Tyson Foods, Inc. (NYSE: TSN), today reported the following
results:
(in millions, except per share data) |
Fourth Quarter |
12
Months |
|
2015 |
2014 |
2015 |
2014 |
Sales |
$ 10,506 |
$ 10,105 |
$ 41,373 |
$ 37,580 |
Operating Income |
550 |
306 |
2,169 |
1,430 |
|
|
|
|
|
Net Income |
259 |
136 |
1,224 |
856 |
Less: Net Income (Loss) Attributable to
Noncontrolling Interests |
1 |
(1) |
4 |
(8) |
Net Income Attributable to Tyson |
$ 258 |
$ 137 |
$ 1,220 |
$ 864 |
|
|
|
|
|
Net Income Per Share Attributable to
Tyson |
$ 0.63 |
$ 0.35 |
$ 2.95 |
$ 2.37 |
|
|
|
|
|
Adjusted¹ Sales |
$ 9,756 |
$ 9,780 |
$ 40,623 |
$ 37,255 |
|
|
|
|
|
Adjusted¹ Operating Income |
$ 568 |
$ 469 |
$ 2,253 |
$ 1,649 |
|
|
|
|
|
Adjusted¹ Net Income Per Share Attributable
to Tyson |
$ 0.83 |
$ 0.87 |
$ 3.15 |
$ 2.94 |
|
|
|
|
|
¹Adjusted sales, adjusted
operating income and adjusted net income per share attributable to
Tyson are explained and reconciled to a comparable GAAP measure at
the end of this release. Additionally, items reflected as adjusted
exclude the impact of the additional week in the fourth quarter and
12 months of fiscal 2015. |
Fourth Quarter Highlights
- Adjusted operating income up 21% to $568
million
- Record fourth quarter adjusted operating margin of
5.8%
- Cash flows from operations of $898
million
- Captured $98 million in total synergies
- Repurchased 5.9 million shares for $250 million,
excluding shares repurchased to offset dilution from our equity
compensation plan
Fiscal 2015 Highlights
- Record adjusted EPS of $3.15, an increase of 7% over
prior year
- Record adjusted sales of $40.6 billion, an increase of
9% over prior year
- Record adjusted operating income of $2.25 billion, an
increase of 37% over prior year
- Record cash flows from operations of $2.6
billion
- Captured $322 million in total synergies
"Fiscal 2015 was an important year for Tyson Foods, because it
proved that our house of brands gives us the ability to produce
record sales and earnings in less than optimum conditions, all
while successfully merging two large companies," said Donnie Smith,
president and chief executive officer of Tyson Foods, Inc.
"We achieved adjusted sales of more than $40 billion and
adjusted EPS of $3.15, generated free cash flow of more than $1.5
billion, reduced net debt by $1.7 billion, repurchased $250 million
of our stock in the fourth quarter and launched Ball Park® Jerky
and Hillshire® Snacking – two entirely new platforms for the
company," Smith said.
"We achieved $322 million in synergies for the fiscal year, and
we continue to see more synergy opportunities," he added. "We're
raising our synergy estimates for fiscal 2016 to more than $500
million, and we're raising our estimate for fiscal 2017 to more
than $700 million. The additional synergies will allow for more
investment in innovation, new product launches and the
strengthening of our brands.
"Our business model is working. The Prepared Foods segment had a
very strong performance in the first full year of Tyson and
Hillshire coming together. The Chicken segment had an outstanding
year. Pork produced solid results. Beef experienced a tough
operating environment most of fiscal 2015, but the other segments
more than made up for it.
"We're expecting another record year in fiscal 2016. Our
projections indicate adjusted EPS of $3.50 to $3.65, consistent
with our goal of averaging at least 10% annual EPS growth over
time. We plan to continue repurchasing our shares; in fact, we've
already bought back $200 million of our stock so far in the first
quarter of fiscal 2016.
"The team has been performing at a high level since the merger,
but I still see so much potential as the power of Tyson 2.0 is just
beginning to emerge."
SEGMENT RESULTS (in millions)
|
Sales |
(for the
fourth quarter and 12 months ended October 3, 2015, and September
27, 2014) |
|
Fourth Quarter |
12
Months |
|
|
|
Volume |
Avg. Price |
|
|
Volume |
Avg. Price |
|
2015 |
2014 |
Change |
Change |
2015 |
2014 |
Change |
Change |
Chicken |
$ 3,024 |
$ 2,789 |
10.8% |
(2.2)% |
$ 11,390 |
$ 11,116 |
4.2% |
(1.6)% |
Beef |
4,410 |
4,429 |
6.1% |
(6.1)% |
17,236 |
16,177 |
(0.3)% |
6.9% |
Pork |
1,311 |
1,627 |
5.1% |
(23.3)% |
5,262 |
6,304 |
(0.8)% |
(15.8)% |
Prepared Foods |
2,008 |
1258 |
49.8% |
6.5% |
7,822 |
3,927 |
70.7% |
16.7% |
Other |
108 |
361 |
(67.8)% |
(7.5)% |
879 |
1,381 |
(32.2)% |
(6.2)% |
Intersegment Sales |
(355) |
(359) |
n/a |
n/a |
(1,216) |
(1,325) |
n/a |
n/a |
Total |
$ 10,506 |
$ 10,105 |
6.8% |
(2.6)% |
$ 41,373 |
$ 37,580 |
5.0% |
4.8% |
|
|
Operating Income
(Loss) |
(for the
fourth quarter and 12 months ended October 3, 2015, and September
27, 2014) |
|
Fourth Quarter |
12
Months |
|
|
|
Operating
Margin |
|
|
Operating
Margin |
|
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
Chicken |
$ 370 |
$ 201 |
12.2% |
7.2% |
$ 1,366 |
$ 883 |
12.0% |
7.9% |
Beef |
(33) |
153 |
(0.7)% |
3.5% |
(66) |
347 |
(0.4)% |
2.1% |
Pork |
95 |
99 |
7.2% |
6.1% |
380 |
455 |
7.2% |
7.2% |
Prepared Foods |
150 |
(47) |
7.5% |
(3.7)% |
588 |
(60) |
7.5% |
(1.5)% |
Other |
(32) |
(100) |
n/a |
n/a |
(99) |
(195) |
n/a |
n/a |
Total |
$ 550 |
$ 306 |
5.2% |
3.0% |
$ 2,169 |
$ 1,430 |
5.2% |
3.8% |
Note: In the fourth quarter of fiscal 2015 we began reporting
the International segment in Other following the completion of the
sale of our Mexico and Brazil chicken operations in fiscal 2015. As
a result, Other includes our foreign operations related to raising
and processing live chickens in China and India and third-party
merger and integration costs. All periods presented have been
reclassified to reflect this change. Chicken, Beef, Pork and
Prepared Foods were not impacted by this change.
ADJUSTED SEGMENT RESULTS (in millions)
|
Adjusted
Sales |
(for the
fourth quarter and 12 months ended October 3, 2015, and September
27, 2014) |
|
Fourth Quarter |
12
Months |
|
|
|
Adjusted |
Adjusted |
|
|
Adjusted |
Adjusted |
|
|
|
Volume |
Avg. Price |
|
|
Volume |
Avg. Price |
|
2015 |
2014 |
Change |
Change |
2015 |
2014 |
Change |
Change |
Chicken |
$ 2,808 |
$ 2,789 |
2.9% |
(2.2)% |
$ 11,174 |
$ 11,116 |
2.2% |
(1.6)% |
Beef |
4,095 |
4,429 |
(1.5)% |
(6.1)% |
16,921 |
16,177 |
(2.2)% |
6.9% |
Pork |
1,218 |
1,627 |
(2.4)% |
(23.3)% |
5,169 |
6,304 |
(2.6)% |
(15.8)% |
Prepared Foods |
1,865 |
933 |
73.6% |
15.1% |
7,679 |
3,602 |
77.8% |
19.9% |
Other |
100 |
361 |
(70.1)% |
(7.5)% |
871 |
1,381 |
(32.7)% |
(6.2)% |
Intersegment Sales |
(330) |
(359) |
n/a |
n/a |
(1,191) |
(1,325) |
n/a |
n/a |
Total |
$ 9,756 |
$ 9,780 |
1.3% |
(1.5)% |
$ 40,623 |
$ 37,255 |
3.7% |
5.2% |
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income (Loss) |
(for the
fourth quarter and 12 months ended October 3, 2015, and September
27, 2014) |
|
Fourth Quarter |
12
Months |
|
|
|
Adjusted
Operating |
|
|
Adjusted
Operating |
|
|
|
Margin |
|
|
Margin |
|
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
Chicken |
$ 344 |
$ 206 |
12.3% |
7.4% |
$ 1,340 |
$ 888 |
12.0% |
8.0% |
Beef |
(20) |
153 |
(0.5)% |
3.5% |
(53) |
347 |
(0.3)% |
2.1% |
Pork |
88 |
99 |
7.2% |
6.1% |
373 |
455 |
7.2% |
7.2% |
Prepared Foods |
171 |
17 |
9.2% |
1.8% |
636 |
53 |
8.3% |
1.5% |
Other |
(15) |
(6) |
n/a |
n/a |
(43) |
(94) |
n/a |
n/a |
Total |
$ 568 |
$ 469 |
5.8% |
4.8% |
$ 2,253 |
$ 1,649 |
5.5% |
4.4% |
Note: Adjusted sales and adjusted operating income are explained
and reconciled to a comparable GAAP measure at the end of this
release. Items reflected as adjusted, including adjusted volume and
adjusted average sales price, exclude the impact of the additional
week in the fourth quarter and 12 months of fiscal 2015.
Additionally, adjusted sales for the fourth quarter and 12 months
of fiscal 2014 excludes the one month of Hillshire Brands
post-closing sales.
Adjusted sales, adjusted operating income and adjusted operating
margin are presented as supplementary financial measurements in the
evaluation of our business. We believe the presentation of adjusted
sales, adjusted operating income and adjusted operating margin
helps investors assess our financial performance from period to
period and enhances understanding of our financial performance;
however, adjusted sales, adjusted operating income and adjusted
operating margin may not be comparable to those of other companies
in our industry, which limits the usefulness as comparative
measures. Adjusted sales, adjusted operating income and adjusted
operating margin are not measures required by or calculated in
accordance with GAAP and should not be considered as substitutes
for any measures of financial performance reported in accordance
with GAAP. Investors should rely primarily on our GAAP results and
use non-GAAP financial measures only supplementally in making
investment decisions.
Summary of Segment Results
- Chicken - Adjusted sales volume grew as a result of stronger
demand for chicken products and mix of rendered product sales.
Adjusted average sales price decreased as feed ingredient costs
declined, partially offset by mix changes. Adjusted operating
income increased due to higher sales volume and lower feed
ingredient costs, partially offset by disruptions caused by export
bans. Adjusted feed costs decreased $130 million and $440 million
during the fourth quarter and 12 months of fiscal 2015,
respectively.
- Beef - Adjusted sales volume decreased due to a reduction in
live cattle processed. Adjusted average sales price decreased in
the fourth quarter of fiscal 2015 due to higher domestic
availability of fed cattle supplies, which drove down livestock
costs. For the 12 months of fiscal 2015, adjusted average sales
price increased due to lower domestic availability of beef
products. Adjusted operating income decreased due to unfavorable
market conditions associated with a decrease in supply which drove
up fed cattle costs, export market disruptions, the relative value
of competing proteins and increased operating
costs. Additionally, we incurred $70 million of losses in the
fourth quarter of fiscal 2015 from mark-to-market open derivative
positions and lower-of-cost-or-market inventory adjustments as a
result of a large and rapid decline in live cattle futures during
September.
- Pork - Adjusted sales volume decreased due to the divestiture
of our Heinold Hog Markets business in the first quarter of fiscal
2015. Excluding the impact of the divestiture, our adjusted sales
volume grew 6.5% and 3.5% for the fourth quarter and 12 months of
fiscal 2015, respectively, driven by better demand for our pork
products. Live hog supplies increased, which drove down livestock
cost and adjusted average sales price. While reduced compared to
prior year, adjusted operating income remained strong as we
maximized our revenues relative to live hog markets, partially
attributable to operational and mix performance.
- Prepared Foods - Adjusted sales volume increased due to
incremental volumes from the acquisition of Hillshire Brands.
Adjusted average sales price increased primarily due to better
product mix which was positively impacted by the acquisition of
Hillshire Brands. Adjusted operating income improved due to an
increase in sales volume and average sales price mainly attributed
to Hillshire Brands, as well as lower adjusted raw material costs
of approximately $85 million and $285 million for the fourth
quarter and 12 months of fiscal 2015, respectively, related to our
legacy Prepared Foods business. Additionally, profit improvement
initiatives and Hillshire Brands synergies positively impacted
Prepared Foods operating income by $81 million and $285 million for
the fourth quarter and 12 months of fiscal 2015, respectively.
Outlook
In fiscal 2016, we expect domestic protein production (chicken,
beef, pork and turkey) to increase approximately 3% from fiscal
2015 levels. Additionally, we expect disruptions related to export
bans to continue in fiscal 2016. As we proceed with the integration
of Hillshire Brands, we expect to realize synergies of more than
$500 million in fiscal 2016 and more than $700 million in fiscal
2017 from the acquisition as well as our profit improvement plan
for our legacy Prepared Foods business. The majority of these
benefits will be realized in our Prepared Foods segment. The
following is a summary of the outlook for each of our segments, as
well as an outlook on sales, capital expenditures, net interest
expense, liquidity, share repurchases and dividends for fiscal
2016.
- Chicken – USDA data shows an increase in chicken production
around 2% in fiscal 2016 compared to fiscal 2015. However, more
recent data indicates a greater increase in supply which could
outpace the demand. Based on current futures prices, we expect
lower feed costs in fiscal 2016 compared to fiscal 2015 of
approximately $100 million. Many of our sales contracts are formula
based or shorter-term in nature, but there may be a lag time for
price changes to take effect. For fiscal 2016, we believe our
Chicken segment's operating margin should exceed 10%.
- Beef – We expect industry fed cattle supplies to be flat to
slightly higher in fiscal 2016 compared to fiscal 2015. Although we
generally expect adequate supplies in regions we operate our
plants, there may be periods of imbalance of fed cattle supply and
demand. We are adjusting our normalized range of the Beef segment
to 1.5-3.0% based on our historical performance and future
expectations given existing beef fundamentals, tight cattle
supplies and an imbalance of processing capacity. For fiscal 2016,
we believe our Beef segment's operating margin should approximate
the low end of the new range.
- Pork – We expect industry hog supplies to increase around 2-3%
in fiscal 2016 compared to fiscal 2015. For fiscal 2016, we believe
our Pork segment's operating margin will be in its normalized range
of 6-8%.
- Prepared Foods – We expect lower raw material costs of
approximately $350 million in fiscal 2016. As we continue to invest
heavily in innovation, new product launches and the strengthening
of our brands, we believe our operating margin should be near the
low-end of our expected range of 10-12% in fiscal 2016.
- Other – In the fourth quarter of fiscal 2015, we began
reporting the International segment in Other following the sale of
our Mexico and Brazil poultry operations in fiscal 2015. As a
result, Other includes our foreign operations related to raising
and processing live chickens in China and India. We expect Other
adjusted operating loss should be approximately $50 million in
fiscal 2016.
- Sales – We expect sales to approximate $41 billion for fiscal
2016 as we grow our current businesses to offset the impact of
fiscal 2015 divestitures.
- Capital Expenditures – We expect capital expenditures to
approximate $900 million for fiscal 2016.
- Net Interest Expense – We expect net interest expense will
approximate $255 million for fiscal 2016.
- Liquidity – We expect total liquidity, which was $1.9 billion
at October 3, 2015, to be above our goal to maintain liquidity
in excess of $1.2 billion.
- Share Repurchases – In fiscal 2016, we expect to increase share
repurchases under our share repurchase program. As of October 3,
2015, 21.1 million shares remain authorized for repurchases. The
timing and extent to which we repurchase shares will depend upon,
among other things, our working capital needs, market conditions,
liquidity targets, our debt obligations and regulatory
requirements. During the first quarter of fiscal 2016 as of
November 20, 2015, we have repurchased approximately 4.4 million
shares for $200 million, excluding shares repurchased to offset
dilution from our equity compensation plans.
- Dividends – On November 19, 2015, the Board of Directors
increased the quarterly dividend previously declared on July 30,
2015, to $0.15 per share on our Class A common stock and $0.135 per
share on our Class B common stock. The increased quarterly dividend
is payable on December 15, 2015, to shareholders of record at the
close of business on December 1, 2015. The Board also declared a
quarterly dividend of $0.15 per share on our Class A common stock
and $0.135 per share on our Class B common stock, payable on March
15, 2016, to shareholders of record at the close of business on
March 1, 2016. Beginning in fiscal 2017, we anticipate to increase
our annual dividends approximately $0.10 per year.
TYSON FOODS,
INC. |
CONSOLIDATED CONDENSED
STATEMENTS OF INCOME |
(In millions, except
per share data) |
(Unaudited) |
|
Three Months
Ended |
12
Months |
|
|
September 27, |
|
September 27, |
|
October 3, 2015 |
2014 |
October 3, 2015 |
2014 |
Sales |
$ 10,506 |
$ 10,105 |
$ 41,373 |
$ 37,580 |
Cost of Sales |
9,520 |
9,393 |
37,456 |
34,895 |
Gross Profit |
986 |
712 |
3,917 |
2,685 |
|
|
|
|
|
Selling, General and Administrative |
436 |
406 |
1,748 |
1,255 |
Operating Income |
550 |
306 |
2,169 |
1,430 |
Other (Income) Expense: |
|
|
|
|
Interest income |
(3) |
(1) |
(9) |
(7) |
Interest expense |
72 |
54 |
293 |
132 |
Other, net |
(4) |
35 |
(36) |
53 |
Total Other (Income) Expense |
65 |
88 |
248 |
178 |
Income before Income Taxes |
485 |
218 |
1,921 |
1,252 |
Income Tax Expense |
226 |
82 |
697 |
396 |
Net Income |
259 |
136 |
1,224 |
856 |
Less: Net Income (Loss) Attributable to
Noncontrolling Interests |
1 |
(1) |
4 |
(8) |
Net Income Attributable to Tyson |
$ 258 |
$ 137 |
$ 1,220 |
$ 864 |
Weighted Average Shares Outstanding: |
|
|
|
|
Class A Basic |
333 |
313 |
335 |
284 |
Class B Basic |
70 |
70 |
70 |
70 |
Diluted |
411 |
391 |
413 |
364 |
Net Income Per Share Attributable to
Tyson: |
|
|
|
|
Class A Basic |
$ 0.65 |
$ 0.37 |
$ 3.06 |
$ 2.48 |
Class B Basic |
$ 0.59 |
$ 0.32 |
$ 2.79 |
$ 2.26 |
Diluted |
$ 0.63 |
$ 0.35 |
$ 2.95 |
$ 2.37 |
Dividends Declared Per Share: |
|
|
|
|
Class A |
$ 0.100 |
$ 0.075 |
$ 0.425 |
$ 0.325 |
Class B |
$ 0.090 |
$ 0.068 |
$ 0.383 |
$ 0.294 |
|
|
|
|
|
Sales Growth |
4.0% |
|
10.1% |
|
Margins: (Percent of Sales) |
|
|
|
|
Gross Profit |
9.4% |
7.0% |
9.5% |
7.1% |
Operating Income |
5.2% |
3.0% |
5.2% |
3.8% |
Net Income Attributable to
Tyson |
2.5% |
1.4% |
2.9% |
2.3% |
Effective Tax Rate |
46.4% |
37.5% |
36.3% |
31.6% |
|
|
|
|
|
|
|
|
|
|
TYSON FOODS,
INC. |
CONSOLIDATED CONDENSED
BALANCE SHEETS |
(In
millions) |
(Unaudited) |
|
|
|
|
October 3, 2015 |
September 27, 2014 |
Assets |
|
|
Current Assets: |
|
|
Cash and cash equivalents |
$ 688 |
$ 438 |
Accounts receivable, net |
1,620 |
1,684 |
Inventories |
2,878 |
3,274 |
Other current assets |
195 |
379 |
Assets held for sale |
— |
446 |
Total Current Assets |
5,381 |
6,221 |
Net Property, Plant and Equipment |
5,176 |
5,130 |
Goodwill |
6,667 |
6,706 |
Intangible Assets, net |
5,168 |
5,276 |
Other Assets |
612 |
623 |
Total Assets |
$ 23,004 |
$ 23,956 |
|
|
|
Liabilities and Shareholders'
Equity |
|
|
Current Liabilities: |
|
|
Current debt |
$ 715 |
$ 643 |
Accounts payable |
1,662 |
1,806 |
Other current liabilities |
1,158 |
1,207 |
Liabilities held for sale |
— |
141 |
Total Current Liabilities |
3,535 |
3,797 |
Long-Term Debt |
6,010 |
7,535 |
Deferred Income Taxes |
2,449 |
2,450 |
Other Liabilities |
1,304 |
1,270 |
|
|
|
Total Tyson Shareholders' Equity |
9,691 |
8,890 |
Noncontrolling Interests |
15 |
14 |
Total Shareholders' Equity |
9,706 |
8,904 |
|
|
|
Total Liabilities and Shareholders'
Equity |
$ 23,004 |
$ 23,956 |
|
|
|
|
|
|
TYSON FOODS,
INC. |
CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS |
(In
millions) |
(Unaudited) |
|
|
|
|
12
Months |
|
October 3, 2015 |
September 27, 2014 |
Cash Flows From Operating Activities: |
|
|
Net income |
$ 1,224 |
$ 856 |
Depreciation and
amortization |
711 |
530 |
Deferred income taxes |
38 |
(105) |
Convertible debt discount |
— |
(92) |
Gain on dispositions of
businesses |
(177) |
— |
Impairment of assets |
285 |
107 |
Share-based compensation
expense |
69 |
51 |
Other, net |
71 |
(20) |
Net changes in operating assets
and liabilities |
349 |
(149) |
Cash Provided by Operating Activities |
2,570 |
1,178 |
|
|
|
Cash Flows From Investing Activities: |
|
|
Additions to property, plant
and equipment |
(854) |
(632) |
Purchases of marketable
securities |
(38) |
(18) |
Proceeds from sale of
marketable securities |
52 |
33 |
Acquisitions, net of cash
acquired |
— |
(8,193) |
Proceeds from sale of
businesses |
539 |
— |
Other, net |
31 |
10 |
Cash Used for Investing Activities |
(270) |
(8,800) |
|
|
|
Cash Flows From Financing Activities: |
|
|
Payments on debt |
(1,995) |
(639) |
Proceeds from issuance of
long-term debt |
501 |
5,576 |
Borrowings on revolving credit
facility |
1,345 |
— |
Payments on revolving credit
facility |
(1,345) |
— |
Proceeds from issuance of debt
component of tangible equity units |
— |
205 |
Proceeds from issuance of
common stock, net of issuance costs |
— |
873 |
Net proceeds from issuance of
equity component of tangible equity units |
— |
1,255 |
Purchases of Tyson Class A
common stock |
(495) |
(295) |
Dividends |
(147) |
(104) |
Stock options exercised |
84 |
67 |
Other, net |
17 |
(23) |
Cash Provided by (Used for) Financing
Activities |
(2,035) |
6,915 |
|
|
|
Effect of Exchange Rate Changes on Cash |
(15) |
— |
|
|
|
Increase (Decrease) in Cash and Cash
Equivalents |
250 |
(707) |
Cash and Cash Equivalents at Beginning of
Year |
438 |
1,145 |
Cash and Cash Equivalents at End of
Period |
$ 688 |
$ 438 |
|
|
|
|
|
|
TYSON FOODS,
INC. |
EBITDA
Reconciliations |
(In
millions) |
(Unaudited) |
|
|
|
|
12 Months
Ended (b) |
|
October 3, 2015 |
September 27, 2014 |
|
|
|
Net income |
$ 1,224 |
$ 856 |
Less: Interest income |
(9) |
(7) |
Add: Interest expense |
293 |
132 |
Add: Income tax expense |
697 |
396 |
Add: Depreciation |
609 |
494 |
Add: Amortization (a) |
92 |
26 |
EBITDA |
$ 2,906 |
$ 1,897 |
|
|
|
Adjustments to EBITDA: |
|
|
Add: China impairment |
$ 169 |
$ — |
Add: Merger and integration costs |
57 |
— |
Add: Prepared Foods network optimization
impairment charges |
59 |
— |
Add: Denison plant closure |
12 |
— |
Add: Brazil impairment |
— |
42 |
Add: Hillshire Brands purchase price
accounting adjustments |
— |
19 |
Add: Hillshire Brands acquisition,
integration and costs associated with our Prepared Foods
improvement plan |
— |
197 |
Add: Costs (insurance proceeds, net of costs)
related to a legacy Hillshire Brands plant fire |
(8) |
12 |
Less: Gain on sale of the Mexico
operation |
(161) |
— |
Less: Gain on sale of equity securities |
(21) |
— |
Total Adjusted EBITDA |
$ 3,013 |
$ 2,167 |
|
|
|
Total gross debt |
$ 6,725 |
$ 8,178 |
Less: Cash and cash equivalents |
(688) |
(438) |
Less: Short-term investments |
(2) |
(1) |
Total net debt |
$ 6,035 |
$ 7,739 |
|
|
|
Ratio Calculations: |
|
|
Gross debt/EBITDA |
2.3x |
4.3x |
Net debt/EBITDA |
2.1x |
4.1x |
|
|
|
Gross debt/Adjusted EBITDA |
2.2x |
3.8x |
Net debt/Adjusted EBITDA |
2.0x |
3.6x |
(a) Excludes the
amortization of debt discount expense of $10 million for the twelve
months ended October 3, 2015, and September 27, 2014,
respectively, as it is included in Interest expense. |
(b) Adjusted EBITDA for
fiscal 2015 was based on a 53-week year while fiscal 2014 was based
on a 52-week year. |
EBITDA is defined as net income before interest, income taxes,
depreciation and amortization. Net debt to EBITDA (and to Adjusted
EBITDA) represents the ratio of our debt, net of cash and
short-term investments, to EBITDA (and to Adjusted EBITDA). EBITDA,
Adjusted EBITDA, net debt to EBITDA and net debt to Adjusted EBITDA
are presented as supplemental financial measurements in the
evaluation of our business. Adjusted EBITDA is a tool intended to
assist our management and investors in comparing our performance on
consistent basis for purposes of business decision-making by
removing the impact of certain items that management believes do
not directly reflect our core operations on an ongoing basis.
We believe the presentation of these financial measures helps
management and investors to assess our operating performance from
period to period, including our ability to generate earnings
sufficient to service our debt, and enhances understanding of our
financial performance and highlights operational trends. These
measures are widely used by investors and rating agencies in the
valuation, comparison, rating and investment recommendations of
companies; however, the measurements of EBITDA (and Adjusted
EBITDA) and net debt to EBITDA (and to Adjusted EBITDA) may not be
comparable to those of other companies, which limits their
usefulness as comparative measures. EBITDA (and Adjusted EBITDA)
and net debt to EBITDA (and to Adjusted EBITDA) are not measures
required by or calculated in accordance with generally accepted
accounting principles (GAAP) and should not be considered as
substitutes for net income or any other measure of financial
performance reported in accordance with GAAP or as a measure of
operating cash flow or liquidity. EBITDA (and Adjusted EBITDA) is a
useful tool for assessing, but is not a reliable indicator of, our
ability to generate cash to service our debt obligations because
certain of the items added to net income to determine EBITDA (and
Adjusted EBITDA) involve outlays of cash. As a result, actual cash
available to service our debt obligations will be different from
EBITDA (and Adjusted EBITDA). Investors should rely primarily on
our GAAP results and use non-GAAP financial measures only
supplementally in making investment decisions.
TYSON FOODS,
INC. |
EPS
Reconciliations |
(In millions, except
per share data) |
(Unaudited) |
|
Fourth
Quarter |
12 Months
Ended |
|
Pre-Tax Impact |
EPS Impact |
Pre-Tax Impact |
EPS Impact |
|
2015 |
2014 |
2015 |
2014(a) |
2015 |
2014 |
2015 |
2014(a) |
|
|
|
|
|
|
|
|
|
Reported net income per share attributable to
Tyson |
|
|
$ 0.63 |
$ 0.35 |
|
|
$ 2.95 |
$ 2.37 |
|
|
|
|
|
|
|
|
|
Add: China impairment |
$ 169 |
$ — |
0.41 |
— |
$ 169 |
$ — |
0.41 |
— |
|
|
|
|
|
|
|
|
|
Add: Merger and integration costs |
$ 8 |
$ — |
0.02 |
— |
$ 57 |
$ — |
0.09 |
— |
|
|
|
|
|
|
|
|
|
Add: Prepared Foods network optimization
impairment charges |
$ 59 |
$ — |
0.09 |
— |
$ 59 |
$ — |
0.09 |
— |
|
|
|
|
|
|
|
|
|
Add: Denison plant closure |
$ 12 |
$ — |
0.02 |
— |
$ 12 |
$ — |
0.02 |
— |
|
|
|
|
|
|
|
|
|
Add: Brazil impairment / Mexico undistributed
earnings tax |
$ — |
$ 42 |
— |
0.16 |
$ — |
$ 42 |
— |
0.16 |
|
|
|
|
|
|
|
|
|
Add: Hillshire Brands acquisition,
integration and costs associated with our Prepared Foods
improvement plan |
$ — |
$ 119 |
— |
0.24 |
$ — |
$ 197 |
— |
0.37 |
|
|
|
|
|
|
|
|
|
Add: Hillshire Brands post-closing results,
purchase price accounting and costs related to a legacy Hillshire
Brands plant fire |
$ — |
$ 40 |
— |
0.07 |
$ — |
$ 40 |
— |
0.07 |
|
|
|
|
|
|
|
|
|
Add: Hillshire Brands acquisition financing
incremental interest costs and share dilution |
$ — |
$ 27 |
— |
0.09 |
$ — |
$ 27 |
— |
0.12 |
|
|
|
|
|
|
|
|
|
Less: Recognition of previously unrecognized
tax benefit |
$ — |
$ — |
— |
(0.04) |
$ — |
$ — |
(0.06) |
(0.15) |
|
|
|
|
|
|
|
|
|
Less: Insurance proceeds (net of costs)
related to a legacy Hillshire Brands plant fire |
$ (25) |
$ — |
(0.04) |
— |
$ (8) |
$ — |
(0.02) |
— |
|
|
|
|
|
|
|
|
|
Less: Gain on sale of equity securities |
$ — |
$ — |
— |
— |
$ (21) |
$ — |
(0.03) |
— |
|
|
|
|
|
|
|
|
|
Less: Gain on sale of the Mexico
operation |
$ (161) |
$ — |
(0.24) |
— |
$ (161) |
$ — |
(0.24) |
— |
|
|
|
|
|
|
|
|
|
Less: Impact of additional week |
$ (39) |
$ — |
(0.06) |
— |
$ (39) |
$ — |
(0.06) |
— |
|
|
|
|
|
|
|
|
|
Adjusted net income per share attributable to
Tyson |
|
|
$ 0.83 |
$ 0.87 |
|
|
$ 3.15 |
$ 2.94 |
(a) All fourth quarter 2014 and
fiscal 2014 adjustments utilized weighted average shares
outstanding of 356 million. |
Adjusted net income per share attributable to Tyson (adjusted
EPS) is presented as a supplementary financial measurement in the
evaluation of our business. We believe the presentation of adjusted
EPS helps investors to assess our financial performance from period
to period and enhances understanding of our financial performance;
however, adjusted EPS may not be comparable to those of other
companies in our industry, which limits the usefulness as
comparative measures. Adjusted EPS is not a measure required by or
calculated in accordance with GAAP and should not be considered as
a substitute for any measure of financial performance reported in
accordance with GAAP. Investors should rely primarily on our GAAP
results and use non-GAAP financial measures only supplementally in
making investment decisions.
TYSON FOODS,
INC. |
Operating Income
Reconciliations |
(In
millions) |
(Unaudited) |
|
Adjusted Operating
Income (Loss) |
(for the
fourth quarter ended October 3, 2015) |
|
|
|
|
Prepared |
|
|
|
Chicken |
Beef |
Pork |
Foods |
Other |
Total |
Reported operating income (loss) |
$ 370 |
$ (33) |
$ 95 |
$ 150 |
$ (32) |
$ 550 |
|
|
|
|
|
|
|
Add: China impairment |
— |
— |
— |
— |
169 |
169 |
Add: Merger and integration costs |
— |
— |
— |
— |
8 |
8 |
Add: Prepared Foods network optimization
impairment charges |
— |
— |
— |
59 |
— |
59 |
Add: Denison plant closure |
— |
12 |
— |
— |
— |
12 |
Less: Insurance proceeds related to a legacy
Hillshire Brands plant fire |
— |
— |
— |
(25) |
— |
(25) |
Less: Gain on sale of the Mexico
operation |
— |
— |
— |
— |
(161) |
(161) |
Adjusted operating income prior to adjustment
for additional week |
370 |
(21) |
95 |
184 |
(16) |
612 |
Less: Estimated impact of additional week
(a) |
(26) |
1 |
(7) |
(13) |
1 |
(44) |
Adjusted operating income (loss) |
$ 344 |
$ (20) |
$ 88 |
$ 171 |
$ (15) |
$ 568 |
(a) Impact of additional week was
calculated by using the fourth quarter of fiscal 2015 adjusted
operating income (prior to the additional week impact) and divided
by 14 weeks. |
|
|
Adjusted Operating
Income (Loss) |
(for the
fourth quarter ended September 27, 2014) |
|
|
|
|
Prepared |
|
|
|
Chicken |
Beef |
Pork |
Foods |
Other |
Total |
Reported operating income (loss) |
$ 201 |
$ 153 |
$ 99 |
$ (47) |
$ (100) |
$ 306 |
|
|
|
|
|
|
|
Add: Brazil impairment |
— |
— |
— |
— |
42 |
42 |
Add: Hillshire Brands acquisition,
integration and costs associated with our Prepared Foods
improvement plan |
5 |
— |
— |
24 |
52 |
81 |
Add: Hillshire Brands post-closing results,
purchase price accounting and costs related to a legacy Hillshire
Brands plant fire |
— |
— |
— |
40 |
— |
40 |
Adjusted Operating Income (Loss) |
$ 206 |
$ 153 |
$ 99 |
$ 17 |
$ (6) |
$ 469 |
|
|
|
|
|
|
|
|
Adjusted Operating
Income (Loss) |
(for the 12
months ended October 3, 2015) |
|
|
|
|
Prepared |
|
|
|
Chicken |
Beef |
Pork |
Foods |
Other |
Total |
Reported operating income (loss) |
$ 1,366 |
$ (66) |
$ 380 |
$ 588 |
$ (99) |
$ 2,169 |
|
|
|
|
|
|
|
Add: China impairment |
— |
— |
— |
— |
169 |
169 |
Add: Merger and integration costs |
— |
— |
— |
10 |
47 |
57 |
Add: Prepared Foods network optimization
impairment charges |
— |
— |
— |
59 |
— |
59 |
Add: Denison plant closure |
— |
12 |
— |
— |
— |
12 |
Less: Insurance proceeds (net of costs)
related to a legacy Hillshire Brands plant fire |
— |
— |
— |
(8) |
— |
(8) |
Less: Gain on sale of the Mexico
operation |
— |
— |
— |
— |
(161) |
(161) |
Adjusted operating income prior to adjustment
for additional week |
1,366 |
(54) |
380 |
649 |
(44) |
2,297 |
Less: Estimated impact of additional week
(a) |
(26) |
1 |
(7) |
(13) |
1 |
(44) |
Adjusted operating income (loss) |
$ 1,340 |
$ (53) |
$ 373 |
$ 636 |
$ (43) |
$ 2,253 |
(a) Impact of additional week was
calculated by using the fourth quarter of fiscal 2015 adjusted
operating income (prior to the additional week impact) and divided
by 14 weeks. |
|
Adjusted Operating
Income (Loss) |
(for the 12
months ended September 27, 2014) |
|
|
|
|
Prepared |
|
|
|
Chicken |
Beef |
Pork |
Foods |
Other |
Total |
Reported operating income (loss) |
$ 883 |
$ 347 |
$ 455 |
$ (60) |
$ (195) |
$ 1,430 |
|
|
|
|
|
|
|
Add: Brazil impairment |
— |
— |
— |
— |
42 |
42 |
Add: Hillshire Brands acquisition,
integration and costs associated with our Prepared Foods
improvement plan |
5 |
— |
— |
73 |
59 |
137 |
Add: Hillshire Brands post-closing results,
purchase price accounting and costs related to a legacy Hillshire
Brands plant fire |
— |
— |
— |
40 |
— |
40 |
Adjusted operating income (loss) |
$ 888 |
$ 347 |
$ 455 |
$ 53 |
$ (94) |
$ 1,649 |
Adjusted operating income is presented as a supplementary
financial measurement in the evaluation of our business. We believe
the presentation of adjusted operating income helps investors
assess our financial performance from period to period and enhances
understanding of our financial performance; however, adjusted
operating income may not be comparable to those of other companies
in our industry, which limits the usefulness as comparative
measures. Adjusted operating income is not a measure required by or
calculated in accordance with GAAP and should not be considered as
a substitute for any measure of financial performance reported in
accordance with GAAP. Investors should rely primarily on our GAAP
results and use non-GAAP financial measures only supplementally in
making investment decisions.
TYSON FOODS,
INC. |
Sales
Reconciliations |
(In
millions) |
(Unaudited) |
|
|
Fourth
Quarter |
12
Months |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
Reported sales |
$ 10,506 |
$ 10,105 |
$ 41,373 |
$ 37,580 |
|
|
|
|
|
Less: Impact of additional week (a) |
(750) |
— |
(750) |
— |
|
|
|
|
|
Less: Hillshire Brands post-closing
sales |
— |
(325) |
— |
(325) |
|
|
|
|
|
Adjusted sales |
$ 9,756 |
$ 9,780 |
$ 40,623 |
$ 37,255 |
|
|
|
|
|
(a) The estimated impact of the
additional week in the fourth quarter and 12 months of fiscal 2015
was calculated by dividing unadjusted sales for the fourth quarter
of fiscal 2015 by 14 weeks. |
Adjusted sales is presented as a supplementary financial
measurement in the evaluation of our business. We believe the
presentation of adjusted sales helps investors assess our financial
performance from period to period and enhances understanding of our
financial performance; however, adjusted sales may not be
comparable to those of other companies in our industry, which
limits the usefulness as comparative measures. Adjusted sales is
not a measure required by or calculated in accordance with GAAP and
should not be considered as a substitute for any measure of
financial performance reported in accordance with GAAP. Investors
should rely primarily on our GAAP results and use non-GAAP
financial measures only supplementally in making investment
decisions.
Tyson Foods, Inc., with headquarters in Springdale, Arkansas, is
one of the world's largest food companies with leading brands such
as Tyson®, Jimmy Dean®, Hillshire Farm®, Sara Lee®, Ball
Park®, Wright®, Aidells® and State Fair®. It's a recognized market
leader in chicken, beef and pork as well as prepared foods,
including bacon, breakfast sausage, turkey, lunchmeat, hot dogs,
pizza crusts and toppings, tortillas and desserts. The company
supplies retail and foodservice customers throughout the United
States and approximately 130 countries. Tyson Foods was founded in
1935 by John W. Tyson, whose family has continued to lead the
business with his son, Don Tyson, guiding the company for many
years and grandson, John H. Tyson, serving as the current chairman
of the board of directors. The company has approximately 113,000
Team Members employed at more than 400 facilities and offices in
the United States and around the world. Through its Core Values,
Code of Conduct and Team Member Bill of Rights, Tyson Foods strives
to operate with integrity and trust and is committed to creating
value for its shareholders, customers and Team Members. The company
also strives to be faith-friendly, provide a safe work environment
and serve as stewards of the animals, land and environment
entrusted to it.
A conference call to discuss the Company's financial results
will be held at 9 a.m. Eastern Monday, November 23, 2015. To listen
live via telephone, call 888-455-8283. International callers dial
1-210-839-8865. The pass code "Tyson Foods" will be required to
join the call. If you are unable to listen to the live webcast, it
will be archived for one year at http://ir.tyson.com. A telephone
replay will be available through December 23, 2015 at 800-679-9654.
International callers may access the replay at 1-402-220-0277. The
live webcast, as well as the replay, will be available on the
Internet at http://ir.tyson.com. Financial information, such as
this news release, as well as other supplemental data, can be
accessed from the Company's web site at http://ir.tyson.com.
To download TSN's free investor relations app, which offers
access to SEC filings, news releases, transcripts, webcasts and
presentations, please visit the App Store for iPhone and iPad or
Google Play for Android mobile devices.
Forward-Looking Statements
Certain information contained in the press release may
constitute forward-looking statements, such as statements relating
to expected performance, and including, but not limited to,
statements appearing in the "Outlook" section. These
forward-looking statements are subject to a number of factors and
uncertainties which could cause our actual results and experiences
to differ materially from the anticipated results and expectations
expressed in such forward-looking statements. We wish to caution
readers not to place undue reliance on any forward-looking
statements, which speak only as of the date made. Among the factors
that may cause actual results and experiences to differ from
anticipated results and expectations expressed in such
forward-looking statements are the following: (i) the effect of, or
changes in, general economic conditions; (ii) fluctuations in the
cost and availability of inputs and raw materials, such as live
cattle, live swine, feed grains (including corn and soybean meal)
and energy; (iii) market conditions for finished products,
including competition from other global and domestic food
processors, supply and pricing of competing products and
alternative proteins and demand for alternative proteins; (iv)
successful rationalization of existing facilities and operating
efficiencies of the facilities; (v) risks associated with our
commodity purchasing activities; (vi) access to foreign markets
together with foreign economic conditions, including currency
fluctuations, import/export restrictions and foreign politics;
(vii) outbreak of a livestock disease (such as avian influenza (AI)
or bovine spongiform encephalopathy (BSE)), which could have an
adverse effect on livestock we own, the availability of livestock
we purchase, consumer perception of certain protein products or our
ability to access certain domestic and foreign markets; (viii)
changes in availability and relative costs of labor and contract
growers and our ability to maintain good relationships with
employees, labor unions, contract growers and independent producers
providing us livestock; (ix) issues related to food safety,
including costs resulting from product recalls, regulatory
compliance and any related claims or litigation; (x) changes in
consumer preference and diets and our ability to identify and react
to consumer trends; (xi) significant marketing plan changes by
large customers or loss of one or more large customers; (xii)
adverse results from litigation; (xiii) impacts on our operations
caused by factors and forces beyond our control, such as natural
disasters, fire, bioterrorism, pandemics or extreme weather; (xiv)
risks associated with leverage, including cost increases due to
rising interest rates or changes in debt ratings or outlook; (xv)
compliance with and changes to regulations and laws (both domestic
and foreign), including changes in accounting standards, tax laws,
environmental laws, agricultural laws and occupational, health and
safety laws; (xvi) our ability to make effective acquisitions or
joint ventures and successfully integrate newly acquired businesses
into existing operations; (xvii) failures or security breaches of
our information technology systems; (xviii) effectiveness of
advertising and marketing programs; and (xix) those factors listed
under Item 1A. "Risk Factors" included in our Annual Report filed
on Form 10-K for the period ended October 3, 2015.
CONTACT: Media Contact: Gary Mickelson, 479-290-6111
Investor Contact: Jon Kathol, 479-290-4235
Tyson Foods (NYSE:TSN)
Historical Stock Chart
From Sep 2024 to Oct 2024
Tyson Foods (NYSE:TSN)
Historical Stock Chart
From Oct 2023 to Oct 2024