U.S. Foodservice profit up 23% in 3rd quarter

Columbia company attributes gains to greater efficiencies

April 27, 1999|By Ted Shelsby | Ted Shelsby,SUN STAFF

U.S. Foodservice Inc. reported yesterday that net income jumped 23 percent to $16.5 million in the third quarter, compared with $13.3 million during the same period a year ago.

The Columbia company said the results equaled 34 cents per share, compared with 29 cents per share in the 1998 quarter.

Sales rose 10 percent to $1.47 billion, up from $1.34 billion, in the same period last year.

Income from operations, which factor out acquisition-related costs, was up 14 percent in the quarter, to $38.1 million.

The company attributed much of the gain in net income to operating efficiencies and cost reductions realized from past acquisitions.

Jim Miller, the company's chairman and chief executive officer, said the disposal of unprofitable lines of business has reduced the company's internal growth rates by 2 percent to 3 percent.

"With these actions now behind us and our marketing programs in full swing, we are looking to very favorable sales trends as we head into the first quarter of fiscal 2,000," Miller said.

U.S. Foodservice is the nation's second-largest food distributor, supplying restaurants and institutional food service establishments.

Miller said the company continues to make progress on the disposal of redundant assets resulting from its $1.4 billion acquisition in late 1997 of Rykoff-Sexton Inc., based in Wilkes-Barre, Pa.

During the third quarter, Miller said, the company sold or sublet idle facilities in North Carolina and Massachusetts, resulting in a gain of $5.5 million.

U.S. Foodservice has also entered into agreements to dispose of other properties in Florida and California.

Its stock dropped $1.25 yesterday to close at $40.50.

Pub Date: 4/27/99

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