U.S. Foodservice profit rises 19%

4th-quarter income was $32 million

August 19, 1999|By Amanda J. Crawford | Amanda J. Crawford,SUN STAFF

U.S. Foodservice of Columbia reported yesterday net income of $32 million in its fiscal fourth quarter, 32 cents per diluted share, on record sales of $1.7 billion.

Income in the three months that ended July 3 rose 19 percent from $27 million, or 29 cents per share, in the fourth quarter of 1998. It reflected a one-time charge of $2.3 million, or 2 cents per share, related to the retirement of debt assumed with the December 1997 purchase of food service distributor Rykoff-Sexton Inc. of Wilkes-Barre, Pa.

Sales in the quarter were up 18 percent, from $1.5 billion a year ago.

Bonna Walker, vice president of marketing and public relations, said the company is "very pleased" with the quarter's results.

She said some of the profit resulted from "savings we're realizing with the acquisition of Rykoff-Sexton and the sale of redundant assets and noncore businesses."

U.S. Foodservice ended its fiscal year with sales of $6.2 billion, up 13 percent from $5.5 billion in 1998.

Net income rose to $83 million from a loss of $47 million in fiscal 1998. The 1998 loss reflected one-time charges of $109 million related to acquisitions.

Mark Husson, an analyst with Merrill Lynch Global Securities, said the quarter and year met expectations for sales and earnings.

"It was a tough year. They had to integrate Rykoff-Sexton systems and reorganize the product range Rykoff-Sexton had without upsetting the customers," he said. "But if you had to script what would have been a great year for this company, this year would have been it."

U.S. Foodservice shares closed yesterday at $18.75, down 75 cents.

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