and serves more than 650,000 customer locations. For fiscal 2021 that ended
For more information, visit www.sysco.com or connect with Sysco on Facebook at www.facebook.com/SyscoFoods. For important news and information regarding Sysco, visit the Investor Relations section of the company’s Internet home page at investors.sysco.com, which Sysco plans to use as a primary channel for publishing key information to its investors, some of which may contain material and previously non-public information. In addition, investors should continue to review our news releases and filings with the
CONSOLIDATED RESULTS OF OPERATIONS
(In Thousands, Except for Share and Per Share Data)
Quarter Ended | Year Ended | |||||||||||||||||
Sales | $ | 16,136,893 | $ | 8,866,564 | $ | 51,297,843 | $ | 52,893,310 | ||||||||||
Cost of sales | 13,221,115 | 7,300,909 | 41,941,094 | 42,991,646 | ||||||||||||||
Gross profit | 2,915,778 | 1,565,655 | 9,356,749 | 9,901,664 | ||||||||||||||
Operating expenses | 2,346,094 | 2,097,235 | 7,919,507 | 9,152,159 | ||||||||||||||
Operating income (loss) | 569,684 | (531,580 | ) | 1,437,242 | 749,505 | |||||||||||||
Interest expense | 441,149 | 164,269 | 880,137 | 408,220 | ||||||||||||||
Other (income) expense, net | (13,483 | ) | 40,396 | (27,623 | ) | 47,901 | ||||||||||||
Earnings (loss) before income taxes | 142,018 | (736,245 | ) | 584,728 | 293,384 | |||||||||||||
Income taxes | (9,075 | ) | (117,826 | ) | 60,519 | 77,909 | ||||||||||||
Net earnings (loss) | $ | 151,093 | $ | (618,419 | ) | $ | 524,209 | $ | 215,475 | |||||||||
Net earnings (loss): | ||||||||||||||||||
Basic earnings (loss) per share | $ | 0.29 | $ | (1.22 | ) | $ | 1.03 | $ | 0.42 | |||||||||
Diluted earnings (loss) per share | 0.29 | (1.22 | ) | 1.02 | 0.42 | |||||||||||||
Average shares outstanding | 512,423,938 | 508,296,452 | 510,696,398 | 510,121,071 | ||||||||||||||
Diluted shares outstanding | 516,036,842 | 508,296,452 | 513,555,088 | 514,025,974 |
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except for Share Data)
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | 3,007,123 | $ | 6,059,427 | |||||
Accounts receivable, less allowances of | 3,781,510 | 2,893,551 | |||||||
Inventories | 3,695,219 | 3,095,085 | |||||||
Prepaid expenses and other current assets | 240,956 | 192,163 | |||||||
Income tax receivable | 8,759 | 108,006 | |||||||
Total current assets | 10,733,567 | 12,348,232 | |||||||
Plant and equipment at cost, less accumulated depreciation | 4,326,063 | 4,458,567 | |||||||
Other long-term assets | |||||||||
3,944,139 | 3,732,469 | ||||||||
Intangibles, less amortization | 746,073 | 780,172 | |||||||
Deferred income taxes | 352,523 | 194,115 | |||||||
Operating lease right-of-use assets, net | 709,163 | 603,616 | |||||||
Other assets | 602,011 | 511,095 | |||||||
Total other long-term assets | 6,353,909 | 5,821,467 | |||||||
Total assets | $ | 21,413,539 | $ | 22,628,266 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
Current liabilities | |||||||||
Notes payable | $ | 8,782 | $ | 2,266 | |||||
Accounts payable | 4,884,781 | 3,447,065 | |||||||
Accrued expenses | 1,814,837 | 1,616,289 | |||||||
Accrued income taxes | 22,644 | 2,938 | |||||||
Current operating lease liabilities | 102,659 | 107,167 | |||||||
Current maturities of long-term debt | 486,141 | 1,542,128 | |||||||
Total current liabilities | 7,319,844 | 6,717,853 | |||||||
Long-term liabilities | |||||||||
Long-term debt | 10,588,184 | 12,902,485 | |||||||
Deferred income taxes | 147,066 | 86,601 | |||||||
Long-term operating lease liabilities | 634,481 | 523,496 | |||||||
Other long-term liabilities | 1,136,480 | 1,204,953 | |||||||
Total long-term liabilities | 12,506,211 | 14,717,535 | |||||||
Commitments and contingencies | |||||||||
Noncontrolling interest | 34,588 | 34,265 | |||||||
Shareholders’ equity | |||||||||
Preferred stock, par value | — | — | |||||||
Common stock, par value | 765,175 | 765,175 | |||||||
Paid-in capital | 1,619,995 | 1,506,901 | |||||||
Retained earnings | 10,151,706 | 10,563,008 | |||||||
Accumulated other comprehensive loss | (1,148,764 | ) | (1,710,881 | ) | |||||
(9,835,216 | ) | (9,965,590 | ) | ||||||
Total shareholders’ equity | 1,552,896 | 1,158,613 | |||||||
Total liabilities and shareholders’ equity | $ | 21,413,539 | $ | 22,628,266 |
CONSOLIDATED CASH FLOWS
(In Thousands)
53-Week Period Ended | |||||||||
Cash flows from operating activities: | |||||||||
Net earnings | $ | 524,209 | $ | 215,475 | |||||
Adjustments to reconcile net earnings to cash provided by operating activities: | |||||||||
Share-based compensation expense | 95,815 | 42,234 | |||||||
Depreciation and amortization | 737,916 | 805,765 | |||||||
Operating lease asset amortization | 113,906 | 108,376 | |||||||
Amortization of debt issuance and other debt-related costs | 26,115 | 22,663 | |||||||
Deferred income taxes | (157,864 | ) | (191,317 | ) | |||||
Provision for losses on receivables | (152,740 | ) | 404,158 | ||||||
Loss on extinguishment of debt | 293,897 | — | |||||||
Loss on sale of businesses | 22,737 | — | |||||||
— | 203,206 | ||||||||
Impairment of assets held for sale | — | 55,942 | |||||||
Other non-cash items | (16,502 | ) | (525 | ) | |||||
Additional changes in certain assets and liabilities, net of effect of businesses acquired: | |||||||||
(Increase) decrease in receivables | (662,345 | ) | 915,717 | ||||||
(Increase) decrease in inventories | (551,405 | ) | 114,563 | ||||||
(Increase) decrease in prepaid expenses and other current assets | (32,577 | ) | 9,835 | ||||||
Increase (decrease) in accounts payable | 1,459,222 | (834,118 | ) | ||||||
Increase (decrease) in accrued expenses | 167,181 | (139,891 | ) | ||||||
Decrease in operating lease liabilities | (142,351 | ) | (124,040 | ) | |||||
Increase (decrease) in accrued income taxes | 118,953 | (102,678 | ) | ||||||
Decrease in other assets | 18,822 | 20,666 | |||||||
Increase in other long-term liabilities | 40,853 | 92,649 | |||||||
Net cash provided by operating activities | 1,903,842 | 1,618,680 | |||||||
Cash flows from investing activities: | |||||||||
Additions to plant and equipment | (470,676 | ) | (720,423 | ) | |||||
Proceeds from sales of plant and equipment | 59,147 | 28,717 | |||||||
Acquisition of businesses, net of cash acquired | — | (142,780 | ) | ||||||
Purchase of marketable securities | (53,148 | ) | (11,424 | ) | |||||
Proceeds from sales of marketable securities | 35,979 | 20,532 | |||||||
Other investing activities | — | 69,071 | |||||||
Net cash used for investing activities | (428,698 | ) | (756,307 | ) | |||||
Cash flows from financing activities: | |||||||||
Bank and commercial paper (repayments) borrowings, net | (826,182 | ) | 616,657 | ||||||
Other debt borrowings | 1,484 | 6,783,562 | |||||||
Other debt repayments | (2,003,135 | ) | (1,119,232 | ) | |||||
Tender and redemption premiums for senior notes | (999,996 | ) | — | ||||||
Proceeds from stock option exercises | 130,374 | 227,602 | |||||||
Stock repurchases | — | (844,699 | ) | ||||||
Dividends paid | (917,564 | ) | (856,312 | ) | |||||
Other financing activities (1) | (13,209 | ) | (87,778 | ) | |||||
Net cash (used for) provided by financing activities | (4,628,228 | ) | 4,719,800 | ||||||
Effect of exchange rates on cash, cash equivalents and restricted cash | 94,614 | (18,848 | ) | ||||||
Net (decrease) increase in cash and cash equivalents (2) | (3,058,470 | ) | 5,563,325 | ||||||
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) | $ | 3,037,100 | $ | 6,095,570 | |||||
Supplemental disclosures of cash flow information: | |||||||||
Cash paid during the period for: | |||||||||
Interest | $ | 877,512 | $ | 325,308 | |||||
Income taxes, net of refunds | 103,547 | 376,609 |
(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.
Non-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, and by acquisition-related costs consisting of: (1) intangible amortization expense related to the fiscal 2017 acquisition of
Fiscal 2020 results of operations were also negatively impacted by costs arising from the COVID-19 pandemic, the most significant of which were (1) excess bad debt expense, as we experienced an increase in past due receivables and recognized additional bad debt charges; (2) goodwill and intangibles impairment charges; and (3) fixed asset impairment charges. While Sysco traditionally incurs bad debt expense, the magnitude of such expenses and benefits that we have experienced since the onset of the COVID-19 pandemic 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
Management believes that adjusting its operating expenses, operating income, interest expense, other (income) expense, net, 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 and (2) facilitates comparisons on a year-over-year basis.
Although Sysco has a history of growth through acquisitions, the
Set forth below is a reconciliation of sales, operating expenses, operating income, interest expense, other (income) expense net earnings and diluted earnings per share to adjusted results for these measures for the periods presented. Individual components of diluted earnings per share may not 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.
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
(Dollars in Thousands, Except for Share and Per Share Data)
14-Week Period Ended | 13-Week Period Ended | Change in Dollars | % Change | |||||||||||||||
Sales (GAAP) | $ | 16,136,893 | $ | 8,866,564 | $ | 7,270,329 | 82.0 | % | ||||||||||
Impact of currency fluctuations (1) | (253,081 | ) | — | (253,081 | ) | (2.9 | ) | |||||||||||
Comparable sales using a constant currency basis (Non-GAAP) | $ | 15,883,812 | $ | 8,866,564 | $ | 7,017,248 | 79.1 | % | ||||||||||
Gross profit (GAAP) | $ | 2,915,778 | $ | 1,565,655 | $ | 1,350,123 | 86.2 | % | ||||||||||
Impact of currency fluctuations (1) | (49,675 | ) | — | (49,675 | ) | (3.2 | ) | |||||||||||
Comparable gross profit using a constant currency basis (Non-GAAP) | $ | 2,866,103 | $ | 1,565,655 | $ | 1,300,448 | 83.1 | % | ||||||||||
Gross margin (GAAP) | 18.07 | % | 17.66 | % | 41 bps | |||||||||||||
Impact of currency fluctuations (1) | (0.02 | ) | — | -2 bps | ||||||||||||||
Comparable Gross margin using a constant currency basis (Non-GAAP) | 18.04 | % | 17.66 | % | 39 bps | |||||||||||||
Operating expenses (GAAP) | $ | 2,346,094 | $ | 2,097,235 | $ | 248,859 | 11.9 | % | ||||||||||
Impact of restructuring and transformational project costs (2) | (33,110 | ) | (180,066 | ) | 146,956 | 81.6 | ||||||||||||
Impact of acquisition-related costs (3) | (24,826 | ) | (13,251 | ) | (11,575 | ) | (87.4 | ) | ||||||||||
Impact of bad debt reserve adjustments (4) | 22,441 | (169,903 | ) | 192,344 | 113.2 | |||||||||||||
Impact of goodwill impairment | — | (134,481 | ) | 134,481 | NM | |||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | 2,310,599 | 1,599,534 | 711,065 | 44.5 | ||||||||||||||
Impact of currency fluctuations (1) | (47,200 | ) | — | (47,200 | ) | (3.0 | ) | |||||||||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 2,263,399 | $ | 1,599,534 | $ | 663,865 | 41.5 | % | ||||||||||
Operating income (loss) (GAAP) | $ | 569,684 | $ | (531,580 | ) | $ | 1,101,264 | 207.2 | % | |||||||||
Impact of restructuring and transformational project costs (2) | 33,110 | 180,066 | (146,956 | ) | (81.6 | ) | ||||||||||||
Impact of acquisition-related costs (3) | 24,826 | 13,251 | 11,575 | 87.4 | ||||||||||||||
Impact of bad debt reserve adjustments (4) | (22,441 | ) | 169,903 | (192,344 | ) | (113.2 | ) | |||||||||||
Impact of goodwill impairment | — | 134,481 | (134,481 | ) | NM | |||||||||||||
Operating income (loss) adjusted for Certain Items (Non-GAAP) | 605,179 | (33,879 | ) | 639,058 | NM | |||||||||||||
Impact of currency fluctuations (1) | (2,475 | ) | — | (2,475 | ) | (7.3 | ) | |||||||||||
Comparable operating income (loss) adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 602,704 | $ | (33,879 | ) | $ | 636,583 | NM | ||||||||||
Interest expense (GAAP) | $ | 441,149 | $ | 164,269 | $ | 276,880 | 168.6 | % | ||||||||||
Impact of loss on extinguishment of debt | (293,897 | ) | — | (293,897 | ) | NM | ||||||||||||
Interest expense adjusted for Certain Items (Non-GAAP) | $ | 147,252 | $ | 164,269 | $ | (17,017 | ) | (10.4 | ) | % | ||||||||
Other (income) expense (GAAP) | $ | (13,483 | ) | $ | 40,396 | $ | (53,879 | ) | 133.4 | % | ||||||||
Impact of other non-routine gains and losses (5) | 12,374 | (46,968 | ) | 59,342 | 126.3 | |||||||||||||
Other income adjusted for Certain Items (Non-GAAP) | $ | (1,109 | ) | $ | (6,572 | ) | $ | 5,463 | (83.1 | ) | % | |||||||
Net earnings (loss) (GAAP) | $ | 151,093 | $ | (618,419 | ) | $ | 769,512 | 124.4 | % | |||||||||
Impact of restructuring and transformational project costs (2) | 33,110 | 180,066 | (146,956 | ) | (81.6 | ) | ||||||||||||
Impact of acquisition-related costs (3) | 24,826 | 13,251 | 11,575 | 87.4 | ||||||||||||||
Impact of bad debt reserve adjustments (4) | (22,441 | ) | 169,903 | (192,344 | ) | (113.2 | ) | |||||||||||
Impact of goodwill impairment | — | 134,481 | (134,481 | ) | NM | |||||||||||||
Impact of loss on extinguishment of debt | 293,897 | — | 293,897 | NM | ||||||||||||||
Impact of other non-routine gains and losses (5) | (12,374 | ) | 46,968 | (59,342 | ) | (126.3 | ) | |||||||||||
Tax impact of restructuring and transformational project costs (6) | (5,530 | ) | (32,926 | ) | 27,396 | 83.2 | ||||||||||||
Tax impact of acquisition-related costs (6) | (4,204 | ) | 1,943 | (6,147 | ) | NM | ||||||||||||
Tax impact of bad debt reserves adjustments (6) | 347 | (30,454 | ) | 30,801 | 101.1 | |||||||||||||
Tax impact of loss on extinguishment of debt (6) | (79,323 | ) | — | (79,323 | ) | NM | ||||||||||||
Tax impact of other non-routine gains and losses (6) | 4,557 | (12,644 | ) | 17,201 | 136.0 | |||||||||||||
Impact of foreign tax rate change (7) | (17,649 | ) | — | (17,649 | ) | NM | ||||||||||||
Net earnings (loss) adjusted for Certain Items (Non-GAAP) | $ | 366,309 | $ | (147,831 | ) | $ | 514,140 | NM | ||||||||||
Diluted earnings (loss) per share (GAAP) | $ | 0.29 | $ | (1.22 | ) | $ | 1.51 | 123.8 | % | |||||||||
Impact of restructuring and transformational project costs (2) | 0.06 | 0.35 | (0.29 | ) | (82.9 | ) | ||||||||||||
Impact of acquisition-related costs (3) | 0.05 | 0.03 | 0.02 | 66.7 | ||||||||||||||
Impact of bad debt reserve adjustments (4) | (0.04 | ) | 0.33 | (0.37 | ) | (112.1 | ) | |||||||||||
Impact of goodwill impairment | — | 0.26 | (0.26 | ) | NM | |||||||||||||
Impact of loss on extinguishment of debt | 0.57 | — | 0.57 | NM | ||||||||||||||
Impact of other non-routine gains and losses (5) | (0.02 | ) | 0.09 | (0.11 | ) | (122.2 | ) | |||||||||||
Tax impact of restructuring and transformational project costs (6) | (0.01 | ) | (0.06 | ) | 0.05 | 83.3 | ||||||||||||
Tax impact of acquisition-related costs (6) | (0.01 | ) | — | (0.01 | ) | NM | ||||||||||||
Tax impact of bad debt reserves adjustments (6) | — | (0.06 | ) | 0.06 | NM | |||||||||||||
Tax impact of loss on extinguishment of debt (6) | (0.15 | ) | — | (0.15 | ) | NM | ||||||||||||
Tax impact of non-routine gains and losses (6) | 0.01 | (0.02 | ) | 0.03 | 150.0 | |||||||||||||
Impact of foreign tax rate change (7) | (0.03 | ) | — | (0.03 | ) | NM | ||||||||||||
Diluted earnings (loss) per share adjusted for Certain Items (Non-GAAP) (8) | $ | 0.71 | $ | (0.29 | ) | $ | 1.00 | NM | ||||||||||
Diluted shares outstanding | 516,036,842 | 508,296,452 |
(1) | Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. |
(2) | Fiscal 2021 includes |
(3) | Fiscal 2021 represents |
(4) | Fiscal 2021 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020. Fiscal 2020 represents excess bad debt charges recognized on the increase in past due receivables arising from the COVID-19 pandemic. |
(5) | Fiscal 2021 includes |
(6) | The tax impact of adjustments for Certain Items is calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred. |
(7) | Fiscal 2021 represents a net benefit from remeasuring Sysco’s accrued income taxes, deferred tax asset and deferred tax liabilities due to changes in tax rates in the |
(8) | Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding. |
NM represents that the percentage change is not meaningful. |
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
(Dollars in Thousands, Except for Share and Per Share Data)
53-Week Period Ended | 52-Week Period Ended | Change in Dollars | % Change | |||||||||||||||
Sales (GAAP) | $ | 51,297,843 | $ | 52,893,310 | $ | (1,595,467 | ) | (3.0 | ) | % | ||||||||
Impact of currency fluctuations (1) | (454,004 | ) | — | (454,004 | ) | (0.9 | ) | |||||||||||
Comparable sales using a constant currency basis (Non-GAAP) | $ | 50,843,839 | $ | 52,893,310 | $ | (2,049,471 | ) | (3.9 | ) | % | ||||||||
Gross profit (GAAP) | $ | 9,356,749 | $ | 9,901,664 | $ | (544,915 | ) | (5.5 | ) | % | ||||||||
Impact of currency fluctuations (1) | (94,664 | ) | — | (94,664 | ) | (1.0 | ) | |||||||||||
Comparable gross profit using a constant currency basis (Non-GAAP) | $ | 9,262,085 | $ | 9,901,664 | $ | (639,579 | ) | (6.5 | ) | % | ||||||||
Gross margin (GAAP) | 18.24 | % | 18.72 | % | -48 bps | |||||||||||||
Impact of currency fluctuations (1) | (0.03 | ) | — | -3 bps | ||||||||||||||
Comparable Gross margin using a constant currency basis (Non-GAAP) | 18.22 | % | 18.72 | % | -50 bps | |||||||||||||
Operating expenses (GAAP) | $ | 7,919,507 | $ | 9,152,159 | $ | (1,232,652 | ) | (13.5 | ) | % | ||||||||
Impact of restructuring and transformational project costs (2) | (128,187 | ) | (371,088 | ) | 242,901 | 65.5 | ||||||||||||
Impact of acquisition-related costs (3) | (79,540 | ) | (64,793 | ) | (14,747 | ) | (22.8 | ) | ||||||||||
Impact of bad debt reserve adjustments (4) | 184,813 | (323,403 | ) | 508,216 | 157.1 | |||||||||||||
Impact of goodwill impairment | — | (203,206 | ) | 203,206 | NM | |||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | 7,896,593 | 8,189,669 | (293,076 | ) | (3.6 | ) | ||||||||||||
Impact of currency fluctuations (1) | (104,438 | ) | — | (104,438 | ) | (1.3 | ) | |||||||||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 7,792,155 | $ | 8,189,669 | $ | (397,514 | ) | (4.9 | ) | % | ||||||||
Operating income (GAAP) | $ | 1,437,242 | $ | 749,505 | $ | 687,737 | 91.8 | % | ||||||||||
Impact of restructuring and transformational project costs (2) | 128,187 | 371,088 | (242,901 | ) | (65.5 | ) | ||||||||||||
Impact of acquisition-related costs (3) | 79,540 | 64,793 | 14,747 | 22.8 | ||||||||||||||
Impact of bad debt reserve adjustments (4) | (184,813 | ) | 323,403 | (508,216 | ) | (157.1 | ) | |||||||||||
Impact of goodwill impairment | — | 203,206 | (203,206 | ) | NM | |||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | 1,460,156 | 1,711,995 | (251,839 | ) | (14.7 | ) | ||||||||||||
Impact of currency fluctuations (1) | 9,774 | — | 9,774 | (0.6 | ) | |||||||||||||
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 1,469,930 | $ | 1,711,995 | $ | (242,065 | ) | (14.1 | ) | % | ||||||||
Interest expense (GAAP) | $ | 880,137 | $ | 408,220 | $ | 471,917 | 115.6 | % | ||||||||||
Impact of loss on extinguishment of debt | (293,897 | ) | — | (293,897 | ) | NM | ||||||||||||
Interest expense adjusted for Certain Items (Non-GAAP) | $ | 586,240 | $ | 408,220 | $ | 178,020 | 43.6 | % | ||||||||||
Other (income) expense (GAAP) | $ | (27,623 | ) | $ | 47,901 | $ | (75,524 | ) | 157.7 | % | ||||||||
Impact of other non-routine gains and losses (5) | (10,460 | ) | (46,968 | ) | 36,508 | (77.7 | ) | |||||||||||
Other (income) expense adjusted for Certain Items (Non-GAAP) | $ | (38,083 | ) | $ | 933 | $ | (39,016 | ) | NM | |||||||||
Net earnings (GAAP) | $ | 524,209 | $ | 215,475 | $ | 308,734 | 143.3 | % | ||||||||||
Impact of restructuring and transformational project costs (2) | 128,187 | 371,088 | (242,901 | ) | (65.5 | ) | ||||||||||||
Impact of acquisition-related costs (3) | 79,540 | 64,793 | 14,747 | 22.8 | ||||||||||||||
Impact of bad debt reserve adjustments (4) | (184,813 | ) | 323,403 | (508,216 | ) | (157.1 | ) | |||||||||||
Impact of goodwill impairment | — | 203,206 | (203,206 | ) | NM | |||||||||||||
Impact of loss on extinguishment of debt | 293,897 | — | 293,897 | NM | ||||||||||||||
Impact of other non-routine gains and losses (5) | 10,460 | 46,968 | (36,508 | ) | (77.7 | ) | ||||||||||||
Tax impact of restructuring and transformational project costs (6) | (32,416 | ) | (90,683 | ) | 58,267 | 64.3 | ||||||||||||
Tax impact of acquisition-related costs (6) | (19,675 | ) | (13,641 | ) | (6,034 | ) | (44.2 | ) | ||||||||||
Tax impact of bad debt reserves adjustments (6) | 46,260 | (76,864 | ) | 123,124 | 160.2 | |||||||||||||
Tax impact of loss on extinguishment of debt (6) | (79,323 | ) | — | (79,323 | ) | NM | ||||||||||||
Tax impact of other non-routine gains and losses (6) | (2,692 | ) | (12,644 | ) | 9,952 | 78.7 | ||||||||||||
Impact of foreign tax rate change (7) | (23,197 | ) | 924 | (24,121 | ) | NM | ||||||||||||
Net earnings adjusted for Certain Items (Non-GAAP) | $ | 740,437 | $ | 1,032,025 | $ | (291,588 | ) | (28.3 | ) | % | ||||||||
Diluted earnings per share (GAAP) | $ | 1.02 | $ | 0.42 | $ | 0.60 | 142.9 | % | ||||||||||
Impact of restructuring and transformational project costs (2) | 0.25 | 0.72 | (0.47 | ) | (65.3 | ) | ||||||||||||
Impact of acquisition-related costs (3) | 0.15 | 0.13 | 0.02 | 15.4 | ||||||||||||||
Impact of bad debt reserve adjustments (4) | (0.36 | ) | 0.63 | (0.99 | ) | (157.1 | ) | |||||||||||
Impact of goodwill impairment | — | 0.40 | (0.40 | ) | NM | |||||||||||||
Impact of loss on extinguishment of debt | 0.57 | — | 0.57 | NM | ||||||||||||||
Impact of other non-routine gains and losses (5) | 0.02 | 0.09 | (0.07 | ) | (77.8 | ) | ||||||||||||
Tax impact of restructuring and transformational project costs (6) | (0.06 | ) | (0.18 | ) | 0.12 | 66.7 | ||||||||||||
Tax impact of acquisition-related costs (6) | (0.04 | ) | (0.03 | ) | (0.01 | ) | (33.3 | ) | ||||||||||
Tax impact of bad debt reserves adjustments (6) | 0.09 | (0.15 | ) | 0.24 | 160.0 | |||||||||||||
Tax impact of loss on extinguishment of debt (6) | (0.15 | ) | — | (0.15 | ) | — | ||||||||||||
Tax impact of non-routine gains and losses (6) | (0.01 | ) | (0.02 | ) | 0.01 | 50.0 | ||||||||||||
Impact of foreign tax rate change (7) | (0.05 | ) | — | (0.05 | ) | NM | ||||||||||||
Diluted earnings per share adjusted for Certain Items (Non-GAAP) (8) | $ | 1.44 | $ | 2.01 | $ | (0.57 | ) | (28.4 | ) | % | ||||||||
Diluted shares outstanding | 513,555,088 | 514,025,974 |
(1) | Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. | |
(2) | Fiscal 2021 includes | |
(3) | Fiscal 2021 represents | |
(4) | Fiscal 2021 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020. Fiscal 2020 represents excess bad debt charges recognized on the increase in past due receivables arising from the COVID-19 pandemic. | |
(5) | Fiscal 2021 includes | |
(6) | The tax impact of adjustments for Certain Items is calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred. | |
(7) | Fiscal 2021 represents a net benefit from remeasuring Sysco’s accrued income taxes, deferred tax asset and deferred tax liabilities due to changes in tax rates in the | |
(8) | Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding. | |
NM represents that the percentage change is not meaningful. |
Segment Results
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Applicable Segments
(Dollars in Thousands)
14-Week Period Ended | 13-Week Period Ended | Change in Dollars | %/bps Change | |||||||||||||||
Sales (GAAP) | $ | 11,518,926 | $ | 6,114,931 | $ | 5,403,995 | 88.4 | % | ||||||||||
Gross Profit (GAAP) | 2,214,821 | 1,165,551 | 1,049,270 | 90.0 | % | |||||||||||||
Gross Margin (GAAP) | 19.23 | % | 19.06 | % | 17 bps | |||||||||||||
Operating expenses (GAAP) | $ | 1,377,419 | $ | 1,124,986 | $ | 252,433 | 22.4 | % | ||||||||||
Impact of restructuring and transformational project costs | (46 | ) | (938 | ) | 892 | 95.1 | ||||||||||||
Impact of bad debt reserve adjustments (1) | 19,811 | (123,424 | ) | 143,235 | 116.1 | |||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 1,397,184 | $ | 1,000,624 | $ | 396,560 | 39.6 | % | ||||||||||
Operating income (GAAP) | $ | 837,402 | $ | 40,565 | $ | 796,837 | NM | |||||||||||
Impact of restructuring and transformational project costs | 46 | 938 | (892 | ) | (95.1 | ) | ||||||||||||
Impact of bad debt reserve adjustments (1) | (19,811 | ) | 123,424 | (143,235 | ) | (116.1 | ) | |||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | $ | 817,637 | $ | 164,927 | $ | 652,710 | NM | |||||||||||
INTERNATIONAL FOODSERVICE OPERATIONS | ||||||||||||||||||
Sales (GAAP) | $ | 2,496,030 | $ | 1,361,109 | $ | 1,134,921 | 83.4 | % | ||||||||||
Impact of currency fluctuations (2) | (247,000 | ) | — | (247,000 | ) | (18.1 | ) | |||||||||||
Comparable sales using a constant currency basis (Non-GAAP) | $ | 2,249,030 | $ | 1,361,109 | $ | 887,921 | 65.2 | % | ||||||||||
Gross Profit (GAAP) | $ | 496,010 | $ | 263,037 | $ | 232,973 | 88.6 | % | ||||||||||
Impact of currency fluctuations (2) | (47,813 | ) | — | (47,813 | ) | (18.2 | ) | |||||||||||
Comparable gross profit using a constant currency basis (Non-GAAP) | $ | 448,197 | $ | 263,037 | $ | 185,160 | 70.4 | % | ||||||||||
Gross Margin (GAAP) | 19.87 | % | 19.33 | % | 54 bps | |||||||||||||
Impact of currency fluctuations (2) | (0.06 | ) | — | -6 bps | ||||||||||||||
Comparable gross margin using a constant currency basis (Non-GAAP) | 19.93 | % | 19.33 | % | 60 bps | |||||||||||||
Operating expenses (GAAP) | $ | 526,440 | $ | 640,339 | $ | (113,899 | ) | (17.8 | ) | % | ||||||||
Impact of restructuring and transformational project costs (3) | (14,115 | ) | (117,597 | ) | 103,482 | 88.0 | ||||||||||||
Impact of acquisition-related costs (4) | (18,959 | ) | (13,251 | ) | (5,708 | ) | (43.1 | ) | ||||||||||
Impact of bad debt reserve adjustments (1) | 2,631 | (42,002 | ) | 44,633 | 106.3 | |||||||||||||
Impact of goodwill impairment | — | (134,481 | ) | 134,481 | NM | |||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | 495,997 | 333,008 | 162,989 | 48.9 | ||||||||||||||
Impact of currency fluctuations (2) | (44,683 | ) | — | (44,683 | ) | (13.4 | ) | |||||||||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 451,314 | $ | 333,008 | $ | 118,306 | 35.5 | % | ||||||||||
Operating loss (GAAP) | $ | (30,430 | ) | $ | (377,302 | ) | $ | 346,872 | 91.9 | % | ||||||||
Impact of restructuring and transformational project costs (3) | 14,115 | 117,597 | (103,482 | ) | (88.0 | ) | ||||||||||||
Impact of acquisition-related costs (4) | 18,959 | 13,251 | 5,708 | 43.1 | ||||||||||||||
Impact of bad debt reserve adjustments (1) | (2,631 | ) | 42,002 | (44,633 | ) | (106.3 | ) | |||||||||||
Impact of goodwill impairment | — | 134,481 | (134,481 | ) | NM | |||||||||||||
Operating income (loss) adjusted for Certain Items (Non-GAAP) | 13 | (69,971 | ) | 69,984 | 100.0 | |||||||||||||
Impact of currency fluctuations (2) | (3,131 | ) | — | (3,131 | ) | (4.5 | ) | |||||||||||
Comparable operating loss adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | (3,118 | ) | $ | (69,971 | ) | $ | 66,853 | 95.5 | % | ||||||||
SYGMA | ||||||||||||||||||
Sales (GAAP) | $ | 1,873,357 | $ | 1,288,928 | $ | 584,429 | 45.3 | % | ||||||||||
Gross Profit (GAAP) | 159,696 | 114,446 | 45,250 | 39.5 | % | |||||||||||||
Gross Margin (GAAP) | 8.52 | % | 8.88 | % | -35 bps | |||||||||||||
Operating expenses (GAAP) | $ | 142,999 | $ | 105,298 | $ | 37,701 | 35.8 | % | ||||||||||
Impact of restructuring and transformational project costs | — | (2,131 | ) | 2,131 | NM | |||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 142,999 | $ | 103,167 | $ | 39,832 | 38.6 | % | ||||||||||
Operating income (GAAP) | $ | 16,697 | $ | 9,148 | $ | 7,549 | 82.5 | % | ||||||||||
Impact of restructuring and transformational project costs | — | 2,131 | (2,131 | ) | NM | |||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | $ | 16,697 | $ | 11,279 | $ | 5,418 | 48.0 | % | ||||||||||
OTHER | ||||||||||||||||||
Sales (GAAP) | $ | 248,580 | $ | 101,596 | $ | 146,984 | 144.7 | % | ||||||||||
Gross Profit (GAAP) | 46,286 | 24,636 | 21,650 | 87.9 | % | |||||||||||||
Gross Margin (GAAP) | 18.62 | % | 24.25 | % | -563 bps | |||||||||||||
Operating expenses (GAAP) | $ | 51,543 | $ | 46,483 | $ | 5,060 | 10.9 | % | ||||||||||
Impact of restructuring and transformational project costs | (956 | ) | — | (956 | ) | NM | ||||||||||||
Impact of bad debt reserve adjustments (1) | (1 | ) | (4,477 | ) | 4,476 | 100.0 | ||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 50,586 | $ | 42,006 | $ | 8,580 | 20.4 | % | ||||||||||
Operating loss (GAAP) | $ | (5,257 | ) | $ | (21,847 | ) | $ | 16,590 | 75.9 | % | ||||||||
Impact of restructuring and transformational project costs | 956 | — | 956 | NM | ||||||||||||||
Impact of bad debt reserve adjustments (1) | 1 | 4,477 | (4,476 | ) | (100.0 | ) | ||||||||||||
Operating loss adjusted for Certain Items (Non-GAAP) | $ | (4,300 | ) | $ | (17,370 | ) | $ | 13,070 | 75.2 | % | ||||||||
CORPORATE | ||||||||||||||||||
Gross Profit (GAAP) | $ | (1,035 | ) | $ | (2,015 | ) | $ | 980 | 48.6 | % | ||||||||
Operating expenses (GAAP) | $ | 247,693 | $ | 180,129 | $ | 67,564 | 37.5 | % | ||||||||||
Impact of restructuring and transformational project costs (5) | (17,993 | ) | (59,400 | ) | 41,407 | 69.7 | ||||||||||||
Impact of acquisition-related costs (6) | (5,867 | ) | — | (5,867 | ) | NM | ||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 223,833 | $ | 120,729 | $ | 103,104 | 85.4 | % | ||||||||||
Operating loss (GAAP) | $ | (248,728 | ) | $ | (182,144 | ) | $ | (66,584 | ) | (36.6 | ) | % | ||||||
Impact of restructuring and transformational project costs (5) | 17,993 | 59,400 | (41,407 | ) | (69.7 | ) | ||||||||||||
Impact of acquisition-related costs (6) | 5,867 | — | 5,867 | NM | ||||||||||||||
Operating loss adjusted for Certain Items (Non-GAAP) | $ | (224,868 | ) | $ | (122,744 | ) | $ | (102,124 | ) | (83.2 | ) | % | ||||||
TOTAL SYSCO | ||||||||||||||||||
Sales (GAAP) | $ | 16,136,893 | $ | 8,866,564 | $ | 7,270,329 | 82.0 | % | ||||||||||
Gross Profit (GAAP) | 2,915,778 | 1,565,655 | 1,350,123 | 86.2 | % | |||||||||||||
Gross Margin (GAAP) | 18.07 | % | 17.66 | % | 41 bps | |||||||||||||
Operating expenses (GAAP) | $ | 2,346,094 | $ | 2,097,235 | $ | 248,859 | 11.9 | % | ||||||||||
Impact of restructuring and transformational project costs (3) (5) | (33,110 | ) | (180,066 | ) | 146,956 | 81.6 | ||||||||||||
Impact of acquisition-related costs (4) (6) | (24,826 | ) | (13,251 | ) | (11,575 | ) | (87.4 | ) | ||||||||||
Impact of bad debt reserve adjustments (1) | 22,441 | (169,903 | ) | 192,344 | 113.2 | |||||||||||||
Impact of goodwill impairment | — | (134,481 | ) | 134,481 | NM | |||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 2,310,599 | $ | 1,599,534 | $ | 711,065 | 44.5 | % | ||||||||||
Operating income (loss) (GAAP) | $ | 569,684 | $ | (531,580 | ) | $ | 1,101,264 | 207.2 | % | |||||||||
Impact of restructuring and transformational project costs (3) (5) | 33,110 | 180,066 | (146,956 | ) | (81.6 | ) | ||||||||||||
Impact of acquisition-related costs (4) (6) | 24,826 | 13,251 | 11,575 | 87.4 | ||||||||||||||
Impact of bad debt reserve adjustments (1) | (22,441 | ) | 169,903 | (192,344 | ) | (113.2 | ) | |||||||||||
Impact of goodwill impairment | — | 134,481 | (134,481 | ) | NM | |||||||||||||
Operating income (loss) adjusted for Certain Items (Non-GAAP) | $ | 605,179 | $ | (33,879 | ) | $ | 639,058 | NM |
(1) | Fiscal 2021 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020. Fiscal 2020 represents excess bad debt charges recognized on the increase in past due receivables arising from the COVID-19 pandemic. |
(2) | Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. |
(3) | Includes restructuring, severance and facility closure costs primarily in |
(4) | Represents intangible amortization expense from the Brakes Acquisition. |
(5) | Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy. |
(6) | Represents due diligence and integration costs related to |
NM represents that the percentage change is not meaningful. |
Segment Results
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Applicable Segments
(Dollars in Thousands)
53-Week Period Ended | 52-Week Period Ended | Change in Dollars | %/bps Change | |||||||||||||||
Sales (GAAP) | $ | 35,724,843 | $ | 36,774,146 | $ | (1,049,303 | ) | (2.9 | ) | % | ||||||||
Gross Profit (GAAP) | 7,008,687 | 7,254,722 | (246,035 | ) | (3.4 | ) | % | |||||||||||
Gross Margin (GAAP) | 19.62 | % | 19.73 | % | -11 bps | |||||||||||||
Operating expenses (GAAP) | $ | 4,552,123 | $ | 5,251,563 | $ | (699,440 | ) | (13.3 | ) | % | ||||||||
Impact of restructuring and transformational project costs | (4,056 | ) | (10,145 | ) | 6,089 | 60.0 | ||||||||||||
Impact of bad debt reserve adjustments (1) | 143,036 | (230,654 | ) | 373,690 | 162.0 | |||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 4,691,103 | $ | 5,010,764 | $ | (319,661 | ) | (6.4 | ) | % | ||||||||
Operating income (GAAP) | $ | 2,456,564 | $ | 2,003,159 | $ | 453,405 | 22.6 | % | ||||||||||
Impact of restructuring and transformational project costs | 4,056 | 10,145 | (6,089 | ) | (60.0 | ) | ||||||||||||
Impact of bad debt reserve adjustments (1) | (143,036 | ) | 230,654 | (373,690 | ) | (162.0 | ) | |||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | $ | 2,317,584 | $ | 2,243,958 | $ | 73,626 | 3.3 | % | ||||||||||
INTERNATIONAL FOODSERVICE OPERATIONS | ||||||||||||||||||
Sales (GAAP) | $ | 8,350,638 | $ | 9,672,190 | $ | (1,321,552 | ) | (13.7 | ) | % | ||||||||
Impact of currency fluctuations (2) | (444,380 | ) | — | (444,380 | ) | (4.6 | ) | |||||||||||
Comparable sales using a constant currency basis (Non-GAAP) | $ | 7,906,258 | $ | 9,672,190 | $ | (1,765,932 | ) | (18.3 | ) | % | ||||||||
Gross Profit (GAAP) | $ | 1,645,448 | $ | 1,955,190 | $ | (309,742 | ) | (15.8 | ) | % | ||||||||
Impact of currency fluctuations (2) | (91,444 | ) | — | (91,444 | ) | (4.7 | ) | |||||||||||
Comparable gross profit using a constant currency basis (Non-GAAP) | $ | 1,554,004 | $ | 1,955,190 | $ | (401,186 | ) | (20.5 | ) | % | ||||||||
Gross Margin (GAAP) | 19.70 | % | 20.21 | % | -51 bps | |||||||||||||
Impact of currency fluctuations (2) | 0.05 | — | -5 bps | |||||||||||||||
Comparable gross margin using a constant currency basis (Non-GAAP) | 19.66 | % | 20.21 | % | -56 bps | |||||||||||||
Operating expenses (GAAP) | $ | 1,877,851 | $ | 2,326,597 | $ | (448,746 | ) | (19.3 | ) | % | ||||||||
Impact of restructuring and transformational project costs (3) | (66,147 | ) | (191,900 | ) | 125,753 | 65.5 | ||||||||||||
Impact of acquisition-related costs (4) | (73,673 | ) | (64,793 | ) | (8,880 | ) | (13.7 | ) | ||||||||||
Impact of bad debt reserve adjustments (1) | 36,214 | (88,271 | ) | 124,485 | 141.0 | |||||||||||||
Impact of goodwill impairment | — | (134,481 | ) | ` | 134,481 | NM | ||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | 1,774,245 | 1,847,152 | (72,907 | ) | (3.9 | ) | ||||||||||||
Impact of currency fluctuations (2) | (100,945 | ) | — | (100,945 | ) | (5.5 | ) | |||||||||||
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | 1,673,300 | $ | 1,847,152 | $ | (173,852 | ) | (9.4 | ) | % | ||||||||
Operating loss (GAAP) | $ | (232,403 | ) | $ | (371,407 | ) | $ | 139,004 | 37.4 | % | ||||||||
Impact of restructuring and transformational project costs (3) | 66,147 | 191,900 | (125,753 | ) | (65.5 | ) | ||||||||||||
Impact of acquisition-related costs (4) | 73,673 | 64,793 | 8,880 | 13.7 | ||||||||||||||
Impact of bad debt reserve adjustments (1) | (36,214 | ) | 88,271 | (124,485 | ) | (141.0 | ) | |||||||||||
Impact of goodwill impairment | — | 134,481 | (134,481 | ) | NM | |||||||||||||
Operating (loss) income adjusted for Certain Items (Non-GAAP) | (128,797 | ) | 108,038 | (236,835 | ) | (219.2 | ) | |||||||||||
Impact of currency fluctuations (2) | 9,501 | — | 9,501 | (8.8 | ) | |||||||||||||
Comparable operating (loss) income adjusted for Certain Items using a constant currency basis (Non-GAAP) | $ | (119,296 | ) | $ | 108,038 | $ | (227,334 | ) | (210.4 | ) | % | |||||||
SYGMA | ||||||||||||||||||
Sales (GAAP) | $ | 6,498,601 | $ | 5,555,926 | $ | 942,675 | 17.0 | % | ||||||||||
Gross Profit (GAAP) | 554,014 | 483,494 | 70,520 | 14.6 | % | |||||||||||||
Gross Margin (GAAP) | 8.53 | % | 8.70 | % | -18 bps | |||||||||||||
Operating expenses (GAAP) | $ | 501,360 | $ | 446,614 | $ | 54,746 | 12.3 | % | ||||||||||
Impact of restructuring and transformational project costs | (7 | ) | (5,793 | ) | 5,786 | 99.9 | ||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 501,353 | $ | 440,821 | $ | 60,532 | 13.7 | % | ||||||||||
Operating income (GAAP) | $ | 52,654 | $ | 36,880 | $ | 15,774 | 42.8 | % | ||||||||||
Impact of restructuring and transformational project costs | 7 | 5,793 | (5,786 | ) | (99.9 | ) | ||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | $ | 52,661 | $ | 42,673 | $ | 9,988 | 23.4 | % | ||||||||||
OTHER | ||||||||||||||||||
Sales (GAAP) | $ | 723,761 | $ | 891,048 | $ | (167,287 | ) | (18.8 | ) | % | ||||||||
Gross Profit (GAAP) | 160,394 | 218,884 | (58,490 | ) | (26.7 | ) | % | |||||||||||
Gross Margin (GAAP) | 22.16 | % | 24.56 | % | -240 bps | |||||||||||||
Operating expenses (GAAP) | $ | 160,790 | $ | 240,245 | $ | (79,455 | ) | (33.1 | ) | % | ||||||||
Impact of restructuring and transformational project costs | (956 | ) | — | (956 | ) | NM | ||||||||||||
Impact of bad debt reserve adjustments (1) | 5,563 | (4,478 | ) | 10,041 | 224.2 | |||||||||||||
Impact of goodwill impairment | — | (11,660 | ) | 11,660 | NM | |||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 165,397 | $ | 224,107 | $ | (58,710 | ) | (26.2 | ) | % | ||||||||
Operating loss (GAAP) | $ | (396 | ) | $ | (21,361 | ) | $ | 20,965 | 98.1 | % | ||||||||
Impact of restructuring and transformational project costs | 956 | — | 956 | NM | ||||||||||||||
Impact of bad debt reserve adjustments (1) | (5,563 | ) | 4,478 | (10,041 | ) | (224.2 | ) | |||||||||||
Impact of goodwill impairment | — | 11,660 | (11,660 | ) | NM | |||||||||||||
Operating loss adjusted for Certain Items (Non-GAAP) | $ | (5,003 | ) | $ | (5,223 | ) | $ | 220 | 4.2 | % | ||||||||
CORPORATE | ||||||||||||||||||
Gross Profit (GAAP) | $ | (11,794 | ) | $ | (10,626 | ) | $ | (1,168 | ) | (11.0 | ) | % | ||||||
Operating expenses (GAAP) | $ | 827,383 | $ | 887,140 | $ | (59,757 | ) | (6.7 | ) | % | ||||||||
Impact of restructuring and transformational project costs (5) | (57,021 | ) | (163,249 | ) | 106,228 | 65.1 | ||||||||||||
Impact of acquisition-related costs (6) | (5,867 | ) | — | (5,867 | ) | NM | ||||||||||||
Impact of goodwill impairment | — | (57,066 | ) | 57,066 | NM | |||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 764,495 | $ | 666,825 | $ | 97,670 | 14.6 | % | ||||||||||
Operating loss (GAAP) | $ | (839,177 | ) | $ | (897,766 | ) | $ | 58,589 | 6.5 | % | ||||||||
Impact of restructuring and transformational project costs (5) | 57,021 | 163,249 | (106,228 | ) | (65.1 | ) | ||||||||||||
Impact of acquisition-related costs (6) | 5,867 | — | 5,867 | NM | ||||||||||||||
Impact of goodwill impairment | — | 57,066 | (57,066 | ) | NM | |||||||||||||
Operating loss adjusted for Certain Items (Non-GAAP) | $ | (776,289 | ) | $ | (677,451 | ) | $ | (98,838 | ) | (14.6 | ) | % | ||||||
TOTAL SYSCO | ||||||||||||||||||
Sales (GAAP) | $ | 51,297,843 | $ | 52,893,310 | $ | (1,595,467 | ) | (3.0 | ) | % | ||||||||
Gross Profit (GAAP) | 9,356,749 | 9,901,664 | (544,915 | ) | (5.5 | ) | % | |||||||||||
Gross Margin (GAAP) | 18.24 | % | 18.72 | % | -48 bps | |||||||||||||
Operating expenses (GAAP) | $ | 7,919,507 | $ | 9,152,159 | $ | (1,232,652 | ) | (13.5 | ) | % | ||||||||
Impact of restructuring and transformational project costs (3) (5) | (128,187 | ) | (371,087 | ) | 242,900 | 65.5 | ||||||||||||
Impact of acquisition-related costs (4) (6) | (79,540 | ) | (64,793 | ) | (14,747 | ) | (22.8 | ) | ||||||||||
Impact of bad debt reserve adjustments (1) | 184,813 | (323,403 | ) | 508,216 | 157.1 | |||||||||||||
Impact of goodwill impairment | — | (203,207 | ) | 203,207 | NM | |||||||||||||
Operating expenses adjusted for Certain Items (Non-GAAP) | $ | 7,896,593 | $ | 8,189,669 | $ | (293,076 | ) | (3.6 | ) | % | ||||||||
Operating income (GAAP) | $ | 1,437,242 | $ | 749,505 | $ | 687,737 | 91.8 | % | ||||||||||
Impact of restructuring and transformational project costs (3) (5) | 128,187 | 371,087 | (242,900 | ) | (65.5 | ) | ||||||||||||
Impact of acquisition-related costs (4) (6) | 79,540 | 64,793 | 14,747 | 22.8 | ||||||||||||||
Impact of bad debt reserve adjustments (1) | (184,813 | ) | 323,403 | (508,216 | ) | (157.1 | ) | |||||||||||
Impact of goodwill impairment | — | 203,207 | (203,207 | ) | NM | |||||||||||||
Operating income adjusted for Certain Items (Non-GAAP) | $ | 1,460,156 | $ | 1,711,995 | $ | (251,839 | ) | (14.7 | ) | % |
(1) | Fiscal 2021 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020. Fiscal 2020 represents excess bad debt charges recognized on the increase in past due receivables arising from the COVID-19 pandemic. | |
(2) | Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. | |
(3) | Includes restructuring, severance and facility closure costs primarily in | |
(4) | Represents intangible amortization expense from the Brakes Acquisition. | |
(5) | Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy. | |
(6) | Fiscal 2021 represents due diligence and integration costs related to the acquisition of | |
NM represents that the percentage change is not meaningful. |
Non-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.
53-Week Period Ended | 52-Week Period Ended | 53-Week Period Change in Dollars | |||||||||||
Net cash provided by operating activities (GAAP) | $ | 1,903,842 | $ | 1,618,680 | $ | 285,162 | |||||||
Additions to plant and equipment | (470,676 | ) | (720,423 | ) | 249,747 | ||||||||
Proceeds from sales of plant and equipment | 59,147 | 28,717 | 30,430 | ||||||||||
Free Cash Flow (Non-GAAP) | $ | 1,492,313 | $ | 926,974 | $ | 565,339 |
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
(Dollars in Thousands)
EBITDA represents net earnings (loss) plus (i) interest expense, (ii) income tax expense and benefit, (iii) depreciation and (iv) amortization. The net earnings (loss) component of our EBITDA calculation is impacted by Certain Items that we do not consider representative of our underlying performance. As a result, in the non-GAAP reconciliations below for each period presented, adjusted EBITDA is computed as EBITDA plus the impact of Certain Items, excluding Certain items related to interest expense, income taxes, depreciation and amortization. Sysco's management considers growth in this metric to be a measure of overall financial performance that provides useful information to management and investors about the profitability of the business, as it facilitates comparison of performance on a consistent basis from period to period by providing a measurement of recurring factors and trends affecting our business. Additionally, it is a commonly used component metric used to inform on capital structure decisions. Adjusted EBITDA should not be used as a substitute for the most comparable GAAP measure in assessing the company’s financial performance for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. In the tables that follow, adjusted EBITDA for each period presented is reconciled to net earnings (loss).
14-Week Period Ended | 13-Week Period Ended | Change in Dollars | % Change | |||||||||||||||
Net earnings (loss) (GAAP) | $ | 151,093 | $ | (618,419 | ) | $ | 769,512 | (124.4 | ) | % | ||||||||
Interest (GAAP) | 441,149 | 164,269 | 276,880 | 168.6 | ||||||||||||||
Income taxes (GAAP) | (9,075 | ) | (117,826 | ) | 108,751 | (92.3 | ) | |||||||||||
Depreciation and amortization (GAAP) | 195,445 | 247,177 | (51,732 | ) | (20.9 | ) | ||||||||||||
EBITDA (Non-GAAP) | $ | 778,612 | $ | (324,799 | ) | $ | 1,103,411 | NM | ||||||||||
Certain Item adjustments: | ||||||||||||||||||
Impact of restructuring and transformational project costs (1) | 31,440 | 116,218 | (84,778 | ) | (72.9 | ) | % | |||||||||||
Impact of acquisition-related costs | 5,867 | — | 5,867 | NM | ||||||||||||||
Impact of bad debt reserve adjustments (2) | (22,441 | ) | 169,903 | (192,344 | ) | (113.2 | ) | |||||||||||
Impact of goodwill impairment | — | 134,481 | (134,481 | ) | NM | |||||||||||||
Impact of other non-routine gains and losses (3) | (12,374 | ) | 46,968 | (59,342 | ) | (126.3 | ) | |||||||||||
EBITDA adjusted for Certain Items (Non-GAAP) (4) | $ | 781,104 | $ | 142,771 | $ | 638,333 | NM |
(1) | Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy, excluding charges related to accelerated depreciation. | |
(2) | Fiscal 2021 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020. Fiscal 2020 represents excess bad debt charges recognized on the increase in past due receivables arising from the COVID-19 pandemic. | |
(3) | Fiscal 2021 includes $9 million of gains on sale of property and other non-recurring items. Fiscal 2020 represents the impairment of assets held for sale. | |
(4) | In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $2 million and $5 million for fiscal 2021 and fiscal 2020, respectively, or non-cash stock compensation expense of $30 million for fiscal 2021 and $22 million of non-cash stock compensation benefit for fiscal 2020. |
53-Week Period Ended | 52-Week Period Ended | Change in Dollars | % Change | ||||||||||||||
Net earnings (loss) (GAAP) | $ | 524,209 | $ | 215,475 | $ | 308,734 | 143.3 | % | |||||||||
Interest (GAAP) | 880,137 | 408,220 | 471,917 | 115.6 | |||||||||||||
Income taxes (GAAP) | 60,519 | 77,909 | (17,390 | ) | (22.3 | ) | |||||||||||
Depreciation and amortization (GAAP) | 737,916 | 805,765 | (67,849 | ) | (8.4 | ) | |||||||||||
EBITDA (Non-GAAP) | $ | 2,202,781 | $ | 1,507,369 | $ | 695,412 | 46.1 | % | |||||||||
Certain Item adjustments: | |||||||||||||||||
Impact of restructuring and transformational project costs (1) | 120,693 | 290,284 | (169,591 | ) | (58.4 | ) | % | ||||||||||
Impact of acquisition-related costs | 5,867 | — | 5,867 | NM | |||||||||||||
Impact of bad debt reserve adjustments (2) | (184,813 | ) | 323,403 | (508,216 | ) | (157.1 | ) | ||||||||||
Impact of goodwill impairment | — | 203,206 | (203,206 | ) | NM | ||||||||||||
Impact of other non-routine gains and losses (3) | 10,460 | 46,968 | (36,508 | ) | (77.7 | ) | |||||||||||
EBITDA adjusted for Certain Items (Non-GAAP) (4) | $ | 2,154,988 | $ | 2,371,230 | $ | (216,242 | ) | (9.1 | ) | % |
(1) | Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy, excluding charges related to accelerated depreciation. | |
(2) | Fiscal 2021 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020. Fiscal 2020 represents excess bad debt charges recognized on the increase in past due receivables arising from the COVID-19 pandemic. | |
(3) | Fiscal 2021 includes $23 million of loss from the sale of businesses, $9 million of gains on sale of property and other non-recurring items. Fiscal 2020 represents the impairment of assets held for sale. | |
(4) | In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $15 million and $12 million or non-cash stock compensation expense of $96 million and $42 million for fiscal 2021 and fiscal 2020, respectively. |
For more information contact: | |
Media Contact shannon.mutchler@sysco.com T 281-584-4059 | Investor Contact neil.russell@sysco.com T 281-584-1308 |
Source:
2021 GlobeNewswire, Inc., source