CORRECTING AND REPLACING -- Sysco Reports Fourth Quarter Diluted EPS of $0.43 ($0.50 After Adjusting for Certain Items) and Fiscal Year 2014 Diluted EPS of $1.58 ($1.76 After Adjusting for Certain Items)

HOUSTON, Aug. 11, 2014 (GLOBE NEWSWIRE) -- In a press release issued earlier today by Sysco Corporation (NYSE:SYY), please note one of the figures was incorrect. Under Cash Flow and Capital Spending, free cash flow is $995 million, not $995 billion as originally reported. The corrected release follows:

Sysco Corporation (NYSE:SYY) today announced financial results for its 13-week fourth fiscal quarter, and its 52-week fiscal year ended June 28, 2014.

Fourth Quarter Fiscal 2014 Highlights

• Sales were $12.3 billion, an increase of 5.9% from $11.6 billion in the fourth quarter of fiscal 2013.
• Operating income was $425 million, a decrease of 7.7%, compared to $460 million in last year's fourth quarter.
• Adjusted¹ operating income was $482 million, or 1.2% higher compared to the prior year period, after adjusting for certain items, which mainly related to merger and integration planning expenses.
• Diluted earnings per share (EPS) were $0.43, which was 8.5% lower compared to last year's fourth quarter.
• Adjusted¹ diluted EPS was $0.50, or flat compared to the prior year period, after adjusting for certain items.

Fiscal 2014 Highlights

• Sales were $46.5 billion, an increase of 4.7% from $44.4 billion in fiscal 2013.
• Operating income was $1.6 billion, a decrease of 4.3% compared to $1.7 billion in the prior year period.
• Adjusted¹ operating income was $1.7 billion, or 0.9% lower compared to the prior year period, after adjusting for certain items, which mainly related to merger and integration planning expenses, a change in Sysco's self-insurance reserve, and a legal settlement reserve.
• Net earnings declined 6.1% to $932 million, and diluted EPS declined 5.4% to $1.58.
• Adjusted¹ net earnings were $1.0 billion, which was 1.8% lower compared to the prior year, after adjusting for certain items.
• Adjusted¹ diluted EPS was $1.76, which was 1.1% lower compared to the prior year, after adjusting for certain items.
• Cash flow from operations was $1.5 billion in fiscal 2014, and free cash flow¹ was $995 million.

"Fiscal 2014 was an important year for Sysco as we enhanced our capabilities throughout the year to more effectively serve our customers and run our business more efficiently," said Bill DeLaney, Sysco's president and chief executive officer. "While business conditions remained challenging for our customers, we experienced improving trends in year-over-year sales and gross profit growth in the last four months of our fiscal year. As we begin fiscal 2015, we are well positioned to further strengthen our customer relationships and look forward to completing our proposed merger with US Foods."

Fourth Quarter Fiscal 2014 Summary

Sales for the fourth quarter were $12.3 billion, an increase of 5.9% compared to sales in the same period last year. Food cost inflation was 4.1%, as measured by the estimated change in Sysco's product costs, driven mainly by inflation in the meat, dairy and seafood categories. In addition, sales from acquisitions (within the last 12 months) increased sales by 0.6%, and the impact of changes in foreign exchange rates for the fourth quarter decreased sales by 0.7%. Case volume for the company's Broadline and SYGMA operations combined grew 2.2% during the quarter, including acquisitions, and approximately 2.1%, excluding acquisitions.

Gross profit for the fourth quarter was $2.2 billion, an increase of 4.0% compared to the prior year. Operating expenses in the fourth quarter increased $119 million, or 7.4%, compared to the prior year period, including a $41 million increase in certain items, which mainly related to merger and integration planning costs. Excluding certain items, operating expenses increased $78 million, or 4.9%, mainly due to higher delivery and corporate expenses and new expenses from acquired companies.

Operating income was $425 million in the fourth quarter, decreasing $35 million, or 7.7%, compared to operating income in the prior year. After adjusting for certain items, adjusted¹ operating income increased 1.2% from the prior year period.

Net earnings for the fourth quarter were $254 million, a decrease of $29 million, or 10.2%, compared to the prior year. Diluted EPS in the fourth quarter of fiscal 2014 was $0.43, which was 8.5% lower compared to last year's fourth quarter. After adjusting for certain items, adjusted diluted EPS was $0.50, which was flat compared to the prior year period.

Fiscal 2014 Summary

Sales for fiscal 2014 were $46.5 billion, an increase of 4.7% compared to sales in the same period last year. Food cost inflation was 2.1%, as measured by the estimated change in Sysco's product costs, driven mainly by inflation in the meat, seafood and dairy categories. In addition, sales from acquisitions (within the last 12 months) increased sales by 1.4%, and the impact of changes in foreign exchange rates for the fiscal year decreased sales by 0.6%. Case volume for the company's Broadline and SYGMA operations combined grew 3.4% during the fiscal year, including acquisitions, and approximately 2.2%, excluding acquisitions.

Gross profit for fiscal 2014 was $8.2 billion, an increase of 2.3%, compared to the prior year. Operating expenses increased $256 million, or 4.0%, compared to operating expenses in the prior year period including a $55 million increase in certain items, which mainly related to merger and integration planning expenses, a change in Sysco's self-insurance reserve, and a legal settlement, offset by restructuring and multi-employer pension plan withdrawal charges in the prior year. Excluding certain items, adjusted¹ operating expenses increased $201 million, or 3.2%, primarily due to new costs from acquired companies, increased depreciation and amortization, higher delivery and corporate expenses and other payroll costs, partially offset by lower sales organization costs and a decrease in retirement-related expense.

Operating income was $1.6 billion in the fiscal year, decreasing $71 million, or 4.3%, compared to operating income in the prior year. After adjusting for certain items, adjusted¹ operating income declined 0.9% from the prior year.

Net earnings for fiscal 2014 were $932 million, a decrease of $61 million, or 6.1%, compared to the prior year. Diluted EPS in fiscal 2014 was $1.58, which was 5.4% lower compared to last fiscal year. After adjusting for certain items, adjusted diluted EPS was $1.76, or a decline of 1.1% from the prior year.

Cash Flow and Capital Spending

Cash flow from operations was $1.5 billion for fiscal 2014, and free cash flow was $995 million. Capital expenditures totaled $136 million for the fourth quarter of 2014, and $523 million for the fiscal year. The primary areas for investment included facility replacements and expansions, as well as replacements to Sysco's fleet.

Conference Call & Webcast

Sysco's fourth quarter fiscal 2014 earnings conference call will be held on Monday, August 11, 2014, at 10:00 a.m. Eastern. A live webcast of the call, a copy of this press release and a slide presentation, will be available online at www.sysco.com in the Investors section.

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. The company operates 194 distribution facilities serving approximately 425,000 customers. For Fiscal Year 2014 that ended June 28, 2014, the company generated sales of more than $46 billion. For more information, visit www.sysco.com or connect with Sysco on Facebook at www.facebook.com/SyscoCorporation or Twitter at https://twitter.com/Sysco. For important news regarding Sysco, visit the Investor Relations portion of the company's Internet home page at www.sysco.com/investors, follow us at www.twitter.com/SyscoStock and download the new Sysco IR App, available on the iTunes App Store and the Google Play Market. In addition, investors should also continue to review our press releases and filings with the Securities and Exchange Commission. It is possible that the information we disclose through any of these channels of distribution could be deemed to be material information.

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¹ See Non-GAAP Reconciliation below for more information

Forward-Looking Statements

Statements made in this press release or in our earnings call for the fourth quarter of fiscal 2014 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 our plans and expectations related to and the benefits and expected timing of our business transformation initiatives, our plans and expectations related to and the benefits of the proposed merger with US Foods, and our plans and expectations related to acquisitions. These statements also include expectations regarding our sales growth, operating expense growth and operating performance results, trends in our locally-managed business and overall sales mix, market conditions and trends, inflation, our expense management and Broadline cost per case performance, business transformation costs and expenses, investments in technology resources, free cash flow and capital expenditures. The success of our business transformation initiatives 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 regional and national customers, inflation risks, the impact of fuel prices, adverse publicity, and labor issues. 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 may not increase and decreases in consumer spending, particularly on food-away-from-home, may not reverse. Market conditions may not improve as anticipated. If sales from our locally managed customers do not grow at the same rate as sales from regional and national customers, our gross margins may continue to decline. Our ability to meet our long-term strategic objectives to grow the profitability of our business depends largely on the success of our Business Transformation Project. There are various risks related to the project, including the risk that the project and its various components 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 the ERP system may be greater or less than currently expected because we have encountered, and may continue to encounter, the need for changes in design or revisions of the project calendar and budget, including the incurrence of expenses at an earlier or later time than currently anticipated; the risk that our business and results of operations may be adversely affected if we experience delays in deployment, operating problems, cost overages or limitations on the extent of the business transformation during the ERP implementation process; and the risk of adverse effects to our business, results of operations and liquidity if the ERP system, and the associated process changes, do not prove to be cost effective or do not result in the cost savings and other benefits at the levels that we anticipate. In fiscal 2013, we delayed the deployment of certain components of our ERP system so that we could address certain areas of improvement. We installed a major scheduled update to the ERP system and deployed the system to additional locations in fiscal 2014. Planned deployments in the coming quarters are dependent upon the success of the ERP system and the updates at the current locations. We may experience delays, cost overages or operating problems when we deploy the system to additional locations. Our plans related to and the timing of the implementation of the ERP system, as well as the cost transformation and category management initiatives, are subject to change at any time based on management's subjective evaluation of our overall business needs. We may fail to realize anticipated benefits, particularly expected cost savings, from our cost transformation initiative. If we are unable to realize the anticipated benefits from our cost cutting efforts, we could become cost disadvantaged in the marketplace, and our competitiveness and our profitability could decrease. We may also fail to realize the full anticipated benefits of our category management initiative, and may be unable to successfully execute the initiative in our anticipated timeline. Capital expenditures may vary from those projected based on changes in business plans and other factors, including risks related to the implementation of our business transformation initiatives and our regional distribution centers, the timing and successful completions of acquisitions, construction schedules and the possibility that other cash requirements could result in delays or cancellations of capital spending. Periods of high inflation, 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. 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, and such expansion efforts may not be successful. Any business that we acquire may not perform as expected, and we may not realize the anticipated benefits of our acquisitions. The consummation of the merger with US Foods is subject to regulatory approval and the satisfaction of certain conditions, and we cannot predict whether the necessary conditions will be satisfied or waived and the requisite regulatory approvals received. Sysco and US Foods may be required to take certain actions to obtain regulatory approval for the merger, including the divestiture of assets, which could negatively impact the projected benefits of the merger. Termination of the merger agreement with US Foods could require Sysco to make a termination payment of $300 million, which could adversely impact Sysco's stock price, liquidity and financial condition. As a result of uncertainties surrounding the proposed merger, prospective suppliers and customers may delay or decline to enter into agreements with us, and we may also lose current suppliers and customers, and fail to retain key employees. The pending merger and our current pre-merger integration planning efforts may divert our management's attention from day-to-day business operations and the execution of our business transformation initiatives, which could result in performance shortfalls. Integration of the businesses of Sysco and US Foods may be more difficult, costly or time consuming than expected, and the merger may not result in any or all of the anticipated benefits, including cost synergies. We may fail to retain some of US Foods' vendors and customers after the proposed merger. Consummation of the merger will require Sysco to incur significant additional indebtedness, which could adversely impact our financial condition and may hinder our ability to obtain additional financing and pursue other business and investment opportunities. For a discussion of additional factors impacting Sysco's business, see the Company's Annual Report on Form 10-K for the year ended June 29, 2013, as filed with the Securities and Exchange Commission, and the Company's subsequent filings with the SEC, including our Registration Statement on Form S-4 filed with respect to our proposed merger with US Foods and the Company's Annual Report on Form 10-K that will be filed for the year ended June 28, 2014. Sysco does not undertake to update its forward-looking statements.

Additional Information for USF Stockholders

In connection with the proposed transaction, Sysco filed with the Securities and Exchange Commission ("SEC"), and the SEC declared effective on August 8, 2014, a Registration Statement on Form S-4 that includes a consent solicitation statement of USF that also constitutes a prospectus of Sysco. The mailing of the consent solicitation statement/prospectus to USF stockholders commenced on August 11, 2014. STOCKHOLDERS OF USF ARE URGED TO READ THE CONSENT SOLICITATION STATEMENT/PROSPECTUS CONTAINED IN THE REGISTRATION STATEMENT AND OTHER RELEVANT MATERIALS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY, BECAUSE THESE MATERIALS CONTAIN IMPORTANT INFORMATION. The consent solicitation statement/prospectus, Registration Statement and other relevant materials, including any documents incorporated by reference therein, may be obtained free of charge at the SEC's website at www.sec.gov or for free from Sysco at www.sysco.com/investors or by emailing investor_relations@corp.sysco.com. You may also read and copy any reports, statements and other information filed by Sysco with the SEC at the SEC public reference room at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at (800) 732-0330 or visit the SEC's website for further information on its public reference room.

This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

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CONTACT: For more information contact:
         
         Derrick Vializ
         Vice President, Investor Relations
         T 281-584-1308
         
         Charley Wilson
         Vice President, Corporate Communications
         T 281-584-2423