1
SYSCO REPORTS RECORD FOURTH QUARTER AND FULL YEAR 2023 SALES, OPERATING
INCOME AND CASH FLOW
HOUSTON, August 1, 2023 - Sysco Corporation (NYSE: SYY) (“Sysco” or the “company”) today
announced financial results for its 13-week fourth fiscal quarter and its fiscal year ended July 1,
2023.
Key financial results for the fourth quarter of fiscal year 2023 include:
• Sales increased 4.1% versus the same period in fiscal year 2022;
• U.S. Foodservice volume increased 2.3% versus the same period in fiscal year 2022;
• Gross profit increased 7.0% to $3.7 billion, as compared to the same period last year;
• Operating income increased 26.5% to $969.4 million, and adjusted
1
operating income increased
16.9% to $1.0 billion, in each case as compared to the same period last year; Sysco delivered
the highest Q4 adjusted
1
operating income on record, which was 25.0% higher than the same
period in fiscal year 2019;
• EBITDA increased 33.2% to $1.3 billion, and adjusted EBITDA increased 14.4% to $1.2 billion,
in each case as compared to the same period last year
2
;
• EPS
3
increased 45.5% to $1.44 and adjusted
1
EPS increased 16.5% to $1.34, in each case as
compared to the same period last year; and
• We returned approximately $370.9 million of capital to shareholders via $122.3 million of share
repurchases and $248.6 million of dividends.
“Sysco delivered another quarter of solid sales, volume and market share gains. Our actions to
improve efficiency continued in the fourth quarter with sequential improvements in supply chain
productivity and additional cost outs, delivering meaningful operating expense leverage. We further
advanced our competitive advantages as the global leader in food service distribution through
advancements with our Recipe for Growth strategy. For the quarter and for the year, the Sysco team
delivered another record period of operating income. Sysco’s strong profitability, size and scale
advantages, and balance sheet health position our company for growth to continue into fiscal 2024
and beyond,” said Kevin Hourican, Sysco’s President and Chief Executive Officer.
“Our strong finish to the year, included record performance in the quarter and full year, further
illustrating the resilience of Sysco and reinforces our Recipe for Growth strategy is yielding dividends.
Our solid financial results included top-line and bottom-line growth, record free cash flow for the
year, and achievement of our target net debt ratio, which improved to 2.5 times. Improved
productivity drove operating expense leverage, resulting in strong bottom-line margin expansion.
Looking ahead, we plan to drive continued productivity gains. Adding to our track record of balanced
1
Adjusted financial results, including adjusted operating expense, adjusted operating income (loss), adjusted other expense (income), adjusted earnings per share
(EPS) and adjusted EBITDA, are non-GAAP financial measures that exclude certain items, which primarily include acquisition-related costs, restructuring costs,
transformational project costs, adjustments to our bad debt reserve specific to aged receivables existing prior to the COVID-19 pandemic and adjustments to a product
return allowance related to COVID-related personal protection equipment inventory. Specific to adjusted EPS, this year’s Certain Items include a pension settlement
charge that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer and a
gain on a litigation financing agreement. Last year’s Certain Items include the impact of a write-down of COVID-related personal protection equipment inventory due to
the reduction in the net realizable value of inventory, losses on the extinguishment of long-term debt and an increase in reserves for uncertain tax positions.
2
Earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA are non-GAAP financial measures. Reconciliations of all non-GAAP
financial measures to the nearest corresponding GAAP financial measure are included at the end of this release.
3
Earnings per share (EPS) are shown on a diluted basis, unless otherwise specified.
2
capital allocation, we rewarded our shareholders by returning approximately $1.5 billion of cash
during the year,” said Kenny Cheung, Sysco’s Chief Financial Officer.
Key financial results for fiscal year 2023 include:
• Sales increased 11.2% versus fiscal year 2022;
• U.S. Foodservice volume increased 5.2% versus fiscal year 2022;
• Gross profit increased 13.3% to $14.0 billion, as compared to the prior year;
• Operating income increased 29.5% to $3.0 billion, and adjusted operating income increased
21.7% to $3.2 billion, in each case as compared to the prior year; Sysco delivered the highest
full year adjusted
1
operating income on record, which was 17.3% higher than the prior peak;
• EBITDA increased 14.1% to $3.6 billion, and adjusted EBITDA increased 15.6% to $3.8 billion,
in each case as compared to the prior year;
• EPS increased 31.4% to $3.47 and adjusted
1
EPS increased 23.4% to $4.01, in each case as
compared to the prior year;
• Cash flow from operations increased 60.1% to $2.9 billion and free cash flow increased 79.0%
to $2.1 billion as compared to the same period last year; and
• Net Debt to adjusted EBITDA
4
improved to 2.5 times, achieving our target ratio; we returned
approximately $1.5 billion of capital to shareholders via $500.1 million of share repurchases
and $996.0 million of dividends.
Fourth Quarter Fiscal Year 2023 Results
Total Sysco
Sales for the fourth quarter were $19.7 billion, an increase of 4.1% compared to the same period
l a s t y e a r.
Gross profit increased 7.0% to $3.7 billion, and gross margin increased 51 basis points to 18.7%,
compared in each case to the same period last year. Product cost inflation was 2.1% at the total
enterprise level, as measured by the estimated change in Sysco’s product costs, primarily in the
frozen and canned and dry categories. The increase in gross profit for the fourth quarter was
primarily driven by higher volumes, as well as continued progress with effective management of
product cost inflation and our partnership growth management initiative.
Operating expenses increased $38.0 million, or 1.4%, compared to the same period last year, driven
by increased volumes and cost inflation, partially offset by improved productivity. Adjusted operating
expenses increased $49.2 million, or 1.9%, compared to the same period last year.
Operating income was $969.4 million, an increase of $202.9 million, or 26.5%, compared to the
same period last year. Adjusted operating income was $1.0 billion, an increase of $148.0 million
compared to the same period last year.
Other income was $124.2 million, driven by benefits from a legacy litigation financing agreement.
Adjusted other income, net was $3.3 million, a decrease of $0.6 million, compared to the same
period last year, primarily due to increased pension expenses.
U.S. Foodservice Operations
The U.S. Foodservice Operations segment generated sales growth, continued share gains and
improved profitability.
Sales for the fourth quarter were $13.7 billion, an increase of 2.5% compared to the same period
last year. Local case volume within U.S. Foodservice grew 0.8% for the fourth quarter, while total
case volume within U.S. Foodservice grew 2.3%, in each case as compared to the same period last
y e a r.
4
Net debt to adjusted EBITDA is a non-GAAP financial measure frequently used by investors and credit rating agencies. Our net debt to adjusted EBITDA ratio is
calculated using a numerator of our debt minus cash and cash equivalents, divided by the sum of the most recent four quarters of adjusted EBITDA.
3
Gross profit increased 4.1% to $2.7 billion, and gross margin increased 30 basis points to 19.7%,
compared in each case to the same period last year.
Operating expenses increased $12.3 million, or 0.7%, compared to the same period last year.
Adjusted operating expenses increased $8.8 million, or 0.5%, compared to the same period last year.
Operating income increased 9.8% to $1.0 billion, an increase of $93.8 million compared to the same
period last year. Adjusted operating income increased 10.1% to $1.1 billion, an increase of $97.3
million compared to the same period last year.
International Foodservice Operations
The International Foodservice Operations segment delivered meaningful growth, with strong double-
digit sales growth and significantly higher profit growth.
Sales for the fourth quarter were $3.6 billion, an increase of 12.2% compared to the same period
last year. On a constant currency basis
5
, sales for the fourth quarter were $3.7 billion, an increase of
13.6% compared to the same period last year. Foreign exchange rates decreased both International
Foodservice Operations sales by 1.4% and total Sysco sales by 0.2% during the quarter.
Gross profit increased 11.1% to $724.4 million, and gross margin decreased 19 basis points to
19.9%, compared in each case to the same period last year. On a constant currency basis
5
, gross
profit increased 11.9% to $729.3 million. Foreign exchange rates decreased both International
Foodservice Operations gross profit by 0.8% and total Sysco gross profit by 0.1% during the quarter.
Operating expenses decreased $1.5 million, or 0.3%, compared to the same period last year.
Adjusted operating expenses increased $19.4 million, or 3.5%, compared to the same period last
year. On a constant currency basis
5
, adjusted operating expenses increased $22.7 million, or 4.1%,
compared to the same period last year. Foreign exchange rates decreased both International
Foodservice Operations operating expenses by 0.6% and total Sysco operating expenses by 0.1%
during the quarter.
Operating income was $120.5 million, an improvement of $74.1 million compared to the same period
last year. Adjusted operating income increased 58.0% to $144.9 million compared to the same
period last year. On a constant currency basis
5
, adjusted operating income was $146.5 million, an
increase of $54.8 million compared to the same period last year. Foreign exchange rates decreased
both International Foodservice Operations operating income by $1.6 million and total Sysco operating
income by $2.5 million during the qua r t e r.
Fiscal Year 2023 Results
Total Sysco
Sales for fiscal year 2023 were $76.3 billion, an increase of 11.2% compared to the prior year.
Gross profit increased 13.3% to $14.0 billion, and gross margin increased 33 basis points to 18.3%,
compared in each case to the prior year. The increase in gross profit for the year was primarily driven
by higher volumes and high rates of inflation that were effectively managed. Product cost inflation
was 6.1% at the total enterprise level, as measured by the estimated change in Sysco’s product
costs, primarily in the dairy, frozen, and canned and dry categories.
Operating expenses increased $942.4 million, or 9.4%, compared to the prior year, driven by
increased volumes and cost pressures from the operating environment. Adjusted operating expenses
increased $986.6 million, or 10.1%, compared to the prior year.
5
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results. These adjusted measures are non-
GAAP financial measures. Reconciliations of all non-GAAP financial measures to the nearest corresponding GAAP financial measure are included at the end of this
release.
4
Operating income was $3.0 billion, an increase of $692.0 million, or 29.5%, compared to the prior
year. Adjusted operating income was $3.2 billion, an increase of $572.0 million, or 21.7%, compared
to the prior year.
U.S. Foodservice Operations
Sales for fiscal year 2023 were $53.7 billion, an increase of 10.6% compared to the prior year. Local
case volume within U.S. Foodservice grew 3.3% for fiscal year 2023, while total case volume within
U.S. Foodservice grew 5.2%, in each case as compared to the prior year.
Gross profit increased 12.6% to $10.4 billion, and gross margin increased 35 basis points to 19.3%,
compared in each case to the prior year.
Operating expenses increased $757.0 million, or 12.6%, compared to the prior year. Adjusted
operating expenses increased $730.9 million, or 12.2%, compared to the prior year.
Operating income increased 12.8% to $3.6 billion compared to the prior year. Adjusted operating
income increased 13.5% to $3.6 billion compared to the prior year.
International Foodservice Operations
Sales for fiscal year 2023 were $13.6 billion, an increase 15.0% compared to the prior year. On a
constant currency basis
5
, sales for fiscal year 2023 were $14.5 billion, an increase of 22.6%
compared to the prior year. Foreign exchange rates decreased both International Foodservice
Operations sales by 7.6% and total Sysco sales by 1.3% during the year.
Gross profit increased 11.1% to $2.6 billion, and gross margin decreased 69 basis points to 19.5%,
compared in each case to the prior year. On a constant currency basis
5
, gross profit increased 18.8%
to $2.8 billion, as compared to the prior year. Foreign exchange rates decreased both International
Foodservice Operations gross profit by 7.7% and total Sysco gross profit by 1.5% during the year.
Operating expenses increased $50.4 million, or 2.2%, compared to the prior year. Adjusted operating
expenses increased $94.6 million, or 4.4%, compared to the prior year. On a constant currency
basis
5
, adjusted operating expenses increased $260.9 million, or 12.1%, compared to the prior year.
Foreign exchange rates decreased both International Foodservice Operations operating expense by
7.7% and total Sysco operating expense by 1.9% during the year.
Operating income was $313.4 million, an improvement of $213.4 million compared to the prior year.
Adjusted operating income increased 74.0% to $397.7 million compared to the prior year. On a
constant currency basis
5
, adjusted operating income was $414.2 million, an increase of $185.6
million compared to the prior year. Foreign exchange rates decreased both International Foodservice
Operations operating income by $16.4 million and total Sysco operating income by $5.9 million
during the year.
Balance Sheet, Cash Flow and Capital Spending
As of the end of the quarter, the company had a cash balance of $745.2 million.
During the year, Sysco returned $1.5 billion to shareholders via $500.1 million of share repurchases
and $996.0 million of dividends.
Cash flow from operations was $2.9 billion for the fiscal year, which was an increase of $1.1 billion
over the prior year period.
Capital expenditures, net of proceeds from sales of plant and equipment, for fiscal year 2023 were
$751.2 million.
5
Free cash flow
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for fiscal year 2023 was $2.1 billion, which was an increase of $933.8 million over
the prior year period, driven by positive change in working capital.
6
Free cash flow is a non-GAAP financial measure that represents net cash provided from operating activities less purchases of plant and equipment and includes
proceeds from sales of plant and equipment. Reconciliations for all non-GAAP financial measures are included at the end of this release.
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Conference Call & Webcast
Sysco will host a conference call to review the company’s fourth quarter and full fiscal year 2023
financial results on Tuesday, August 1, 2023, at 10:00 a.m. Eastern Daylight Time. A live webcast of
the call, accompanying slide presentation and a copy of this news release will be available online at
investors.sysco.com.
Key Highlights:
13-Week Period Ended
52-Week Period Ended
July 1, 2023
Change
July 1, 2023
Change
$19.7 billion
4.1%
$76.3 billion
11.2%
Gross profit
$3.7 billion
7.0%
$14.0 billion
13.3%
18.7%
51 bps
18.3%
33 bps
$2.7 billion
1.4%
$10.9 billion
9.4%
$969.4 million
26.5%
$3.0 billion
29.5%
Operating Margin
4.9%
87 bps
4.0%
56 bps
$733.7 million
43.9%
$1.8 billion
30.3%
$1.44
45.5%
$3.47
31.4%
$3.7 billion
5.7%
$14.0 billion
12.6%
Gross Margin
18.7%
28 bps
18.3%
22 bps
$2.7 billion
1.9%
$10.7 billion
10.1%
$1.0 billion
16.9%
$3.2 billion
21.7%
5.2%
57 bps
4.2%
37 bps
EBITDA
$1.3 billion
33.2%
$3.6 billion
14.1%
$1.2 billion
14.4%
$3.8 billion
15.6%
$683.2 million
16.1%
$2.0 billion
22.2%
(2)
$1.34
16.5%
$4.01
23.4%
U.S. Foodservice
2.3%
5.2%
0.8%
3.3%
37.2%
11 bps
37.0%
36 bps
47.3%
64 bps
46.8%
118 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.
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Forward-Looking Statements
Statements made in this press release or in our earnings call for the fourth quarter of fiscal year
2023 that look forward in time or that express
management’s beliefs, expectations or hopes are
forward-
looking statements under the Private Securities Litigation Reform Act of 1995. Such
forward-
looking statements reflect the views of management at the time such statements are made
and are subject to a
number of risks, uncertainties, estimates, and assumptions that may cause
actual results to differ materially from current expectations. These statements include statements
concerning: the effect, impact, potential duration or other implications of the COVID-
19 pandemic
and any expectations we may have with respect thereto; our expectations regarding future
improvements in productivity; our belief that improvements in our organizational capabilities will
deliver compelling outcomes in future periods; our e
xpectations regarding improvements in
international volume; our expectations that our transformational agenda will drive long-
term
growth; our expectations regarding the continuation of an inflationary environment; our
expectations regarding improvements i
n the efficiency of our supply chain; our expectations
regarding the impact of our Recipe for Growth strategy and the pace of progress in implementing
the initiatives under that strategy; our expectations regarding Sysco’s ability to outperform the
market
in future periods; our expectations that our strategic priorities will enable us to grow faster
than the market; our expectations regarding our efforts to reduce overtime rates and the
incremental investments in hiring; our expectations regarding the expan
sion of our driver academy
and our belief that the academy will enable us to provide upward career path mobility for our
warehouse colleagues and improve colleague retention; our expectations regarding the benefits of
the six-day delivery and last mile dis
tribution models; our plans to improve the capabilities of our
sales team; our expectations regarding the impact of our growth initiatives and their ability to
enable Sysco to consistently outperform the market; our expectations to exceed our growth target
by the end of fiscal 2024; our ability to deliver against our strategic priorities; economic trends in
the United States and abroad; our belief that there is further opportunity for profit in the future; our
future growth, including growth in sales and ea
rnings per share; the pace of implementation of our
business transformation initiatives; our expectations regarding our balanced approach to capital
allocation and rewarding our shareholders; our plans to improve colleague retention, training and
productiv
ity; our belief that our Recipe for Growth transformation is creating capabilities that will
help us profitably grow for the long term; our expectations regarding our long-
term financial
outlook; our expectations of the effects labor harmony will have on s
ales and case volume, as well
as mitigation expenses; our expectations for customer acquisition in the local/street space; our
expectations regarding the effectiveness of our Global Support Center expense control measures;
and our expectations regarding the growth and resilience of our food away from home market.
It is important to note that actual results could differ materially from those projected in such
forward-looking statements based on numerous factors, including those outside of Sysco’s
control.
For more information concerning factors that could cause actual results to differ from those
expressed or forecasted, see our Annual Report on Form 10-
K for the year ended July 2, 2022, as
filed with the SEC, and our subsequent filings with the SE
C. We do not undertake to update our
forward-looking statements, except as required by applicable law.
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About Sysco
Sysco is the global leader in selling, marketing and distributing food products to restaurants,
healthcare and educational facilities, lodging establishments and other customers who prepare meals
away from home. Its family of products also includes equipment and supplies for the foodservice and
hospitality industries. With more than 72,000 colleagues, the company operates 334 distribution
facilities worldwide and serves approximately 725,000 customer locations. For fiscal year 2023 that
ended July 1, 2023, the company generated sales of more than $76 billion. Information about our
Sustainability program, including Sysco’s 2022 Sustainability Report and 2022 Diversity, Equity &
Inclusion Report, can be found at www.sysco.com.
For more information, visit www.sysco.com or connect with Sysco on Facebook at
www.facebook.com/SyscoFoods. For important news and information regarding Sysco, visit the
Investor Relations section of the company’s Internet home page at investors.sysco.com, which Sysco
plans to use as a primary channel for publishing key information to its investors, some of which may
contain material and previously non-public information. In addition, investors should continue to
review our news releases and filings with the SEC. It is possible that the information we disclose
through any of these channels of distribution could be deemed to be material information.
9
Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED RESULTS OF OPERATIONS (Unaudited)
(In Thousands, Except for Share and Per Share Data)
Quarter Ended
Year Ended
Jul. 1, 2023
Jul. 2, 2022
Jul. 1, 2023
Jul. 2, 2022
Sales
$ 19,728,216
$ 18,957,258
$ 76,324,675
$ 68,636,146
Cost of sales
16,043,050
15,512,986
62,369,678
56,315,622
Gross profit
3,685,166
3,444,272
13,954,997
12,320,524
Operating expenses
2,715,769
2,677,802
10,916,448
9,974,024
Operating income
969,397
766,470
3,038,549
2,346,500
Interest expense
135,629
128,512
526,752
623,643
Other expense (income), net
(1)
(124,172)
(3,921)
226,442
(23,916)
Earnings before income taxes
957,940
641,879
2,285,355
1,746,773
Income taxes
224,204
131,890
515,231
388,005
Net earnings
$ 733,736
$ 509,989
$ 1,770,124
$ 1,358,768
Net earnings:
Basic earnings per share
$ 1.45
$ 1.00
$ 3.49
$ 2.66
Diluted earnings per share
1.44
0.99
3.47
2.64
Average shares outstanding
506,546,404
510,593,953
507,362,913
510,630,645
Diluted shares outstanding
508,507,679
513,426,966
509,719,756
514,005,827
(1)
Sysco’s second quarter of fiscal 2023 included a charge for $315.4 million in other expense
related to pension settlement charges.
Sysco’s fourth quarter of fiscal 2023 included $122.0 million in other income related to a legacy litigation financing agreem
ent. Gains and
losses related to the disposition of fixed assets have been recognized within
operating expenses. Prior year amounts have been
reclassified to conform to this presentation.
10
Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In Thousands, Except for Share Data)
Jul. 1, 2023
Jul. 2, 2022
ASSETS
Current assets
Cash and cash equivalents
$ 745,201
$ 867,086
Accounts receivable, less allowances of $45,599 and $70,790
5,091,970
4,838,912
Inventories
4,480,812
4,437,498
Prepaid expenses and other current assets
284,566
303,789
Income tax receivable
5,815
35,934
Total current assets
10,608,364
10,483,219
Plant and equipment at cost, less accumulated depreciation
4,915,049
4,456,420
Other long-term assets
Goodwill
4,645,754
4,542,315
Intangibles, less amortization
859,530
952,683
Deferred income taxes
420,450
377,604
Operating lease right-of-use assets, net
731,766
723,297
Other assets
640,232
550,150
Total other long-term assets
7,297,732
7,146,049
Total assets
$ 22,821,145
$ 22,085,688
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable
$ 6,025,757
$ 5,752,958
Accrued expenses
2,251,181
2,270,753
Accrued income taxes
101,894
40,042
Current operating lease liabilities
99,051
105,690
Current maturities of long-term debt
62,550
580,611
Total current liabilities
8,540,433
8,750,054
Long-term liabilities
Long-term debt
10,347,997
10,066,931
Deferred income taxes
302,904
250,171
Long-term operating lease liabilities
656,269
636,417
Other long-term liabilities
931,708
967,907
Total long-term liabilities
12,238,878
11,921,426
Commitments and contingencies
Noncontrolling interest
33,212
31,948
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
1,814,681
1,766,305
Retained earnings
11,310,664
10,539,722
Accumulated other comprehensive loss
(1,252,590)
(1,482,054)
Treasury stock at cost, 260,062,834 and 256,531,543 shares
(10,629,308)
(10,206,888)
Total shareholders’ equity
2,008,622
1,382,260
Total liabilities and shareholders’ equity
$ 22,821,145
$ 22,085,688
11
Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED CASH FLOWS (Unaudited)
(In Thousands)
Year Ended
Jul. 1, 2023
Jul. 2, 2022
Cash flows from operating activities:
Net earnings
$ 1,770,124
$ 1,358,768
Adjustments to reconcile net earnings to cash provided by operating activities:
Pension settlement charge
315,354
—
Share-based compensation expense
95,660
122,315
Depreciation and amortization
775,604
772,881
Operating lease asset amortization
113,073
108,052
Amortization of debt issuance and other debt-related costs
20,007
22,305
Deferred income taxes
(16,434)
(64,454)
Provision for losses (gains) on receivables
35,655
(15,494)
Loss on extinguishment of debt
—
115,603
Other non-cash items
(6,907)
(12,692)
Additional changes in certain assets and liabilities, net of effect of businesses acquired:
Increase in receivables
(270,639)
(971,170)
Increase in inventories
(22,219)
(708,610)
Decrease in prepaid expenses and other current assets
2,147
4,805
Increase in accounts payable
195,607
810,451
Increase in accrued expenses
22,368
423,429
Decrease in operating lease liabilities
(133,754)
(125,741)
Increase (decrease) in accrued income taxes
91,971
(9,775)
Decrease (increase) in other assets
5,565
(1,082)
Decrease in other long-term liabilities
(125,580)
(38,305)
Net cash provided by operating activities
2,867,602
1,791,286
Cash flows from investing activities:
Additions to plant and equipment
(793,325)
(632,802)
Proceeds from sales of plant and equipment
42,147
24,144
Acquisition of businesses, net of cash acquired
(37,384)
(1,281,137)
Purchase of marketable securities
(16,191)
(19,318)
Proceeds from sales of marketable securities
11,641
16,648
Other investing activities
(1)
8,499
14,259
Net cash used for investing activities
(784,613)
(1,878,206)
Cash flows from financing activities:
Other debt borrowings including senior notes
248,977
1,248,207
Other debt repayments including senior notes
(829,828)
(494,585)
Redemption premiums and repayments for senior notes
—
(1,395,668)
Cash received from termination of interest rate swap agreements
—
23,127
Proceeds from stock option exercises
79,171
128,167
Stock repurchases
(500,093)
(499,825)
Dividends paid
(995,985)
(958,937)
Other financing activities
(2)
(58,218)
(37,384)
Net cash used for financing activities
(2,055,976)
(1,986,898)
Effect of exchange rates on cash, cash equivalents and restricted cash
7,643
(31,906)
Net increase (decrease) in cash, cash equivalents and restricted cash
34,656
(2,105,724)
Cash, cash equivalents and restricted cash at beginning of period
931,376
3,037,100
Cash, cash equivalents and restricted cash at end of period
$ 966,032
$ 931,376
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest
$ 510,730
$ 498,349
Income taxes, net of refunds
444,399
450,148
12
(1)
Change primarily includes proceeds from the settlement of corporate-owned life insurance policies.
(2)
Change includes cash paid for shares withheld to cover taxes, settlement of interest rate hedges and other financing activities.
13
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
The discussion of our results includes certain non-
GAAP financial measures, including EBITDA
and adjusted EBITDA, that we believe provide important perspective with respect to underlying
business trends. Other than free cash flow, any non-
GAAP financial measures will be denoted as
adju
sted measures to remove the impact of restructuring and transformational project costs
consisting of: (1) restructuring charges, (2) expenses associated with our various transformation
initiatives and (3) severance charges; acquisition-related costs consis
ting of: (a) intangible
amortization expense and (b) acquisition costs and due diligence costs related to our acquisitions;
and the reduction of bad debt expense previously recognized in fiscal 2020 due to the impact of the
COVID-19 pandemic on the collectability of our pre-
pandemic trade receivable balances. Our results
for fiscal 2023 were also impacted by adjustments to a product return allowance pertaining to
COVID-related personal protection equipment inventory, a pension settlement charge that resulte
d
from the purchase of a nonparticipating single premium group annuity contract that transferred
defined benefit plan obligations to an insurer, and a litigation financing agreement. Our results for
fiscal 2022 were also impacted by a write-down of COVID-r
elated personal protection equipment
inventory due to the reduction in the net realizable value of inventory, losses on the extinguishment
of long-term debt and an increase in reserves for uncertain tax positions.
The results of our operations can be
impacted due to changes in exchange rates applicable in
converting local currencies to U.S. dollars. We measure our results on a constant currency basis.
Constant currency operating results are calculated by translating current-
period local currency
operat
ing results with the currency exchange rates used to translate the financial statements in the
comparable prior-year period to determine what the current-
period U.S. dollar operating results
would have been if the currency exchange rate had not changed from the comparable prior-
year
period.
Management believes that adjusting its operating expenses, operating income, net earnings
and diluted earnings per share to remove these Certain Items and presenting its results on a
constant currency basis,
provides an important perspective with respect to our underlying business
trends and results 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.
Sysco has a history of growth through acquisitions and excludes from its non-
GAAP financial
measures the impact of acquisition-related intangible amortization, acquisition costs and due-
diligenc
e costs for those acquisitions. We believe this approach significantly enhances the
comparability of Sysco’s results for fiscal 2023 and fiscal 2022.
Set forth below is a reconciliation of sales, operating expenses, operating income, other
(income) expense, net earnings and diluted earnings per share to adjusted results for these
measures for the periods presented. Individual components of diluted earnings per share may not
add up to the total presented due to rounding. Adjusted diluted earn
ings per share is calculated
using adjusted net earnings divided by diluted shares outstanding.
14
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
(Dollars in Thousands, Except for Share and Per Share Data)
13-Week
Period Ended
Jul. 1, 2023
13-Week
Period Ended
Jul. 2, 2022
Change in
Dollars
%/bps
Change
Sales (GAAP)
$ 19,728,216
$ 18,957,258
$ 770,958
4.1 %
Impact of currency fluctuations
(1)
47,538
—
47,538
0.2
Comparable sales using a constant currency basis (Non-
GAAP)
$ 19,775,754
$ 18,957,258
$ 818,496
4.3 %
Cost of sales (GAAP)
$ 16,043,050
$ 15,512,986
$ 530,064
3.4 %
Impact of inventory valuation adjustment
(2)
—
(43,673)
43,673
0.3
Cost of sales adjusted for Certain Items (Non-GAAP)
$ 16,043,050
$ 15,469,313
$ 573,737
3.7 %
Gross profit (GAAP)
$ 3,685,166
$ 3,444,272
$ 240,894
7.0 %
Impact of inventory valuation adjustment
(2)
—
43,673
(43,673)
(1.3)
Gross profit adjusted for Certain Items (Non-GAAP)
3,685,166
3,487,945
197,221
5.7
Impact of currency fluctuations
(1)
6,070
—
6,070
0.1
Comparable gross profit adjusted for Certain Items using a
constant currency basis (Non-GAAP)
$ 3,691,236
$ 3,487,945
$ 203,291
5.8 %
Gross margin (GAAP)
18.68 %
18.17 %
51 bps
Impact of inventory valuation adjustment
(2)
—
0.23
-23 bps
Gross margin adjusted for Certain Items (Non-GAAP)
18.68
18.40
28 bps
Impact of currency fluctuations
(1)
(0.01)
—
-1 bps
Comparable gross margin adjusted for Certain Items using a
constant currency basis (Non-GAAP)
18.67 %
18.40 %
27 bps
Operating expenses (GAAP)
$ 2,715,769
$ 2,677,802
$ 37,967
1.4 %
Impact of restructuring and transformational project costs
(3)
(24,678)
(37,417)
12,739
34.0
Impact of acquisition-related costs
(4)
(28,470)
(35,724)
7,254
20.3
Impact of bad debt reserve adjustments
(5)
—
8,783
(8,783)
NM
Operating expenses adjusted for Certain Items (Non-GAAP)
2,662,621
2,613,444
49,177
1.9
Impact of currency fluctuations
(1)
3,596
—
3,596
0.1
Comparable operating expenses adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$ 2,666,217
$ 2,613,444
$ 52,773
2.0 %
Operating expense as a percentage of sales (GAAP)
13.77 %
14.13 %
-36 bps
Impact of certain item adjustments
(0.27)
(0.34)
7 bps
Adjusted operating expense as a percentage of sales (Non-
GAAP)
13.50 %
13.79 %
-29 bps
Operating income (GAAP)
$ 969,397
$ 766,470
$ 202,927
26.5 %
Impact of inventory valuation adjustment
(2)
—
43,673
(43,673)
NM
Impact of restructuring and transformational project costs
(3)
24,678
37,417
(12,739)
(34.0)
Impact of acquisition-related costs
(4)
28,470
35,724
(7,254)
(20.3)
Impact of bad debt reserve adjustments
(5)
—
(8,783)
8,783
NM
Operating income adjusted for Certain Items (Non-GAAP)
1,022,545
874,501
148,044
16.9
Impact of currency fluctuations
(1)
2,474
—
2,474
0.3
Comparable operating income adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$ 1,025,019
$ 874,501
$ 150,518
17.2 %
Operating margin (GAAP)
4.91 %
4.04 %
87 bps
Operating margin adjusted for Certain Items (Non-GAAP)
5.18 %
4.61 %
57 bps
Interest expense (GAAP)
$ 135,629
$ 128,512
$ 7,117
5.5 %
15
Other income (GAAP)
$ (124,172)
$ (3,921)
$ (120,251)
NM
Impact of other non-routine gains and losses
120,867
—
120,867
NM
Other income adjusted for Certain Items (Non-GAAP)
$ (3,305)
$ (3,921)
$ 616
15.7 %
Net earnings (GAAP)
$ 733,736
$ 509,989
$ 223,747
43.9 %
Impact of inventory valuation adjustment
(2)
—
43,673
(43,673)
NM
Impact of restructuring and transformational project costs
(3)
24,678
37,417
(12,739)
(34.0)
Impact of acquisition-related costs
(4)
28,470
35,724
(7,254)
(20.3)
Impact of bad debt reserve adjustments
(5)
—
(8,783)
8,783
NM
Impact of other non-routine gains and losses
(120,867)
—
(120,867)
NM
Tax impact of inventory valuation adjustment
(6)
—
(11,452)
11,452
NM
Tax impact of restructuring and transformational project costs
(6)
(6,265)
(10,082)
3,817
37.9
Tax impact of acquisition-related costs
(6)
(7,227)
(9,847)
2,620
26.6
Tax impact of bad debt reserves adjustments
(6)
—
2,383
(2,383)
NM
Tax impact of loss on extinguishment of debt
(6)
—
(699)
699
NM
Tax impact of other non-routine gains and losses
(6)
30,683
—
30,683
NM
Net earnings adjusted for Certain Items (Non-GAAP)
$ 683,208
$ 588,323
$ 94,885
16.1 %
Diluted earnings per share (GAAP)
$ 1.44
$ 0.99
$ 0.45
45.5 %
Impact of inventory valuation adjustment
(2)
—
0.09
(0.09)
NM
Impact of restructuring and transformational project costs
(3)
0.05
0.07
(0.02)
(28.6)
Impact of acquisition-related costs
(4)
0.06
0.07
(0.01)
(14.3)
Impact of bad debt reserve adjustments
(5)
—
(0.02)
0.02
NM
Impact of other non-routine gains and losses
(0.24)
—
(0.24)
NM
Tax impact of inventory valuation adjustment
(6)
—
(0.02)
0.02
NM
Tax impact of restructuring and transformational project costs
(6)
(0.01)
(0.02)
0.01
50.0
Tax impact of acquisition-related costs
(6)
(0.01)
(0.02)
0.01
50.0
Tax impact of other non-routine gains and losses
(6)
0.06
—
0.06
NM
Diluted earnings per share adjusted for Certain Items (Non-
GAAP)
(7)
$ 1.34
$ 1.15
$ 0.19
16.5 %
Diluted shares outstanding
508,507,679
513,426,966
(1)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results.
(2)
Fiscal 2022 represents a write-down of COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory.
(3)
Fiscal 2023 includes $8 million related to restructuring and severance charges and $17 million related to various transformation initiative costs, primarily consisting of changes
to our business technology strategy. Fiscal 2022 includes $29 million related to restructuring and severance charges and $8 million related to various transformation initiative
costs, primarily consisting of changes to our business technology strategy.
(4)
Fiscal 2023 includes $27 million of intangible amortization expense and
$1 million in acquisition and due diligence costs. Fiscal 2022 includes $31 million of intangible
amortization expense and $5 million in acquisition and due diligence costs.
(5)
Fiscal 2022 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(6)
The tax impact of adjustments for Certain Items are calculated by multiplying the pretax impact of each Certain Item by the s
tatutory rates in effect for each jurisdiction
where the Certain Item was incurred.
(7)
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.
16
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
(Dollars in Thousands)
13-Week
Period Ended
Jul. 1, 2023
13-Week
Period Ended
Jun. 29, 2019
Change in
Dollars
%/bps
Change
Sales (GAAP)
$ 19,728,216
$ 15,474,862
$ 4,253,354
27.5 %
Gross profit (GAAP)
3,685,166
2,979,192
705,974
23.7 %
Gross margin (GAAP)
18.68 %
19.25 %
-57 bps
Operating expenses (GAAP)
$ 2,715,769
$ 2,258,458
$ 457,311
20.2 %
Impact of restructuring and transformational project costs
(1)
(24,678)
(77,753)
53,075
68.3
Impact of acquisition-related costs
(2)
(28,470)
(19,789)
(8,681)
(43.9)
Operating expenses adjusted for Certain Items (Non-GAAP)
$ 2,662,621
$ 2,160,916
$ 501,705
23.2 %
Operating income (GAAP)
$ 969,397
$ 720,734
$ 248,663
34.5 %
Impact of restructuring and transformational project costs
(1)
24,678
77,753
(53,075)
(68.3)
Impact of acquisition-related costs
(2)
28,470
19,789
8,681
43.9
Operating income adjusted for Certain Items (Non-GAAP)
$ 1,022,545
$ 818,276
$ 204,269
25.0 %
(1)
Fiscal 2023 includes $8 million related to restructuring and severance charges and $17 million related to various transformation initiative costs, primarily consisting of changes
to our business technology strategy. Fiscal 2019 includes $37 million related
to various transformation initiative costs, primarily consisting of changes to our business
technology strategy and $41 million related to severance, restructuring and integration charges.
(2)
Fiscal 2023 includes $27 million of intangible amortization expense and $1 million in acquisition and due diligence costs. Fiscal 2019 includes $19 million related to intangible
amortization expense from the Brakes Acquisition, which is included in the results of Brakes.
NM
Represents that the percentage change is not meaningful.
17
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
(Dollars in Thousands, Except for Share and Per Share Data)
52-Week
Period Ended
Jul. 1, 2023
52-Week
Period Ended
Jul. 2, 2022
Change in
Dollars
%/bps
Change
Sales (GAAP)
$ 76,324,675
$ 68,636,146
$ 7,688,529
11.2 %
Impact of currency fluctuations
(1)
910,290
—
910,290
1.3
Comparable sales using a constant currency basis (Non-
GAAP)
$ 77,234,965
$ 68,636,146
$ 8,598,819
12.5 %
Cost of sales (GAAP)
$ 62,369,678
$ 56,315,622
$ 6,054,056
10.8 %
Impact of inventory valuation adjustment
(2)
2,571
(73,224)
75,795
0.1
Cost of sales adjusted for Certain Items (Non-GAAP)
$ 62,372,249
$ 56,242,398
$ 6,129,851
10.9 %
Gross profit (GAAP)
$ 13,954,997
$ 12,320,524
$ 1,634,473
13.3 %
Impact of inventory valuation adjustment
(2)
(2,571)
73,224
(75,795)
(0.7)
Gross profit adjusted for Certain Items (Non-GAAP)
13,952,426
12,393,748
1,558,678
12.6
Impact of currency fluctuations
(1)
188,796
—
188,796
1.5
Comparable gross profit adjusted for Certain Items using a
constant currency basis (Non-GAAP)
$ 14,141,222
$ 12,393,748
$ 1,747,474
14.1 %
Gross margin (GAAP)
18.28 %
17.95 %
33 bps
Impact of inventory valuation adjustment
(2)
—
0.11
-11 bps
Gross margin adjusted for Certain Items (Non-GAAP)
18.28
18.06
22 bps
Impact of currency fluctuations
(1)
0.03
—
3 bps
Comparable gross margin adjusted for Certain Items using a
constant currency basis (Non-GAAP)
18.31 %
18.06 %
25 bps
Operating expenses (GAAP)
$ 10,916,448
$ 9,974,024
$ 942,424
9.4 %
Impact of restructuring and transformational project costs
(3)
(62,965)
(107,475)
44,510
41.4
Impact of acquisition-related costs
(4)
(115,889)
(139,173)
23,284
16.7
Impact of bad debt reserve adjustments
(5)
4,425
27,999
(23,574)
(84.2)
Operating expenses adjusted for Certain Items (Non-GAAP)
10,742,019
9,755,375
986,644
10.1
Impact of currency fluctuations
(1)
182,873
—
182,873
1.9
Comparable operating expenses adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$ 10,924,892
$ 9,755,375
$ 1,169,517
12.0 %
Operating expense as a percentage of sales (GAAP)
14.30 %
14.53 %
-23 bps
Impact of certain item adjustments
(0.23)
(0.32)
9 bps
Adjusted operating expense as a percentage of sales (Non-
GAAP)
14.07 %
14.21 %
-14 bps
Operating income (GAAP)
$ 3,038,549
$ 2,346,500
$ 692,049
29.5 %
Impact of inventory valuation adjustment
(2)
(2,571)
73,224
(75,795)
NM
Impact of restructuring and transformational project costs
(3)
62,965
107,475
(44,510)
(41.4)
Impact of acquisition-related costs
(4)
115,889
139,173
(23,284)
(16.7)
Impact of bad debt reserve adjustments
(5)
(4,425)
(27,999)
23,574
84.2
Operating income adjusted for Certain Items (Non-GAAP)
3,210,407
2,638,373
572,034
21.7
Impact of currency fluctuations
(1)
5,923
—
5,923
0.2
Comparable operating income adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$ 3,216,330
$ 2,638,373
$ 577,957
21.9 %
Operating margin (GAAP)
3.98 %
3.42 %
56 bps
Operating margin adjusted for Certain Items (Non-GAAP)
4.21 %
3.84 %
37 bps
Operating margin adjusted for Certain Items using a constant
currency basis (Non-GAAP)
4.16 %
3.83 %
33 bps
18
Interest expense (GAAP)
$ 526,752
$ 623,643
$ (96,891)
(15.5) %
Impact of loss on extinguishment of debt
—
(115,603)
115,603
NM
Interest expense adjusted for Certain Items (Non-GAAP)
$ 526,752
$ 508,040
$ 18,712
3.7 %
Other expense (income) (GAAP)
$ 226,442
$ (23,916)
$ 250,358
NM
Impact of other non-routine gains and losses
(6)
(194,459)
—
(194,459)
NM
Other expense (income) adjusted for Certain Items (Non-
GAAP)
$ 31,983
$ (23,916)
$ 55,899
NM
Net earnings (GAAP)
$ 1,770,124
$ 1,358,768
$ 411,356
30.3 %
Impact of inventory valuation adjustment
(2)
(2,571)
73,224
(75,795)
NM
Impact of restructuring and transformational project costs
(3)
62,965
107,475
(44,510)
(41.4)
Impact of acquisition-related costs
(4)
115,889
139,173
(23,284)
(16.7)
Impact of bad debt reserve adjustments
(5)
(4,425)
(27,999)
23,574
84.2
Impact of loss on extinguishment of debt
—
115,603
(115,603)
NM
Impact of other non-routine gains and losses
(6)
194,459
—
194,459
NM
Tax impact of inventory valuation adjustment
(7)
647
(18,902)
19,549
NM
Tax impact of restructuring and transformational project costs
(7)
(15,847)
(27,743)
11,896
42.9
Tax impact of acquisition-related costs
(7)
(29,166)
(35,926)
6,760
18.8
Tax impact of bad debt reserves adjustments
(7)
1,114
7,228
(6,114)
(84.6)
Tax impact of loss on extinguishment of debt
(7)
—
(29,841)
29,841
NM
Tax impact of other non-routine gains and losses
(7)
(48,941)
—
(48,941)
NM
Impact of adjustments to uncertain tax positions
—
12,000
(12,000)
NM
Net earnings adjusted for Certain Items (Non-GAAP)
$ 2,044,248
$ 1,673,060
$ 371,188
22.2 %
Diluted earnings per share (GAAP)
$ 3.47
$ 2.64
$ 0.83
31.4 %
Impact of inventory valuation adjustment
(2)
(0.01)
0.14
(0.15)
NM
Impact of restructuring and transformational project costs
(3)
0.12
0.21
(0.09)
(42.9)
Impact of acquisition-related costs
(4)
0.23
0.27
(0.04)
(14.8)
Impact of bad debt reserve adjustments
(5)
(0.01)
(0.05)
0.04
80.0
Impact of loss on extinguishment of debt
—
0.22
(0.22)
NM
Impact of other non-routine gains and losses
(6)
0.38
—
0.38
NM
Tax impact of inventory valuation adjustment
(7)
—
(0.04)
0.04
NM
Tax impact of restructuring and transformational project costs
(7)
(0.03)
(0.05)
0.02
40.0
Tax impact of acquisition-related costs
(7)
(0.06)
(0.07)
0.01
14.3
Tax impact of bad debt reserves adjustments
(7)
—
0.01
(0.01)
NM
Tax impact of loss on extinguishment of debt
(7)
—
(0.06)
0.06
NM
Tax impact of other non-routine gains and losses
(7)
(0.10)
—
(0.10)
NM
Impact of adjustments to uncertain tax positions
—
0.02
(0.02)
NM
Diluted earnings per share adjusted for Certain Items (Non-
GAAP)
(8)
$ 4.01
$ 3.25
$ 0.76
23.4 %
Diluted shares outstanding
509,719,756
514,005,827
(1)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results.
(2)
Fiscal 2023 represents an adjustment to a product return allowance, related to COVID-related personal protection equipment inventory. Fiscal 2022 represents a write-down
of COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory.
(3)
Fiscal 2023 includes $20 million related to restructuring and severance charges and $43 million related to various transformation initiative costs, primarily consisting of
changes to our business technology strategy. Fiscal 2022 includes $59 million related to restructuring and severance charges and $49 million related to various transformation
initiative costs, primarily consisting of changes to our business technology strategy.
(4)
Fiscal 2023 includes $105 million of intangible amortization expense and $10 million in acquisition and due diligence
costs. Fiscal 2022 includes $106 million of intangible
amortization expense and $33 million in acquisition and due diligence costs.
(5)
Fiscal 2023 and fiscal 2022 represent the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(6)
Fiscal 2023 primarily includes a pension settlement charge of $315 million that resulted from the purchase of a nonparticipat
ing single premium group annuity contract that
transferred defined benefit plan obligations to an insurer and $122 million in income from a litigation financing agreement.
(7)
The tax impact of adjustments for Certain Items is calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where
the Certain Item was incurred.
(8)
Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net
earnings divided by diluted shares outstanding.
NM
Represents that the percentage change is not meaningful.
19
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items
(Dollars in Thousands, Except for Share and Per Share Data)
52-Week
Period Ended
Jul. 1, 2023
52-Week
Period Ended
Jun. 29, 2019
Change in
Dollars
%/bps
Change
Sales (GAAP)
$ 76,324,675
$ 60,113,922
$ 16,210,753
27.0 %
Cost of sales (GAAP)
$ 62,369,678
$ 48,704,935
$ 13,664,743
28.1 %
Impact of inventory valuation adjustment
(1)
2,571
—
2,571
—
Cost of sales adjusted for Certain Items (Non-GAAP)
$ 62,372,249
$ 48,704,935
$ 13,667,314
28.1 %
Gross profit (GAAP)
$ 13,954,997
$ 11,408,987
$ 2,546,010
22.3 %
Impact of inventory valuation adjustment
(1)
(2,571)
—
(2,571)
—
Gross profit adjusted for Certain Items (Non-GAAP)
$ 13,952,426
$ 11,408,987
$ 2,543,439
22.3 %
Gross margin (GAAP)
18.28 %
18.98 %
-70 bps
Operating expenses (GAAP)
$ 10,916,448
$ 9,075,768
$ 1,840,680
20.3 %
Impact of restructuring and transformational project costs
(2)
(62,965)
(325,300)
262,335
80.6
Impact of acquisition-related costs
(3)
(115,889)
(77,832)
(38,057)
(48.9)
Impact of bad debt reserve adjustments
(4)
4,425
—
4,425
NM
Operating expenses adjusted for Certain Items (Non-GAAP)
$ 10,742,019
$ 8,672,636
$ 2,069,383
23.9 %
Operating income (GAAP)
$ 3,038,549
$ 2,333,219
$ 705,330
30.2 %
Impact of inventory valuation adjustment
(1)
(2,571)
—
(2,571)
NM
Impact of restructuring and transformational project costs
(2)
62,965
325,300
(262,335)
(80.6)
Impact of acquisition-related costs
(3)
115,889
77,832
38,057
48.9
Impact of bad debt reserve adjustments
(4)
(4,425)
—
(4,425)
NM
Operating income adjusted for Certain Items (Non-GAAP)
$ 3,210,407
$ 2,736,351
$ 474,056
17.3 %
(1)
Fiscal 2023 represents an adjustment to a product return allowance, related to COVID-related personal protection equipment inventory.
(2)
Fiscal 2023 includes $20 million related to restructuring and severance charges and $43 million related to various transformation initiative costs, primarily consisting of
changes to our business technology strategy. Fiscal 2019 includes $151 million related to various transformation initiative cost
s, primarily consisting of changes to our
business technology strategy, of which $18 million relates to accelerated depreciation related to software that is being repl
aced, and $174 million related to severance,
restructuring and integration charges in Europe, Canada and at the Global Support Center, of which $61 million relates to our France restructuring as part of our integration of
Brake France and Davigel into Sysco France.
(3)
Fiscal 2023 includes $105 million of intangible amortization
expense and $10 million in acquisition and due diligence costs. Fiscal 2019 includes $77 million related to
intangible amortization expense from the Brakes Acquisition, which is included in the results of Brakes, and $1 million related to integration costs.
(4)
Fiscal 2023 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
NM
Represents that the percentage change is not meaningful.
20
Sysco Corporation and its Consolidated Subsidiaries
Segment Results
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Applicable Segments
(Dollars in Thousands)
13-Week
Period Ended
Jul. 1, 2023
13-Week
Period Ended
Jul. 2, 2022
Change in
Dollars
%/bps
Change
U.S. FOODSERVICE OPERATIONS
Sales (GAAP)
$ 13,745,839
$ 13,413,281
$ 332,558
2.5 %
Gross profit (GAAP)
2,707,712
2,601,656
106,056
4.1 %
Gross margin (GAAP)
19.70 %
19.40 %
30 bps
Operating expenses (GAAP)
$ 1,661,691
$ 1,649,413
$ 12,278
0.7 %
Impact of restructuring and transformational project costs
(614)
(778)
164
21.1
Impact of acquisition-related costs
(1)
(10,479)
(10,825)
346
3.2
Impact of bad debt reserve adjustments
(2)
—
4,035
(4,035)
NM
Operating expenses adjusted for Certain Items (Non-GAAP)
$ 1,650,598
$ 1,641,845
$ 8,753
0.5 %
Operating income (GAAP)
$ 1,046,021
$ 952,243
$ 93,778
9.8 %
Impact of restructuring and transformational project costs
614
778
(164)
(21.1)
Impact of acquisition-related costs
(1)
10,479
10,825
(346)
(3.2)
Impact of bad debt reserve adjustments
(2)
—
(4,035)
4,035
NM
Operating income adjusted for Certain Items (Non-GAAP)
$ 1,057,114
$ 959,811
$ 97,303
10.1 %
INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP)
$ 3,649,343
$ 3,251,841
$ 397,502
12.2 %
Impact of currency fluctuations
(3)
44,130
—
44,130
1.4
Comparable sales using a constant currency basis (Non-
GAAP)
$ 3,693,473
$ 3,251,841
$ 441,632
13.6 %
Gross profit (GAAP)
$ 724,357
$ 651,787
$ 72,570
11.1 %
Impact of currency fluctuations
(3)
4,949
—
4,949
0.8
Comparable gross profit using a constant currency basis
(Non-GAAP)
$ 729,306
$ 651,787
$ 77,519
11.9 %
Gross margin (GAAP)
19.85 %
20.04 %
-19 bps
Impact of currency fluctuations
(3)
(0.10)
—
-10 bps
Comparable gross margin using a constant currency basis
(Non-GAAP)
19.75 %
20.04 %
-29 bps
Operating expenses (GAAP)
$ 603,853
$ 605,391
$ (1,538)
(0.3) %
Impact of restructuring and transformational project costs
(4)
(7,423)
(27,257)
19,834
72.8
Impact of acquisition-related costs
(5)
(16,977)
(22,790)
5,813
25.5
Impact of bad debt reserve adjustments
(2)
—
4,748
(4,748)
NM
Operating expenses adjusted for Certain Items (Non-GAAP)
579,453
560,092
19,361
3.5
Impact of currency fluctuations
(3)
3,351
—
3,351
0.6
Comparable operating expenses adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$ 582,804
$ 560,092
$ 22,712
4.1 %
Operating income (GAAP)
$ 120,504
$ 46,396
$ 74,108
NM
Impact of restructuring and transformational project costs
(4)
7,423
27,257
(19,834)
(72.8)
Impact of acquisition-related costs
(5)
16,977
22,790
(5,813)
(25.5)
Impact of bad debt reserve adjustments
(2)
—
(4,748)
4,748
NM
Operating income adjusted for Certain Items (Non-GAAP)
144,904
91,695
53,209
58.0
Impact of currency fluctuations
(3)
1,598
—
1,598
1.8
Comparable operating income adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$ 146,502
$ 91,695
$ 54,807
59.8 %
21
SYGMA
Sales (GAAP)
$ 2,004,060
$ 1,975,631
$ 28,429
1.4 %
Gross profit (GAAP)
160,677
153,926
6,751
4.4 %
Gross margin (GAAP)
8.02 %
7.79 %
23 bps
Operating expenses (GAAP)
$ 141,866
$ 152,674
$ (10,808)
(7.1) %
Operating income (GAAP)
18,811
1,252
17,559
NM
OTHER
Sales (GAAP)
$ 328,974
$ 316,505
$ 12,469
3.9 %
Gross profit (GAAP)
88,715
78,898
9,817
12.4 %
Gross margin (GAAP)
26.97 %
24.93 %
204 bps
Operating expenses (GAAP)
$ 65,093
$ 64,158
$ 935
1.5 %
Operating income (loss) (GAAP)
23,622
14,740
8,882
60.3 %
GLOBAL SUPPORT CENTER
Gross profit (loss) (GAAP)
$ 3,705
$ (41,995)
$ 45,700
NM
Impact of inventory valuation adjustment
(6)
—
43,673
(43,673)
NM
Gross profit adjusted for Certain Items (Non-GAAP)
$ 3,705
$ 1,678
$ 2,027
NM
Operating expenses (GAAP)
$ 243,266
$ 206,166
$ 37,100
18.0 %
Impact of restructuring and transformational project costs
(7)
(16,641)
(9,382)
(7,259)
(77.4)
Impact of acquisition-related costs
(8)
(1,014)
(2,109)
1,095
51.9
Operating expenses adjusted for Certain Items (Non-GAAP)
$ 225,611
$ 194,675
$ 30,936
15.9 %
Operating loss (GAAP)
$ (239,561)
$ (248,161)
$ 8,600
3.5 %
Impact of inventory valuation adjustment
(6)
—
43,673
(43,673)
NM
Impact of restructuring and transformational project costs
(7)
16,641
9,382
7,259
77.4
Impact of acquisition-related costs
(8)
1,014
2,109
(1,095)
(51.9)
Operating loss adjusted for Certain Items (Non-GAAP)
$ (221,906)
$ (192,997)
$ (28,909)
(15.0) %
TOTAL SYSCO
Sales (GAAP)
$ 19,728,216
$ 18,957,258
$ 770,958
4.1 %
Gross profit (GAAP)
3,685,166
3,444,272
240,894
7.0 %
Gross margin (GAAP)
18.68 %
18.17 %
51 bps
Operating expenses (GAAP)
$ 2,715,769
$ 2,677,802
$ 37,967
1.4 %
Impact of restructuring and transformational project costs
(4) (7)
(24,678)
(37,417)
12,739
34.0
Impact of acquisition-related costs
(1) (5) (8)
(28,470)
(35,724)
7,254
20.3
Impact of bad debt reserve adjustments
(2)
—
8,783
(8,783)
NM
Operating expenses adjusted for Certain Items (Non-GAAP)
$ 2,662,621
$ 2,613,444
$ 49,177
1.9 %
Operating income (GAAP)
$ 969,397
$ 766,470
$ 202,927
26.5 %
Impact of inventory valuation adjustment
(6)
—
43,673
(43,673)
NM
Impact of restructuring and transformational project costs
(4) (7)
24,678
37,417
(12,739)
(34.0)
Impact of acquisition-related costs
(1) (5) (8)
28,470
35,724
(7,254)
(20.3)
Impact of bad debt reserve adjustments
(2)
—
(8,783)
8,783
NM
Operating income adjusted for Certain Items (Non-GAAP)
$ 1,022,545
$ 874,501
$ 148,044
16.9 %
22
(1)
Fiscal 2023 and fiscal 2022 include intangible amortization expense and acquisition costs.
(2)
Fiscal 2022 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(3)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results.
(4)
Includes restructuring costs primarily in Europe.
(5)
Represents intangible amortization expense.
(6)
Fiscal 2022 represents a write-down of COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory.
(7)
Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(8)
Represents due diligence costs.
NM
Represents that the percentage change is not meaningful.
23
Sysco Corporation and its Consolidated Subsidiaries
Segment Results
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items on Applicable Segments
(Dollars in Thousands)
52-Week
Period Ended
Jul. 1, 2023
52-Week
Period Ended
Jul. 2, 2022
Change in
Dollars
%/bps
Change
U.S. FOODSERVICE OPERATIONS
Sales (GAAP)
$ 53,682,894
$ 48,520,562
$ 5,162,332
10.6 %
Gross profit (GAAP)
10,359,003
9,196,133
1,162,870
12.6 %
Gross margin (GAAP)
19.30 %
18.95 %
35 bps
Operating expenses (GAAP)
$ 6,772,427
$ 6,015,428
$ 756,999
12.6 %
Impact of restructuring and transformational project costs
(817)
(1,162)
345
29.7
Impact of acquisition-related costs
(1)
(46,042)
(36,207)
(9,835)
(27.2)
Impact of bad debt reserve adjustments
(2)
4,170
20,765
(16,595)
(79.9)
Operating expenses adjusted for Certain Items (Non-GAAP)
$ 6,729,738
$ 5,998,824
$ 730,914
12.2 %
Operating income (GAAP)
$ 3,586,576
$ 3,180,705
$ 405,871
12.8 %
Impact of restructuring and transformational project costs
817
1,162
(345)
(29.7)
Impact of acquisition-related costs
(1)
46,042
36,207
9,835
27.2
Impact of bad debt reserve adjustments
(2)
(4,170)
(20,765)
16,595
79.9
Operating income adjusted for Certain Items (Non-GAAP)
$ 3,629,265
$ 3,197,309
$ 431,956
13.5 %
INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP)
$ 13,559,610
$ 11,787,449
$ 1,772,161
15.0 %
Impact of currency fluctuations
(3)
892,296
—
892,296
7.6
Comparable sales using a constant currency basis (Non-
GAAP)
$ 14,451,906
$ 11,787,449
$ 2,664,457
22.6 %
Gross profit (GAAP)
$ 2,640,860
$ 2,377,093
$ 263,767
11.1 %
Impact of currency fluctuations
(3)
182,803
—
182,803
7.7
Comparable gross profit using a constant currency basis
(Non-GAAP)
$ 2,823,663
$ 2,377,093
$ 446,570
18.8 %
Gross margin (GAAP)
19.48 %
20.17 %
-69 bps
Impact of currency fluctuations
(3)
0.06
—
6 bps
Comparable gross margin using a constant currency basis
(Non-GAAP)
19.54 %
20.17 %
-63 bps
Operating expenses (GAAP)
$ 2,327,411
$ 2,277,060
$ 50,351
2.2 %
Impact of restructuring and transformational project costs
(4)
(19,018)
(57,683)
38,665
67.0
Impact of acquisition-related costs
(5)
(65,511)
(78,062)
12,551
16.1
Impact of bad debt reserve adjustments
(2)
255
7,236
(6,981)
(96.5)
Operating expenses adjusted for Certain Items (Non-GAAP)
2,243,137
2,148,551
94,586
4.4
Impact of currency fluctuations
(3)
166,356
—
166,356
7.7
Comparable operating expenses adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$ 2,409,493
$ 2,148,551
$ 260,942
12.1 %
Operating income (GAAP)
$ 313,449
$ 100,033
$ 213,416
NM
Impact of restructuring and transformational project costs
(4)
19,018
57,683
(38,665)
(67.0)
Impact of acquisition-related costs
(5)
65,511
78,062
(12,551)
(16.1)
Impact of bad debt reserve adjustments
(2)
(255)
(7,236)
6,981
96.5
Operating income adjusted for Certain Items (Non-GAAP)
397,723
228,542
169,181
74.0
Impact of currency fluctuations
(3)
16,447
—
16,447
7.2
Comparable operating income adjusted for Certain Items
using a constant currency basis (Non-GAAP)
$ 414,170
$ 228,542
$ 185,628
81.2 %
24
SYGMA
Sales (GAAP)
$ 7,843,111
$ 7,245,824
$ 597,287
8.2 %
Gross profit (GAAP)
631,135
576,280
54,855
9.5 %
Gross margin (GAAP)
8.05 %
7.95 %
10 bps
Operating expenses (GAAP)
$ 574,609
$ 579,404
$ (4,795)
(0.8) %
Operating income (loss) (GAAP)
56,526
(3,124)
59,650
NM
OTHER
Sales (GAAP)
$ 1,239,060
$ 1,082,311
$ 156,749
14.5 %
Gross profit (GAAP)
326,315
248,125
78,190
31.5 %
Gross margin (GAAP)
26.34 %
22.93 %
341 bps
Operating expenses (GAAP)
$ 269,438
$ 230,733
$ 38,705
16.8 %
Impact of bad debt reserve adjustments
(2)
—
(2)
2
NM
Operating expenses adjusted for Certain Items (Non-GAAP)
$ 269,438
$ 230,731
$ 38,707
16.8 %
Operating income (GAAP)
$ 56,877
$ 17,392
$ 39,485
NM
Impact of bad debt reserve adjustments
(2)
—
2
(2)
NM
Operating income adjusted for Certain Items (Non-GAAP)
$ 56,877
$ 17,394
$ 39,483
NM
GLOBAL SUPPORT CENTER
Gross loss (GAAP)
$ (2,316)
$ (77,107)
$ 74,791
97.0 %
Impact of inventory valuation adjustment
(6)
(2,571)
73,224
(75,795)
NM
Gross loss adjusted for Certain Items (Non-GAAP)
$ (4,887)
$ (3,883)
$ (1,004)
(25.9) %
Operating expenses (GAAP)
$ 972,563
$ 871,399
$ 101,164
11.6 %
Impact of restructuring and transformational project costs
(7)
(43,130)
(48,630)
5,500
11.3
Impact of acquisition-related costs
(8)
(4,336)
(24,904)
20,568
82.6
Operating expenses adjusted for Certain Items (Non-GAAP)
$ 925,097
$ 797,865
$ 127,232
15.9 %
Operating loss (GAAP)
$ (974,879)
$ (948,506)
$ (26,373)
(2.8) %
Impact of inventory valuation adjustment
(6)
(2,571)
73,224
(75,795)
NM
Impact of restructuring and transformational project costs
(7)
43,130
48,630
(5,500)
(11.3)
Impact of acquisition-related costs
(8)
4,336
24,904
(20,568)
(82.6)
Operating loss adjusted for Certain Items (Non-GAAP)
$ (929,984)
$ (801,748)
$ (128,236)
(16.0) %
TOTAL SYSCO
Sales (GAAP)
$ 76,324,675
$ 68,636,146
$ 7,688,529
11.2 %
Gross profit (GAAP)
13,954,997
12,320,524
1,634,473
13.3 %
Gross margin (GAAP)
18.28 %
17.95 %
33 bps
Operating expenses (GAAP)
$ 10,916,448
$ 9,974,024
$ 942,424
9.4 %
Impact of restructuring and transformational project costs
(4) (7)
(62,965)
(107,475)
44,510
41.4
Impact of acquisition-related costs
(1) (5) (8)
(115,889)
(139,173)
23,284
16.7
Impact of bad debt reserve adjustments
(2)
4,425
27,999
(23,574)
(84.2)
Operating expenses adjusted for Certain Items (Non-GAAP)
$ 10,742,019
$ 9,755,375
$ 986,644
10.1 %
Operating income (GAAP)
$ 3,038,549
$ 2,346,500
$ 692,049
29.5 %
Impact of inventory valuation adjustment
(6)
(2,571)
73,224
(75,795)
NM
Impact of restructuring and transformational project costs
(4) (7)
62,965
107,475
(44,510)
(41.4)
Impact of acquisition-related costs
(1) (5) (8)
115,889
139,173
(23,284)
(16.7)
Impact of bad debt reserve adjustments
(2)
(4,425)
(27,999)
23,574
84.2
Operating income adjusted for Certain Items (Non-GAAP)
$ 3,210,407
$ 2,638,373
$ 572,034
21.7 %
25
(1)
Fiscal 2023 and fiscal 2022 include intangible amortization expense and acquisition costs.
(2)
Fiscal 2023 and fiscal 2022 represent the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(3)
Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results.
(4)
Includes restructuring and severance costs primarily in Europe.
(5)
Represents intangible amortization expense.
(6)
Fiscal 2023 represents an adjustment to a product return allowance, related to COVID-related personal protection equipment inventory. Fiscal 2022 represents a write-down
of COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory.
(7)
Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(8)
Represents due diligence costs.
NM
Represents that the percentage change is not meaningful.
26
Sysco Corporation and its Consolidated Subsidiaries
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 financial measure in assessing the company’s liquidity for the periods
presented. An analysis of any non-GAAP financial measure should be used in conjunction with results
presented in accordance with GAAP. In the table that follows, free cash flow for each period
presented is reconciled to net cash provided by operating activities.
52-Week
Period Ended
Jul. 1, 2023
52-Week
Period Ended
Jul. 2, 2022
52-Week
Period Change
in Dollars
Net cash provided by operating activities (GAAP)
$ 2,867,602
$ 1,791,286
$ 1,076,316
Additions to plant and equipment
(793,325)
(632,802)
(160,523)
Proceeds from sales of plant and equipment
42,147
24,144
18,003
Free Cash Flow (Non-GAAP)
$ 2,116,424
$ 1,182,628
$ 933,796
27
Sysco Corporation and its Consolidated Subsidiaries
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 financial measure in assessing the company’s financial performance for the
periods presented. An analysis of any non-GAAP financial measure should be used in conjunction
with results presented in accordance with GAAP. In the tables that follow, adjusted EBITDA for each
period presented is reconciled to net earnings.
13-Week
Period Ended
Jul. 1, 2023
13-Week
Period Ended
Jul. 2, 2022
Change in
Dollars
% Change
Net earnings (GAAP)
$ 733,736
$ 509,989
$ 223,747
43.9 %
Interest (GAAP)
135,629
128,512
7,117
5.5
Income taxes (GAAP)
224,204
131,890
92,314
70.0
Depreciation and amortization (GAAP)
200,659
201,274
(615)
(0.3)
EBITDA (Non-GAAP)
$ 1,294,228
$ 971,665
$ 322,563
33.2 %
Certain Item adjustments:
Impact of inventory valuation adjustment
(1)
—
43,673
(43,673)
NM
Impact of restructuring and
transformational project costs
(2)
23,819
36,998
(13,179)
(35.6)
Impact of acquisition-related costs
(3)
1,448
4,479
(3,031)
(67.7)
Impact of bad debt reserve adjustments
(4)
—
(8,783)
8,783
NM
Impact of other non-routine gains and
losses
(120,867)
—
(120,867)
NM
EBITDA adjusted for Certain Items
(Non-GAAP)
(5)
$ 1,198,628
$ 1,048,032
$ 150,596
14.4 %
(1)
Fiscal 2022 represents a write-down of COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory.
(2)
Fiscal 2023 and fiscal 2022 include charges related to restructuring and severance, as well as various transformation initiat
ive costs, primarily consisting of changes to our
business technology strategy, excluding charges related to accelerated depreciation.
(3)
Fiscal 2023 and fiscal 2022 include acquisition and due diligence costs.
(4)
Fiscal 2022 represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(5)
In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $9 million and $2 million or non-cash stock compensation expense of $22 million and $32 million
in fiscal 2023 and fiscal 2022, respectively.
NM
Represents that the percentage change is not meaningful.
28
52-Week
Period Ended
Jul. 1, 2023
52-Week
Period Ended
Jul. 2, 2022
Change in
Dollars
% Change
Net earnings (GAAP)
$ 1,770,124
$ 1,358,768
$ 411,356
30.3 %
Interest (GAAP)
526,752
623,643
(96,891)
(15.5)
Income taxes (GAAP)
515,231
388,005
127,226
32.8
Depreciation and amortization (GAAP)
775,604
772,881
2,723
0.4
EBITDA (Non-GAAP)
$ 3,587,711
$ 3,143,297
$ 444,414
14.1 %
Certain Item adjustments:
Impact of inventory valuation adjustment
(1)
(2,571)
73,224
(75,795)
NM
Impact of restructuring and
transformational project costs
(2)
61,009
106,091
(45,082)
(42.5)
Impact of acquisition-related costs
(3)
10,393
32,738
(22,345)
(68.3)
Impact of bad debt reserve adjustments
(4)
(4,425)
(27,999)
23,574
84.2
Impact of other non-routine gains and
losses
(5)
194,459
—
194,459
NM
EBITDA adjusted for Certain Items
(Non-GAAP)
(6)
$ 3,846,576
$ 3,327,351
$ 519,225
15.6 %
(1)
Fiscal 2023 represents an adjustment to a product return allowance, related to COVID-related personal protection equipment inventory. Fiscal 2022 represents a write-down
of COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory.
(2)
Fiscal 2023 and fiscal 2022 include charges related to restructuring and severance, as well as various transformation initiative costs, primarily
consisting of changes to our
business technology strategy, excluding charges related to accelerated depreciation.
(3)
Fiscal 2023 and fiscal 2022 include acquisition and due diligence costs.
(4)
Fiscal 2023 and fiscal 2022 represent the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(5)
Fiscal 2023 primarily includes a pension settlement charge of $315 million that resulted from the purchase of a nonparticipating single premium gr
oup annuity contract that
transferred defined benefit plan obligations to an insurer and $122 million in income from a litigation financing agreement.
(6)
In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $24 million and $7 million or non-
cash stock compensation expense of $95 million and $122
million for fiscal 2023 and fiscal 2022, respectively.
NM
Represents that the percentage change is not meaningful.
29
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Net Debt to Adjusted EBITDA
(In Thousands)
Net Debt to Adjusted EBITDA is a non-GAAP financial measure frequently used by investors and
credit rating agencies. Our Net Debt to Adjusted EBITDA ratio is calculated using a numerator of our
debt minus cash and cash equivalents, divided by the sum of the most recent four quarters of
Adjusted EBITDA. In the table that follows, we have provided the calculation of our debt and net debt
as a ratio of Adjusted EBITDA.
Jul. 1, 2023
Current Maturities of long-term debt
$ 62,550
Long-term debt
10,347,997
Total Debt
10,410,547
Cash & Cash Equivalents
(745,201)
Net Debt
$ 9,665,346
Adjusted EBITDA for the previous 12 months
$ 3,846,576
Debt/Adjusted EBITDA Ratio
2.7
Net Debt/Adjusted EBITDA Ratio
2.5