HOUSTON, Nov. 2, 2009 (GLOBE NEWSWIRE) -- Sysco Corporation (NYSE:SYY) today announced financial results for its 13-week first quarter ended September 26, 2009.

   First Quarter Fiscal 2010 Highlights
 * Sales were $9.1 billion, a decrease of 8.1% from $9.9 billion in
   the first quarter of fiscal 2009.
 * Operating income was $497 million, a decrease of 1.5% compared
   to $505 million in last year's first quarter.
 * Operating margin was 5.5%, an increase of 0.4 points from the
   prior year.
 * Diluted earnings per share (EPS) was $0.55, an increase of 19.6%
   compared to $0.46 in last year's first quarter.
 * The first quarter results benefited from a $0.04 per share
   impact from the change in the value of corporate owned life
   insurance (COLI), and a $0.05 per share impact from the
   company's IRS settlement which was previously announced in
   August 2009.

"I am pleased with our solid operating performance this quarter," said Bill DeLaney, Sysco's chief executive officer. "In the midst of what continues to be an extremely challenging business environment, our operating companies managed expenses extraordinarily well. Our sales decline was largely caused by the impact of reduced consumer spending experienced by much of our customer base, as well as significant food cost deflation. Looking forward, we are encouraged by the stabilization of our volume trends in recent weeks and we remain committed to supporting our customers through this most difficult period in our industry's history."

First Quarter Fiscal 2010 Summary

Sales for the first quarter were $9.1 billion, a decrease of 8.1% compared to the same period last year. Food cost deflation, as measured by the estimated change in Sysco's cost of goods, was 3.4% percent for the quarter. Sales from acquisitions (within the last 12 months) increased sales by 0.6%. The impact of changes in foreign exchange rates for the quarter reduced sales by 0.5%.

Operating expenses declined $132 million, or 9.5%, for the first quarter of fiscal 2010 compared to the prior year period. The decrease in operating expenses was primarily a result of declining payroll expense related to reduced headcount and lower incentive compensation, as well as a change in the value of COLI. These expense declines were partially offset by an increase in pension expense related to the company-sponsored pension plan, which was higher in the first quarter due to the impact of a market-related reduction in asset values underlying the plan. As a result, operating income fell 1.5% to $497 million during the first quarter.

Net earnings for the first quarter were $326 million, an increase of $49 million, or 17.8%, and diluted EPS was $0.55, an increase of $0.09, or 19.6%, compared to the prior year period. In addition to the items noted above, these results were favorably impacted by a one-time tax benefit related to the company's IRS settlement. The tax gain combined with non-taxable COLI gains favorably impacted the effective tax rate for the first quarter.

The impact of COLI, the IRS settlement and company-sponsored pension expense on Sysco's results of operations is outlined in the table below:

                                        Year-Over-Year Impact of
                                         Certain Expense Items -
                                             Better/(Worse)
                                      ----------------------------
                                      Operating    Net
 (000's)                               Income   Earnings     EPS
                                      ----------------------------
 Cash surrender value of COLI         $ 44,060  $ 44,060  $   0.07
 Tax settlement                              0    28,895  $   0.05
 Company-sponsored pensions            (10,428)   (7,307)   ($0.01)
                                      ----------------------------
 Net impact                           $ 33,632  $ 65,648  $   0.11
                                      ----------------------------

Capital Spending

Capital expenditures totaled $109 million for the first quarter. The primary areas for investments included facility replacements and expansions, technology, and additions and replacements to Sysco's fleet. Looking forward, the company projects fiscal 2010 capital expenditures will be in the range of $600 million to $650 million.

Conference Call & Webcast

Sysco's first quarter fiscal 2010 earnings conference call will be held on Monday, November 2, 2009 at 10:00 a.m. EST. A live webcast of the call, as well as a copy of this press release, will be available online at www.sysco.com in the Investor Relations 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 186 distribution facilities serving approximately 400,000 customers. For the fiscal year 2009 that ended June 27, 2009, the company generated more than $36 billion in sales. For more information about Sysco visit the company's Internet home page at www.sysco.com.

The Sysco Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=747

Forward-Looking Statements

Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They include statements regarding the apparent stabilization of volume trends and projections regarding capital expenditures. These statements involve risks and uncertainties and are based on management's current expectations and estimates; actual results may differ materially. Those risks and uncertainties that could impact sales volume include risks relating to sensitivity to general economic conditions, including the current economic environment and decreases in consumer spending; the risk of interruption of supplies due to lack of long-term contracts, severe weather, work stoppages or otherwise; and labor issues.