<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549
                                   FORM 10-Q

(Mark One)

 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
     OF THE SECURITIES EXCHANGE ACT OF 1934

    For the quarterly period ended March 27, 1999

                                       OR

 (   )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
     OF THE SECURITIES EXCHANGE ACT OF 1934

    For the transition period from _______________to ______________


                        Commission File Number: 0-24954

                               U.S. Foodservice

            (Exact name of registrant as specified in its charter)

                         Delaware                      52-1634568
               (State or other jurisdiction of     (I.R.S. Employer
              incorporation or organization)       Identification No.)

                 9755 Patuxent Woods Drive                 21046
                     Columbia, Maryland                  (Zip Code)
              (Address of principal executive offices)

      Registrant's telephone number, including area code: (410) 312-7100

                                Not Applicable
                                --------------

             (Former name, former address and former fiscal year, 
                         if changed since last report)

    Indicate by check mark whether the registrant (1) has filed all reports
    required to be filed by Section 13 or 15(d) of the Securities Exchange Act
    of 1934 during the preceding 12 months (or for such shorter period that the
    registrant was required to file such reports), and (2) has been subject to
    such filing requirements for the past 90 days.

                Yes     X            No 
                   ---------           ---------     

    The number of shares of the registrant's common stock, par value $.01 per
    share, outstanding at May 6, 1999 was 49,588,321 shares.

                                       1
<PAGE>
 
                               U.S. FOODSERVICE
                                        
                                     INDEX
                                     -----


<TABLE>
<CAPTION>


Part I.     Financial Information                                                             Page No.
                                                                                              --------
<S>                           <C>                                                          <C>
            Item 1.              Financial Statements

                                 Condensed Consolidated Balance Sheets
                                   June 27, 1998 and March 27, 1999                                    3

                                 Condensed Consolidated Statements of Operations
                                   and Comprehensive Income (Loss)
                                   Three and Nine months ended March 28, 1998
                                   and March 27, 1999                                                  4

                                 Condensed Consolidated Statements of Cash Flows
                                   Nine months ended March 28, 1998
                                   and March 27, 1999                                                  5

                                 Notes to Condensed Consolidated Financial Statements                  6

            Item 2.              Management's Discussion and Analysis of Financial                    10
                                   Condition and Results of Operations

            Item 3.              Quantitative and Qualitative Disclosures About Market Risk           14


Part II.    Other Information 

            Item 6.              Exhibits and Reports on Form 8-K                                     15

            Signature                                                                                 16
</TABLE>

                                       2
<PAGE>
 
                        PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.

                       U.S. FOODSERVICE AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
<TABLE>
<CAPTION>


ASSETS                                             June 27,        March 27,
                                                     1998*           1999
                                                ---------------   ----------
                                                                  (Unaudited)  
<S>                                             <C>               <C>

 Current assets
 Cash and cash equivalents                          $   57,817    $   61,504
 Receivables, net                                      215,459       298,237
 Residual interest on accounts
  receivable sold                                      106,581        99,617
 Inventories                                           349,583       378,776
 Other current assets                                   28,548        32,165
 Deferred income taxes                                  39,294        37,009
                                                    ----------    ----------

   Total current assets                                797,282       907,308

Property and equipment, net                            437,265       443,157
Goodwill and other noncurrent assets                   583,244       625,745
                                                    ----------    ----------

   Total assets                                     $1,817,791    $1,976,210
                                                    ==========    ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
 Current maturities of long-term debt               $      604    $      643
 Current obligations under capital leases                6,933         5,407
 Accounts payable                                      381,151       334,103
 Accrued expenses                                      120,778       123,287
                                                    ----------    ----------

   Total current liabilities                           509,466       463,440

Noncurrent liabilities
 Long-term debt                                        650,679       688,255
 Obligations under capital leases                       29,946        27,165
 Deferred income taxes                                   6,064         6,015
 Other noncurrent liabilities                           36,916        99,997
                                                    ----------    ----------

   Total liabilities                                 1,233,071     1,284,872

Commitments and contingent liabilities

Stockholders' equity                                   584,720       691,338
                                                    ----------    ----------

Total liabilities and stockholders' equity          $1,817,791    $1,976,210
                                                    ==========    ==========

</TABLE>


      *  Amounts were derived from the Company's audited consolidated balance
sheet.


                    SEE ACCOMPANYING NOTES TO THE CONDENSED
                       CONSOLIDATED FINANCIAL STATEMENTS

                                       3
<PAGE>
 
                       U.S. FOODSERVICE AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                        AND COMPREHENSIVE INCOME (LOSS)
               (In thousands, except share and per share amounts)
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                         Three Months Ended                      Nine Months Ended
                                                    -----------------------------         ---------------------------------
                                                      March 28,         March 27,           March 28,            March 27,
                                                        1998              1999                1998                 1999
                                                    -----------       -----------         ------------          -----------
<S>                                              <C>              <C>                    <C>                  <C>
     Net sales                                       $ 1,338,138      $ 1,471,076         $  4,050,224          $ 4,482,535
     Cost of sales                                     1,090,012        1,197,795            3,289,355            3,657,195
                                                     -----------      -----------        -------------          -----------
     Gross profit                                        248,126          273,281              760,869              825,340
     Operating expenses                                  212,402          225,545              661,568              673,239
     Restructuring costs                                  15,678                                53,715
     Asset impairment                                      3,395                                35,530
     Amortization of intangible assets                     3,941            4,150               11,361               12,227
                                                     -----------      -----------        -------------          -----------

     Income (loss) from operations                        12,710           43,586               (1,305)             139,874
     Interest and other financing expenses                15,669           15,468               54,914               48,140
     Nonrecurring acquisition charges                                                           17,822
                                                     -----------      -----------        -------------          ------------

     Income (loss) before income taxes
          (benefit) and extraordinary charge              (2,959)          28,118              (74,041)              91,734
     Provision (benefit) for income taxes                    301           11,637               (9,950)              37,733
                                                     -----------      -----------        -------------          ------------
     Income (loss) before extraordinary charge            (3,260)          16,481              (64,091)              54,001
     Extraordinary charge, net of income
          tax benefit                                                                            9,712                2,748
                                                     --------         -----------        -------------          ------------
     Net income (loss) and comprehensive
          income (loss)                              $    (3,260)     $    16,481        $     (73,803)         $    51,253
                                                     ===========      ===========        =============          ============
     Basic earnings (loss) per common share:
          Before extraordinary charge                $     (0.07)     $       .34        $       (1.42)         $      1.14
          Extraordinary charge                                                                   (0.22)               (0.06)
                                                     -----------      -----------        -------------          ------------
     Basic earnings (loss) per common share          $     (0.07)     $       .34        $       (1.64)         $      1.08
                                                     ===========      ===========        =============          ============

     Basic weighted average common
          shares outstanding                          45,338,000       48,275,000           44,986,000           47,451,000


     Diluted earnings (loss) per common share:
          Before extraordinary charge                $     (0.07)     $       .34        $       (1.42)         $      1.13
          Extraordinary charge                                                                   (0.22)               (0.06)
                                                     -----------      -----------        -------------          ------------
     Diluted earnings (loss) per common share:       $     (0.07)     $       .34        $       (1.64)         $      1.07
                                                     ===========      ===========        =============          ============
     Diluted weighted average common
          shares outstanding                          45,338,000       48,968,000           44,986,000           48,122,000

</TABLE>



                    SEE ACCOMPANYING NOTES TO THE CONDENSED
                       CONSOLIDATED FINANCIAL STATEMENTS

                                       4
<PAGE>
 
                       U.S. FOODSERVICE AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                                                      Nine Months Ended
                                                                          -------------------------------------
                                                                                March 28,               March 27,
                                                                                 1998                     1999
                                                                          --------------            --------------
<S>                                                                      <C>                        <C>
Cash flows from operating  activities
   Net income (loss)                                                      $    (73,803)             $      51,253
   Adjustments to reconcile net income (loss)
    to net cash provided by (used in) operating activities:
       Depreciation and amortization                                            47,226                     44,495
       Write-off deferred financing costs                                        9,152                      1,247
       Asset impairment                                                         35,530
       Restructuring costs                                                      53,715
       Other adjustments                                                        (2,083)                     2,147
       Changes in working capital, net of effects
          from acquisitions                                                    (96,865)                   (79,871)
                                                                          ------------              -------------
Net cash provided by (used in) operating activities                            (27,128)                    19,271
                                                                          ------------              -------------

Cash flows from investing
   Additions to property and equipment                                         (76,230)                   (52,422)
   Cost of businesses acquired, net of cash acquired                           (48,903)                   (15,323)
   Proceeds from disposals of property                                          12,028                     12,699
   Proceeds from sale of manufacturing division assets                                                     20,755
   Other                                                                                                     (535)
                                                                          ------------              -------------
Net cash used in investing  activities                                        (113,105)                   (34,826)
                                                                          ------------              -------------
Cash flows from financing  activities
   Increase under revolving credit line                                                                   104,588
   Treasury stock purchases                                                    (12,417)
   Increase in long-term debt, net                                             108,031                    (93,689)
   Principal payments under capital lease obligations                           (4,547)                    (4,464)
   Financing costs                                                              (3,384)
   Proceeds from employee stock purchases                                       27,096                     10,137
   Other                                                                         4,946                      2,670
                                                                          ------------              -------------
Net cash provided by  financing activities                                     119,725                     19,242
                                                                          ------------              -------------
Net increase (decrease) in cash and cash equivalents                           (20,508)                     3,687

Cash and cash equivalents:
   Beginning of period                                                          74,432                     57,817
                                                                          ------------              -------------
   End of period                                                             $  53,924                   $ 61,504
                                                                          ============              =============

</TABLE>



                    SEE ACCOMPANYING NOTES TO THE CONDENSED
                       CONSOLIDATED FINANCIAL STATEMENTS

                                       5
<PAGE>
 
                       U.S. FOODSERVICE AND SUBSIDIARIES
                        NOTES TO CONDENSED CONSOLIDATED
                             FINANCIAL STATEMENTS
                                  (Unaudited)
                                        
NOTE 1 - BASIS OF PRESENTATION

The condensed consolidated financial statements of U.S. Foodservice and its
consolidated subsidiaries (the "Company") at March 27, 1999 and for the three-
month and nine-month periods ended March 28, 1998 and March 27, 1999 included
herein are unaudited, but include all adjustments (consisting only of normal
recurring entries) which the Company's management believes to be necessary for
the fair presentation of the financial position, results of operations and cash
flows of the Company as of and for the periods presented. Interim results are
not necessarily indicative of results that may be expected for the full year.

NOTE 2 - ACQUISITION OF RYKOFF-SEXTON, INC.

On December 23, 1997, Rykoff-Sexton, Inc. ("Rykoff-Sexton") was merged into a
wholly owned subsidiary of U.S. Foodservice (the "Acquisition"). The transaction
was accounted for under the pooling of interests method of accounting.  In
connection with the Acquisition, the Company incurred restructuring costs, asset
impairment charges, non-recurring charges and certain other operating charges
resulting from the integration of the two businesses during the fiscal year
ended June 27, 1998. These charges are further described as follows:

RESTRUCTURING COSTS - In connection with the Acquisition, the Company recorded a
$56.7 million restructuring charge during the fiscal year ended June 27, 1998.
Of this amount, the Company recognized $41.0 million in the quarter ended
December 27, 1997 and $15.7 million in the quarter ended March 28, 1998. The
restructuring costs consisted primarily of $26.8 million for change in control
payments to former executives of Rykoff-Sexton, $12.2 million for severance and
benefits, $10.8 million for future lease commitments and $6.9 million for idle
facility and facility closure costs related to the Company's plan to consolidate
and realign certain operating units and consolidate various overhead functions.

During the nine months ended March 27, 1999, the Company continued the
implementation of its restructuring plan initiated in December 1997.  The plan
included the closure of 13 distribution centers in 11 states and consolidation
of the operations of these centers with facilities in the same geographic
region.  As of March 27, 1999, consolidation of 11 of the distribution centers
was complete.  The Company expects that consolidation of the remaining two 
centers will be completed by the end of 1999.

During the nine months ended March 27, 1999, the Company expended $5.1 million
of costs for severance and benefits, $1.8 million of lease commitment costs and
$2.2 million of idle facility and facility closure costs.  At March 27, 1999,
$2.2 million of costs for severance and benefits, $8.6 million of lease
commitment costs and $3.0 million of idle facility and facility closure costs
have yet to be expended.   Of these amounts, the Company expects to expend $3.0
million during the remainder of fiscal 1999 and $5.4 million in fiscal 2000.
The remaining charges of $5.4 million relate primarily to losses on lease
commitments, the last of which expires in fiscal 2008.

ASSET IMPAIRMENT- During the fiscal year ended June 27, 1998, the Company
recognized non-cash asset impairment charges of $35.5 million.  Of this amount,
the Company recognized $32.1 million in the quarter ended December 27, 1997 and
$3.4 million in the quarter ended March 28, 1998.  Of these asset impairment
charges, $7.6 million related to the write-down to net realizable value of
buildings and improvements of nine owned facilities being closed; $3.1 million
related to the write-down to net realizable value of buildings which were held
for sale at the date of the Acquisition; $12 million related to costs deferred
for a new management information system was not placed in service as a result of
the Acquisition; and $12.8 million related to other long-term assets at
facilities being closed.

The Company does not expect to incur any additional restructuring costs, asset
impairment charges or transaction costs related to the Acquisition.  Any
additional operating costs related to the integration of the two businesses are
not expected to be material.

OTHER OPERATING CHARGES -  During the fiscal quarter ended March 28, 1998, the
Company charged $2.5 million to cost of goods sold and $3.8 million to operating
expense for write-downs of inventory, receivables and other current assets
resulting from the operating unit consolidation and realignment during fiscal
1998.  The charges related principally to receivable write-offs resulting from
the rationalization of customer and vendor relationships and inventory write-
downs resulting from the reductions in the number of products distributed by the
combined company following the Acquisition, particularly at divisions being
closed and consolidated.

                                       6
<PAGE>
 
NOTE 3 - PRIOR RESTRUCTURING COSTS

In connection with its acquisition of US Foodservice Inc. on  May 17, 1996,
Rykoff-Sexton recorded a restructuring charge of $57.6 million ($35.7 million
after tax) in the transition period ended June 29, 1996. Approximately $10.7
million of the charge related to severance and termination benefit costs, $20.2
million related to lease-related costs and $26.7 million related to other exit
costs, including the closure of duplicate facilities and other integration
activities.  During the nine months ended March 27, 1999, the Company expended
$0.1 million of costs for severance and benefits, $1.2 million for lease
commitment costs and $0.6 million for other exit costs.  At March 27, 1999,
$0.9 million of costs for severance and benefits, $11.3 million of lease
commitment costs and $2.4 million of other exit costs have yet to be expended.
The Company expects these expenditures to occur at the rate of approximately $2
million per year for fiscal 1999 and the next three fiscal years and $1 million
per year for the following seven fiscal years.

NOTE 4 - EXTRAORDINARY CHARGES

During the fiscal quarter ended December 26, 1998, the Company recorded an
extraordinary charge of $2.7 million (net of a $1.8 million income tax benefit)
related to the redemption and retirement of $75.1 million of 8 7/8% Senior
Subordinated Notes due 2003.  The extraordinary charge consisted of a $3.3
million redemption premium paid to note holders and the write-off of $1.2
million of unamortized deferred financing costs.

On December 23, 1997, in connection with the consummation of the Acquisition,
the Company entered into a new bank credit facility which provided for a $550
million five-year revolving credit facility and a $200 million revolver/term
loan facility (collectively the "New Credit Facility").  During the fiscal
quarter ended December 27, 1997, the Company applied the proceeds of the New
Credit Facility to refinance substantially all of its indebtedness in order to
lower significantly its overall borrowing costs.  As a result of this re-
financing, the Company recorded an extraordinary charge of $9.7 million (net of
$6.3 million income tax benefit) related to the write-off of deferred financing
costs with respect to the extinguished debt and additional payments to holders
of the Company's senior notes due 2004 in accordance with the senior note terms.

NOTE 5 - OUTSOURCING OF THE MANUFACTURING DIVISION

On August 28, 1998, the Company sold the inventory and fixed assets of its
manufacturing division to a third party.  In connection with the sale, the
Company entered into a six-year supply agreement.  Under the terms of the sale
and supply agreements, the Company received $85 million in cash and a $16
million subordinated note from the buyer bearing interest at 13% per year and
payable in August 2006. Interest on the note payable is payable in additional
notes through August 2005 and thereafter in cash. The assets transferred had a
net book value of approximately $20 million, including $10.8 million in
inventories. Costs to complete the transaction were approximately $3 million.
Net gain on the sale of assets and proceeds from entering into the supply
agreement aggregated approximately $78 million.

The supply agreement establishes minimum purchase obligations by the Company for
each of the next six years.   First year minimum purchase obligations are based
on purchase levels prior to the sale, with the succeeding years' purchase
obligations increasing at a rate of 6% per year.  Based on current product
prices, the supply agreement obligates the Company to purchase in excess of $750
million of products over the next six years.  The Company may incur substantial
penalties if it does not purchase the minimum product quantities specified in
the agreement.

As a result of the Company's significant continuing involvement in the
manufacturing business, $62 million of the gain is being deferred and recognized
over the life of the supply agreement as goods are purchased from the
manufacturing business and sold to the Company's foodservice customers.  The
balance of the gain, including interest attributable to the subordinated note
receivable, will not be recognized until such time as the buyer has sufficient
cash flows to demonstrate payment of the principal and interest.

NOTE 6 - ACQUISITIONS

HAAR - Effective October 23, 1998, the Company completed the acquisition of J.H.
Haar & Sons, L.L.C. ("Haar"), a broadline foodservice distributor serving the
New York City metropolitan market.  Annual sales for Haar for its fiscal year
ended September 30, 1998 totaled $57 million.  Under the terms of the
acquisition agreement, the Company acquired all of the membership interests of
Haar in exchange for 550,543 shares of the Company's common stock.  The
transaction was accounted for as a pooling of interests.  Due to the fact that
total assets, net assets and the results of operations were not material to the
Company for any of the prior years, the transaction was recorded as of September
27, 1998.

                                       7

<PAGE>
 
WEBB - Effective November 16, 1998, the Company completed the acquisition of
Joseph Webb Foods, Inc ("Webb"), a broadline foodservice distributor serving
the San Diego and other Southern California markets. Under the terms of the
acquisition agreement, the Company acquired 100% of the stock of Webb for
896,057 shares of the Company's common stock and $8.0 million in cash, including
transaction costs.  In addition, the agreement includes a provision for future
stock payments to the selling shareholders contingent upon achievement of future
sales performance targets.  The transaction was accounted for as a purchase.

OTHER - During fiscal 1998, the Company acquired Outwest Meat Company
("Outwest"), Sorrento Food Service, Inc. ("Sorrento") and Westlund Provisions,
Inc. ("Westlunds").

The tables below set forth pro forma information for the three-month period 
ended March 28, 1998 and the nine-month periods ended March 28,
1998 and March 27, 1999 giving effect to the acquisitions of Haar, Webb,
Outwest, Sorrento and Westlunds as if such acquisitions had been consummated as
of June 28, 1997:


<TABLE>
<CAPTION>
                                   Three Months Ended     Nine Months Ended
                                  ------------------- ------------------------
<S>                                  <C>              <C>         <C>
                                                  (In thousands)
                                        March 28,     March 28,     March 27,
                                          1998          1998           1999
                                        ----------    ----------    ----------

Net sales                               $1,415,856    $4,344,941    $4,565,010

Income (loss) before
  extraordinary charges                 $   (2,668)   $  (63,176)   $   52,639

Net income (loss)                       $   (2,688)   $  (72,888)   $   49,891

Income (loss) per common share
   before extraordinary charge
   Basic                                $    (0.06)   $    (1.35)   $     1.11
   Diluted                              $    (0.06)   $    (1.35)   $     1.09

Net income (loss) per common share
   Basic                                $    (0.06)   $    (1.56)   $     1.05
   Diluted                              $    (0.06)   $    (1.56)   $     1.04

</TABLE>

NOTE 7 - RECENTLY ENACTED ACCOUNTING PRONOUNCEMENTS

During the fiscal quarter ended September 26, 1998, the Company adopted
Statement of Financial Accounting Standard (SFAS) No. 130, Reporting
Comprehensive Income.  Adoption had no impact on the Company's condensed
consolidated financial statements, as comprehensive income (loss) and net income
(loss) were the same.

NOTE 8 - CONTINGENCIES

From time to time, the Company is involved in litigation and proceedings arising
out of the ordinary course of business.  There are no pending material legal
proceedings or environmental investigations to which the Company is a party or
to which the property of the Company is subject as of the date of this report.

                                       8
<PAGE>
 
NOTE 9  EARNINGS PER SHARE

The following table reconciles the numerators and denominators of the Company's
basic and diluted earnings per share (EPS) computations for income before
extraordinary charge (in 000's):

<TABLE>
<CAPTION>


                                           Quarter Ended March 28, 1998               Quarter Ended March 27, 1999
                                    ----------------------------------------    ---------------------------------------
                                     Income (loss)   Shares                     Income (loss)    Shares
                                     Numerator     Denominator   Per Share      Numerator     Denominator   Per Share
                                    -------------   -----------   ----------    ------------  ------------  ---------
<S>                                 <C>             <C>           <C>          <C>             <C>           <C>
Basic EPS
Income (loss) before
    extraordinary charge                $ (3,260)        45,338      $(0.07)        $16,481         48,275      $0.34

Effect of Dilutive Securities
Warrants                                                                                                52
Common stock options                                                                                   565
Other stock-based compensation
    arrangements                                                                                        76

Diluted EPS
Income (loss) before                     --------    ----------                -------------  ------------
    extraordinary charge                $ (3,260)        45,338      $(0.07)   $     16,481         48,968      $0.34
                                        ========    ===========                ============    ===========




                                        Nine Months Ended March 28, 1998           Nine Months Ended March 27, 1999
                                    --------------------------------------    ----------------------------------------
                                     Income (loss)    Shares                   Income (loss)     Shares
                                     Numerator      Denominator   Per Share    Numerator       Denominator   Per Share
                                    ------------    -----------   ---------    ------------    -----------   ---------
Basic EPS
Income (loss) before
    extraordinary charge                $(64,091)        44,986      $(1.42)   $   54,001         47,451       $1.14

Effect of Dilutive Securities
Warrants                                                                                                61
Common stock options                                                                                   572
Other stock-based compensation
    arrangements                                                                                        39

Diluted EPS
Income (loss) before                    --------    ----------                 -----------     -----------
    extraordinary charge                $(64,091)        44,986      $(1.42)   $    54,001          48,122       $1.13
                                        ========    ===========                ============    ===========

</TABLE>

The effect of stock options outstanding during fiscal 1998 were not included in
the computation of diluted EPS because the effect would have been anti-dilutive.


                                       9
<PAGE>
 
Item 2.     Management's Discussion and Analysis of Financial Condition and
            Results of Operations

This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934.  All statements regarding the Company's expected financial position and
operating results, its business strategy, its financing plans, its ability to
realize anticipated cost savings and other benefits from acquisitions and its
ability to recover acquisition-related costs are forward-looking statements.
These statements are subject to risks and uncertainties that could cause the
Company's actual results to differ materially.  Such risks and uncertainties
include the sensitivity of the Company's business to national and regional
economic conditions, the effects of inflation and deflation in food prices, the
highly competitive markets in which the Company operates and the Company's
ability to consummate additional acquisitions and to integrate acquired 
businesses.  The Company's Annual Report on Form 10-K for the fiscal year ended
June 27, 1998, filed with the Securities and Exchange Commission on September
24, 1998, and amended on January 14, 1999, discusses some of the important
factors that could cause the Company's actual results to differ materially from
those in such forward-looking statements.

Overview
--------
Effective December 23, 1997, Rykoff-Sexton was merged into a wholly owned
subsidiary of U.S. Foodservice (the "Acquisition"). The transaction was
accounted for under the pooling of interests method. In connection with the
Acquisition, management of the combined companies developed a restructuring plan
that included the consolidation of duplicate distribution centers and the
centralization of certain general and administrative functions. The Company
planned to close 13 distributions centers located in California, Florida, Iowa,
Maryland, Massachusetts, Minnesota, Missouri, Nevada, Ohio, Pennsylvania and
Virginia. The Company incurred restructuring costs, asset impairment charges,
transaction costs and certain other operating charges resulting from the
integration of the two businesses (the "Acquisition Related Costs") which
significantly affected the Company's results for fiscal 1998. The Acquisition
Related Costs totalled $138.0 million. Of the total Acquisition Related Costs
recognized during fiscal 1998, $76.6 million consisted of non-cash charges. Of
the cash charges, $38.5 million was expended in fiscal 1998 and $9.1 million in
the nine months ended March 27, 1999. As of March 27, 1999, consolidation of 11
of the distribution centers was complete. The Company expects that consolidation
of the remaining two centers will be completed by the end of 1999.

Virtually all of the corporate overhead functions have been consolidated as of
March 27, 1999.  As of this date, the following costs have yet to be expended:
$2.2 million of costs for severance and benefits; $8.6 million of lease
commitment costs; and $3.0 million of idle facility and facility closure costs.
Management anticipates that $3.0 million will be expended in the balance of
fiscal 1999 and $5.4 million in fiscal 2000.  The remaining cash outlays of $5.4
million relate primarily to losses on lease commitments, the last of which
expires in fiscal 2008.

The Company is funding these expenditures through, among other things,
realization of cost savings resulting from the integration of the two
businesses, proceeds from the disposition of closed facilities and income tax
benefits.  To date, the Company has experienced no significant changes in the
restructuring plan.  The Company does not expect to incur any additional
restructuring costs, asset impairment charges or transaction charges with
respect to the Acquisition.  Any additional operating costs related to the
integration of the two businesses are not expected to be material.

In connection with the integration plan for the combination of the two
businesses, the Company expected to realize operating cost and interest savings
of $19 million in fiscal 1998, $30 million in fiscal 1999 and $40 million in
fiscal 2000 and thereafter.  The Company believes that operating cost and 
interest savings exceeded $20 million in fiscal 1998 and $28 million in the
first three quarters of fiscal 1999. The Company achieved operating cost savings
through the consolidation and re-negotiation of purchasing programs,
consolidation and realignment of distribution facilities and consolidation of
general and administrative functions. Interest savings were realized through the
refinancing of the Company's senior debt. Based on the results for fiscal 1998
and the first three quarters of fiscal 1999 and the status of the integration
plan, the Company believes it can achieve the costs savings estimated for fiscal
1999 and subsequent periods.

                                       10
<PAGE>
Results of Operations
--------------------- 

Net Sales
---------
The Company's net sales of $1.5 billion for the three months ended March 27,
1999 (the "1999 fiscal quarter") represented a 9.9% increase from the $1.3
billion net sales level achieved for the three months ended March 28, 1999 (the
"1998 fiscal quarter").   For the nine months ended March 27, 1999 (the "1999
fiscal nine-month period"), net sales increased 10.7% to $4.5 billion from $4.0
billion for the nine months ended March 28, 1998 (the "1998 fiscal nine-month
period").  The acquisitions of Outwest Meat Company ("Outwest") in the second
quarter of fiscal 1998, Sorrento Food Service, Inc. ("Sorrento") and Westlund
Provisions, Inc. ("Westlund") in the third quarter of fiscal 1998, and J.H. Haar
& Sons, L.L.C. ("Haar") and Joseph Webb Foods, Inc. ("Webb") in the second
quarter of fiscal 1999 accounted for approximately 50.0% of the sales growth for
the 1999 fiscal quarter and 1999 fiscal nine-month period.

Growth in both multi-unit "chain" account sales and independent "street" sales
contributed to the remaining increase in sales. Chain account sales increased
17.2% in the 1999 fiscal quarter and 16.3% in the 1999 fiscal nine-month
period. This increase was attributable to the addition of new chain businesses 
and to the expansion of sales to existing chain customers resulting from the
national distribution capability created through the Acquisition. Street sales
increased 5.5% in the 1999 fiscal quarter and 7.1% in the 1999 fiscal nine-
month period principally as a result of the growth of the street sales force and
improved sales force productivity. Because chain sales grew at a faster rate
than street sales, the street sales mix, or street sales as a percentage of
total net sales, decreased to 59.7% in the 1999 fiscal quarter from 62.2% in the
1998 fiscal quarter.

Gross Profit
------------
The Company's gross profit margin decreased to 18.6% in the 1999 fiscal quarter
and to 18.4% in the 1999 fiscal nine-month period from a gross profit margin,
prior to the Acquisition Related Costs, of 18.7% in the 1998 fiscal quarter and
19.0% in the 1998 fiscal nine-month period.  The decrease was primarily
attributable to a continuing shift in product mix from certain high-margin items
to higher turnover, lower-margin items, primarily "center-of-the-plate" entree
products in the former Rykoff-Sexton operations, and to an increase in chain
sales as a percentage of net sales in the 1999 fiscal quarter and 1999 fiscal
nine-month period.

Operating Expenses
------------------
Operating expenses increased by 6.2% ($13.1 million) in the 1999 fiscal quarter
and by 1.8% ($11.7 million) in the 1999 fiscal nine-month period over the
corresponding periods in 1998.

Excluding the effects of the Acquisition Related Costs, operating expenses
increased by 8.1% ($16.9 million) in the 1999 fiscal quarter and by 4.8% ($31.1
million) in the 1999 fiscal nine-month period over the corresponding periods in
1998, and as a percentage of net sales, decreased to 15.3% in the 1999 fiscal
quarter from 15.6% in the 1998 fiscal quarter and to 15.0% in the 1999 fiscal
nine-month period from 15.9% in the 1998 fiscal nine-month period.  These
decreases were primarily attributable to operating efficiencies resulting from
the Acquisition restructuring plan, cost reductions achieved through the
consolidation of the Company's general and administrative functions, and an
increase in the average size of customer deliveries resulting from the shift in
sales mix to increased chain account sales and in product mix to "center-of-the-
plate" entree products.

Amortization of Goodwill and Other Intangible Assets
----------------------------------------------------
Amortization of goodwill and other intangible assets was $4.1 million in the
1999 fiscal quarter compared to $3.9 million in the 1998 fiscal quarter and
$12.2 million in the 1999 fiscal nine-month period compared to $11.3 million in
the 1998 fiscal nine-month period. These increases were attributable to the
goodwill arising from the Sorrento, Westlunds and Webb acquisitions.

Restructuring Costs and Asset Impairment
----------------------------------------
The Acquisition Related Costs in the 1998 fiscal quarter included a
restructuring charge of $15.7 million, of which $1.4 million constituted non-
cash charges.  These costs consisted primarily of change in control payments
made to former executives of Rykoff-Sexton and severance, idle facility and
facility closure costs related to the Company's plan to consolidate and realign
certain operating units and consolidate various overhead functions.

The Acquisition Related Costs in the fiscal 1998 quarter also included non-cash
asset impairment charges of $3.4 million. These charges were related to write-
downs to net realizable value of assets and facilities at operating units that
are being consolidated or realigned and assets related to management information
systems which are being replaced and not currently utilized.

                                       11
<PAGE>
 
Income (loss) from Operations
-----------------------------
Income from operations was $43.6 million in the 1999 fiscal quarter compared to
income from operations of $12.7 million in the 1998 fiscal quarter.  Income from
operations was $139.9 million in the 1999 fiscal nine-month period compared to a
loss of $1.3 million in the 1998 fiscal nine-month period. Excluding the
Acquisition Related Costs, income from operations increased 14.4% ($5.5 million)
in the 1999 fiscal quarter from the 1998 fiscal quarter and 20.7% ($24.0
million) in the 1999 fiscal nine-month period from the 1998 fiscal nine-month
period.  The increases in both periods were attributable to the increase in net
sales and the reduction of operating expenses as a percentage of net sales.

Interest Expense and Other Financing Costs, Net
-----------------------------------------------
Interest expense and other financing costs decreased $0.2 million or 1.3% in
the 1999 fiscal quarter and $6.8 million or 12.3% in the 1999 fiscal nine-month
period from the corresponding periods in fiscal 1998. The reduced interest
expense was primarily attributable to lower overall interest rates under the
credit facility established in connection with the Acquisition.

Non-Recurring Charges
---------------------
The Company incurred non-recurring charges of $17.8 million in the second
quarter of 1998.  These charges principally related to fees for financial
advisory, legal and accounting and other professional services incurred by both
companies to consummate the Acquisition.

Provision (Benefit) for Income Taxes
-------------------------------------
During the 1999 fiscal quarter and the 1999 fiscal nine-month period, the
Company recognized income tax expense at effective rates of 41.3% and 41.1%,
respectively, as compared to (10.2)% and (13.4)%, respectively, for the
corresponding periods in the prior year. The prior year rates reflect the effect
on the income tax provision of the tax deductibility of certain of the
Acquisition Related Costs and the amortization of goodwill. The Company's
effective tax rate before the effect of the Acquisition Related Costs was 40.9%
for the 1998 fiscal quarter and 41.2% for the 1998 fiscal nine-month period.

Extrarodinary Charges
---------------------
For the 1999 fiscal nine-month period, the Company recorded extraordinary
charges of $2.7 million (net of a $1.8 million income tax benefit) related to
the redemption and retirement of $75.1 million 8 7/8% Senior Subordinated Notes
due 2003. The extraordinary charge consisted of a $3.3 million redemption
premium paid to note holders and the write-off of $1.2 million of unamortized
deferred financing costs. For the 1998 fiscal nine-month period, the Company
recorded extraordinary charges of $9.7 million (net of a $6.3 million income tax
benefit) related to the write-off of deferred financing costs associated with
extinguished debt and to the additional payments to holders of the Company's
senior notes due 2004 in accordance with the senior note terms.

Liquidity and Capital Resources
-------------------------------
As of March 27, 1999, the Company's total long-term indebtedness, including
current portion, was $721.5 million, with an overall weighted average interest
rate of 6.24% (excluding deferred financing costs).  Long-term borrowings
increased by $6.4 million during the 1999 fiscal nine-month period primarily as
a result of capital expenditures of $52.4 million and net cash of $15.3 million
used in acquisitions.  These uses of cash were offset in part by net cash
provided by operating activities of $19.3 million and the receipt of $43.6
million of net cash proceeds from the sale of assets and employee stock
purchases.

The Company's working capital balance (excluding current portion of long-term
debt) of $449.9 million at March 27, 1999 increased by $154.6 million from the
balance at June 27, 1998.  The higher working capital balances were primarily
attributable to increased net sales and seasonal increases in inventory and
receivables and a reduction of accounts payable.

The Company made $52.4 million of capital expenditures in the 1999 fiscal nine-
month period, primarily for facility expansion projects and the upgrading of
management information systems. During the 1999 fiscal nine-month period, the
Company realized $12.7 million from the sale of redundant facilities. The
Company estimates that assets held for sale at March 27, 1999 will generate
proceeds of in excess of $17 million.

From time to time, the Company acquires other foodservice businesses.  Any such
business may be acquired for cash, common stock of the Company, or a combination
of cash and common stock.

As of March 27, 1999, $576.7 million of borrowings and $35.3 million of letters
of credit were outstanding under the Company's credit facility and an additional
$137.9 million remained available to finance the Company's working capital needs
and to meet the Company's other liquidity requirements.   The Company also has
an uncommitted line of credit with a financial institution available for short-
term borrowings not to exceed $30 million.  The Company had $30 million
outstanding under this line of credit 

                                       12
<PAGE>
 
at March 27, 1999. At December 31, 1998, the Company increased the capacity of
its existing $250 million revolving securitization arrangements for accounts
receivable to $353 million. As of March 27, 1999, the Company was utilizing
$325 million of this capacity. 

On April 7, 1999 the Company received $48.5 million of net proceeds from the
sale of 1.17 million shares of common stock in a public offering. The Company
applied these proceeds to repay borrowings under its credit facility. On May 7,
1999, the Company will redeem the remaining $54 million of 8 7/8% Senior
Subordinated Notes due 2003 at a redemption price equal to par plus 4.44%.

The Company believes that the combination of the cash flow generated from
operations, additional leasing activity, sales of duplicate assets and
borrowings under the credit facility will be sufficient to enable it to finance
its growth and meet its currently projected capital expenditures and other
liquidity requirements for at least the next twelve months.



Information Systems and the Impact of the Year 2000
---------------------------------------------------

The Year 2000 issue results from a programming convention in which computer
programs use two digits rather than four to define the applicable year.
Software and hardware may recognize a date using "00" as the year 1900, rather
than the year 2000.  Such an inability of computer programs to recognize a year
that ends with "00" could result in system failures, miscalculations or errors
causing disruptions of operations or other business problems, including, among
others, a temporary inability to process transactions, send invoices or engage
in similar normal business activities.

The Company's Program.  The Company has undertaken a program to address the Year
2000 issue with respect to the following:  (i) the Company's information
technology and operating systems, including its billing, accounting and
financial reporting systems; (ii) the Company's non-information technology
systems, such as buildings, plant, equipment, telephone systems and other
infrastructure systems that may contain embedded microcontroller technology;
(iii) selected systems of the Company's major vendors and material service
providers insofar as such systems relate to the Company's business activities
with such parties; and (iv) the Company's signficant customers insofar as the
Year 2000 issue relates to the Company's ability to provide services to such
customers.  As described below, the Company's Year 2000 program involves (i) an
assessment of the Year 2000 problems that may affect the Company, (ii) the
development and testing of remedies to address the problems discovered in the
assessment phase, and (iii) the preparation of contingency plans to deal with
worst case scenarios.

Assessment Phase.  To determine the extent to which its internal systems are
vulnerable to the Year 2000 issue, the Company is currently evaluating the
systems that are date sensitive, including its internal systems and the systems
of its major vendors and significant sevice providers and customers.  The
Company has completed its evaluation of its internal systems.  The Company's 38
full-service distribution centers, three specialty products and equipment and
supply warehouses, and corporate headquarters currently use various information
systems to process transactions and meet financial reporting needs.  Many of
these systems are not Year 2000 compliant.  As of April 30, 1999,
information systems used by 21 of the distribution centers and by one specialty 
products and equipment and supply warehouse were Year 2000 compliant. In
addition, during the third fiscal quarter, the Company completed the process of
sending letters to its major vendors and signficant service providers and
customers, requesting them to provide the Company with detailed, written
information concerning existing or anticipated Year 2000 compliance by their
systems insofar as the systems relate to such parties' business activities with
the Company. The Company is currently evaluating responses on Year 2000
compliance from the third parties who have responded to the Company's inquiries.
The Company expects that it will complete its assessment of all third-party
issues by June 30, 1999.

Remediation and Testing Phase.  The activities conducted during the remediation
and testing phase are intended to address potential Year 2000 problems in
internally-developed computer software and in the Company's other information
technology and non-information technology systems in an attempt to demonstrate
that this software will be made substantially Year 2000 compliant on a timely
basis.  In this phase, the Company has evaluated the program applications and
identified the Year 2000 problems and has substantially completed the
remediation of these problems. The Company is currently individually testing the
applications to confirm that the remediating changes are effective and have not
adversely affected the functionality of the applications.  The Company is
undertaking similar remediation and testing with respect to the hardware and
other equipment that runs or is run by the software.  After the individual
applications and system components have undergone remediation and testing
phases, the Company will conduct integrated testing for the purpose of
demonstrating functional integrated systems operation.  Following completion of
its internal, integrated systems testing, the Company intends to conduct
laboratory-simulated integrated systems testing in an attempt to demonstrate
substantial Year 2000 compliance of the Company's systems as they interface with
external systems and equipment of the Company's major vendors and significant
service providers and customers.

During fiscal 1998, among other activities, the Company replaced information
processing systems, consisting of hardware and software, at five distribution
centers, initiated software remediation efforts at 15 distribution centers, and
installed new payroll and human resources information systems at 33 distribution
centers and its corporate headquarters.  As of the date of this report, the
Company has substantially completed software and hardware remediation efforts 
at the remaining distribution centers and its corporate headquarters. The
Company currently seeks to have all of its information systems at its
distribution centers and its corporate headquarters Year 2000 compliant by July
1999.

                                       13
<PAGE>
 
Contingency Plans.  The Company is developing contingency plans to handle its
most reasonably likely worst case Year 2000 scenarios, which it has not yet
identified fully.  The Company intends to complete its determination of worst
case scenarios after it has received and analyzed responses to substantially all
of the inquiries it has made of third parties.  The Company intends to complete 
development of its contingency plans by June 30, 1999.

Costs Related to the Year 2000 Issue.  As of March 27, 1999,  the Company has
incurred approximately $2.0 million in costs for its Year 2000 program.  Such
costs do not include internal staff costs, consisting principally of payroll
costs, incurred on Year 2000 matters, because the Company does not separately
track these internal staff costs.   As of March 27, 1999, the Company has also
made approximately $12.5 million of capital expenditures on new information
processing systems that are already Year 2000 compliant.  The Company currently
estimates that it will incur additional costs, which are not expected to exceed
approximately $4.0 million, excluding internal staff costs, to complete its Year
2000 compliance work with respect to the Company's major information systems.
Of such additional costs, approximately $1.0 million of costs are expected to be
incurred during fiscal 1999 and approximately $3.0 million of costs are expected
to be incurred during fiscal 2000.  These costs will be expensed as incurred.
Actual costs may vary from the foregoing estimates based on the Company's
evaluation of responses to its third-party inquiries and on the results of its
remediation and testing activities.  The Company expects to fund its Year 2000
remediation costs out of the cash flows generated by its operations.  The
Company has not deferred any of its material information technology projects to
date as a result of the Year 2000 issue.  The Company currently believes that
the costs to resolve compliance issues with respect to other information systems
and its non-information technology systems will not be material.

Risks Related to the Year 2000 Issue.  Although the Company's Year 2000 efforts
are intended to minimize the adverse effects of the Year 2000 issue on the
Company's business and operations, the actual effects of the issue and the
success or failure of the Company's efforts described above cannot be known
until the year 2000.  Failure by the Company and its major vendors and
significant service providers and customers to address adequately their
respective Year 2000 issues in a timely manner, insofar as such issues relate to
the Company's business, could have a material adverse effect on the Company's
business, results of operations and financial condition.

Changes in Accounting Standards
-------------------------------
During 1997 and 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard (SFAS) No. 130, Reporting Comprehensive Income,
SFAS No. 131, Disclosures About Segments of an Enterprise and Related
Information, and SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activity.  SFAS No. 130 and 131 generally require additional financial statement
disclosure.  SFAS No. 133 establishes accounting and reporting standards for
derivative instruments and for hedging activities and requires that an entity
recognize all derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value.  The Company adopted SFAS No. 130
during the first quarter of fiscal 1999 and will adopt SFAS No. 131 during
fiscal 1999 and SFAS No. 133 during fiscal 2000, in accordance with the
pronouncements.  The Company is currently evaluating the impact, if any, that
SFAS No. 133 will have on its consolidated financial statements.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

The Company's major market risk exposure is to changing interest rates.  The
Company's policy is to manage interest rates through the use of a combination of
fixed and floating rate debt.   The Company uses interest rate swap, cap and
collar contracts to manage its exposure to fluctuations in interest rates on
floating long-term debt.  Certain management monitoring processes are designed
to minimize the impact of sudden and sustained changes in interest rates.  As of
March 27, 1999, the Company's long-term indebtedness consists of fixed rate and
variable rate debt of $55.6 million and $632.7 million, respectively.
Substantially all of the Company's floating rate debt is based on LIBOR.  The
Company has effectively capped its interest rate exposure at 7.85% on
approximately $400.0 million of its floating rate debt through June 30, 1999.
In addition, U.S. Foodservice has capped its interest exposure on an additional
$129 million of floating rate debt at 8.875% through November 1, 2003.

U.S. Foodservice sells accounts receivable on a revolving basis under accounts
receivable securitization agrrangements. In the 1999 fiscal quarter, U.S.
Foodservice increased the maximum amount of receivables eligible for sale under
these arrangements from $250 million to $353 million. The proceeds received from
sales of receivables under these arrangements, which are accounted for under
SFAS No. 125, are based to a large extent on LIBOR. The Company also uses fixed-
rate capital leases to finance certain of its trucks and trailers.

Currently, the Company does not use foreign currency forward contracts or
commodity contracts and does not have any material foreign currency exposure.

                                       14
<PAGE>
 
                           PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K.

         (a) The Company files herewith the following exhibits:

           *3       Amended and Restated By-Laws of the Company.

            10.1.1  Amendment No. 5 to Rights Agreement, dated as of March 25,
                    1999, between the Company and The Bank of New York, as
                    Rights Agent. Filed as Exhibit 4.1 to the Company's
                    Current Report on Form 8-K filed on March 26, 1999 and 
                    incorporated herein by reference.

            10.1.2  Amendment No. 6 to Rights Agreement, dated as of April 22,
                    1999, between the Company and The Bank of New York, as
                    Rights Agent. Filed as Exhibit 4.1 to the Company's Current
                    Report on Form 8-K filed on April 22, 1999 and incorporated
                    herein by reference.

           *10.2    U.S. Foodservice 1998 Stock Option and Incentive Plan.

           *10.3    Description of Material Terms for Payment of Annual
                    Executive Incentive Compensation.

           *10.4    First Amendment to Certain Operative Agreements dated as of
                    January 21, 1999 by and among JP Foodservice Distributors,
                    Inc., the Guarantors referenced therein, First Security
                    Bank, National Association, as Owner Trustee, the various
                    banks and other lending institutions parties thereto, as
                    Holders and Lenders, and First Union National Bank, as
                    Agent.

           *27      Financial Data Schedule.
_______________________
           * Filed herewith.


            (b) The following Current Report on Form 8-K was filed by the
                Company during the period covered by this report:


              Date of Report                  Item Reported
              --------------                  -------------
 
1.            March 26, 1999       Item 5 (Amendment No. 5 to Rights Agreement)
 
    
                                       15
<PAGE>
 
                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                U.S. FOODSERVICE
                                (Registrant)



DATE:  May 10, 1999             /s/ George T. Megas
                                --------------------------------------
                                George T. Megas, Senior Vice President
                                and Chief Financial Officer
                                (Duly Authorized Officer and Principal
                                      Financial Officer)

                                       16