Tyson Foods, Inc. (NYSE: TSN), one of the world’s largest food
companies and a recognized leader in protein with leading brands
including Tyson, Jimmy Dean, Hillshire Farm, Ball Park, Wright,
Aidells, ibp and State Fair, today reported the following results:
(in millions, except per share
data) |
First Quarter |
|
2020 |
|
2019 |
Sales |
$ |
10,815 |
|
|
$ |
10,193 |
|
Operating Income |
826 |
|
|
807 |
|
|
|
|
|
Net Income |
561 |
|
|
552 |
|
Less: Net Income Attributable
to Noncontrolling Interests |
4 |
|
|
1 |
|
Net Income Attributable to
Tyson |
$ |
557 |
|
|
$ |
551 |
|
|
|
|
|
Net Income Per Share
Attributable to Tyson |
$ |
1.52 |
|
|
$ |
1.50 |
|
|
|
|
|
Adjusted1 Operating
Income |
$ |
894 |
|
|
$ |
841 |
|
|
|
|
|
Adjusted1 Net Income Per
Share Attributable to Tyson |
$ |
1.66 |
|
|
$ |
1.58 |
|
1 Adjusted operating income and adjusted net income per share
attributable to Tyson, or Adjusted EPS, are non-GAAP financial
measures and are explained and reconciled to a comparable GAAP
measure at the end of this release. Adjusted net income per share
attributable to Tyson guidance is provided on a non-GAAP basis
because certain information necessary to calculate such measure on
a GAAP basis is unavailable, dependent on future events outside of
our control and cannot be predicted without unreasonable efforts by
the Company. A further explanation of providing non-GAAP guidance
is included at the end of this release.
First Quarter Highlights
- GAAP EPS of $1.52, up 1% from prior year; Adjusted EPS
of $1.66, up 5% from prior year
- GAAP operating income of $826 million, up 2% from prior
year
- Adjusted operating income of $894 million, up 6% from
prior year
- Total Company GAAP operating margin of 7.6%; Adjusted
operating margin of 8.3%
- Record Beef GAAP operating margin of 10.7% and record
Adjusted operating margin of 11.2%
- Sales growth of 6%
“Our overall results in the first quarter of fiscal 2020 were in
line with expectations,” said Noel White, Tyson Foods’ CEO. “Our
Beef and Pork segments performed well as the effects of African
swine fever are beginning to materialize. Our Chicken segment
performed better operationally, although in a soft pricing
environment. Our Prepared Foods segment produced its sixth
consecutive quarter of retail consumption growth, demonstrating the
strength of our brands and innovation as we grew or held market
share in all core categories.
“With improved access to global markets resulting from recent
trade developments, there are reasons to be optimistic about fiscal
2020 and beyond and we are well-positioned to capitalize on
opportunities in the global marketplace. Although we
anticipate the challenges and volatility typical in our second
fiscal quarter, our long-term outlook remains positive.”
SEGMENT RESULTS (in millions)
Sales |
(for the first quarter ended December 28, 2019, and December 29,
2018) |
|
First Quarter |
|
|
|
Volume |
Avg. Price |
|
2020 |
2019 |
Change |
Change |
Beef |
$ |
3,838 |
|
$ |
3,926 |
|
(8.0 |
)% |
5.8 |
% |
Pork |
1,379 |
|
1,179 |
|
7.3 |
% |
9.7 |
% |
Chicken |
3,292 |
|
3,115 |
|
4.5 |
% |
1.2 |
% |
Prepared
Foods |
2,140 |
|
2,149 |
|
(3.1 |
)% |
2.7 |
% |
International/Other |
498 |
|
143 |
|
220.2 |
% |
27.2 |
% |
Intersegment
Sales |
(332 |
) |
(319 |
) |
n/a |
|
n/a |
|
Total |
$ |
10,815 |
|
$ |
10,193 |
|
4.7 |
% |
1.4 |
% |
Operating Income (Loss) |
(for the first quarter ended December 28, 2019, and December 29,
2018) |
|
First Quarter |
|
|
|
Operating Margin |
|
2020 |
2019 |
2020 |
2019 |
Beef |
$ |
410 |
|
$ |
305 |
|
10.7 |
% |
7.8 |
% |
Pork |
191 |
|
95 |
|
13.9 |
% |
8.1 |
% |
Chicken |
57 |
|
160 |
|
1.7 |
% |
5.1 |
% |
Prepared
Foods |
158 |
|
265 |
|
7.4 |
% |
12.3 |
% |
International/Other |
10 |
|
(18 |
) |
n/a |
|
n/a |
|
Total |
$ |
826 |
|
$ |
807 |
|
7.6 |
% |
7.9 |
% |
Note: On June 3, 2019, we acquired the Thai and European
operations of BRF S.A. The post-acquisition results from operations
of these businesses are included in International/Other for segment
presentation. On November 30, 2018, we acquired Keystone Foods. The
post-acquisition results from operations of this business are
included in our Chicken segment for Keystone's domestic operations
and results for operations of Keystone's International business are
included in International/Other for segment presentation.
Adjusted Segment Results (in millions)
Adjusted Operating Income (Non-GAAP) |
(for the first quarter ended December 28, 2019, and December 29,
2018) |
|
First Quarter |
|
|
|
Adjusted Operating Margin (Non-GAAP) |
|
2020 |
2019 |
2020 |
2019 |
Beef |
$ |
431 |
|
$ |
305 |
|
11.2 |
% |
7.8 |
% |
Pork |
193 |
|
95 |
|
14.0 |
% |
8.1 |
% |
Chicken |
78 |
|
173 |
|
2.4 |
% |
5.6 |
% |
Prepared Foods |
180 |
|
268 |
|
8.4 |
% |
12.5 |
% |
International/Other |
12 |
|
— |
|
n/a |
|
n/a |
|
Total |
$ |
894 |
|
$ |
841 |
|
8.3 |
% |
8.3 |
% |
Note: Adjusted operating income is a non-GAAP financial measure
and is explained and reconciled to a comparable GAAP measure at the
end of this release.
Adjusted operating income and adjusted operating margin are
presented as supplementary measures in the evaluation of our
business that are not required by, or presented in accordance with,
GAAP. We use adjusted operating income and adjusted operating
margin as internal performance measurements and as two criteria for
evaluating our performance relative to that of our peers. We
believe adjusted operating income and adjusted operating margin are
meaningful to our investors to enhance their understanding of our
financial performance and are frequently used by securities
analysts, investors and other interested parties to compare our
performance with the performance of other companies that report
adjusted operating income and adjusted operating margin. Further,
we believe that adjusted operating income and adjusted operating
margin are useful measures because they improve comparability of
results of operations from period to period. Adjusted operating
income and adjusted operating margin should not be considered as
substitutes for operating income, operating margin or any other
measure of operating 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. Our calculation of adjusted operating income
and adjusted operating margin may not be comparable to similarly
titled measures reported by other companies.
Summary of Segment Results
- Beef - Sales volume decreased due to a reduction in live cattle
harvest capacity as a result of a fire that caused the temporary
closure of a production facility for the majority of the first
quarter of fiscal 2020. Average sales price increased as beef
demand remained strong. Operating income increased as we continued
to maximize our revenues relative to live fed cattle costs,
partially offset by increased operating costs and $16 million of
net incremental costs from a production facility fire.
- Pork - Sales volume increased due to increased domestic
availability of live hogs and strong demand for our pork products.
Average sales price increased associated with higher livestock
costs and stronger export markets. Operating income increased as we
maximized our revenues relative to the live hog markets, partially
attributable to favorable export markets and improved operational
performance, which were slightly offset by higher operating
costs.
- Chicken - Sales volume increased primarily due to incremental
volume from a business acquisition, partially offset by lower
volume from our rendering and blending business. Average sales
price increased due to lower rendering and blending sales, which
carry a lower average sales price, largely offset by broadly weaker
chicken pricing as a result of market conditions. Operating income
decreased primarily from challenging pricing conditions.
Additionally, operating income in the first quarter of fiscal 2020
was impacted by $21 million in restructuring costs.
- Prepared Foods - Sales volume decreased as growth in volume
across the consumer products business was offset by other
intersegment sales channel shifts. Average sales price increased
due to favorable product mix and the pass through of increased raw
material costs. Operating income decreased primarily due to
increased operating costs, including an $80 million increase in raw
material costs. Additionally, operating income in the first quarter
of fiscal 2020 was impacted by $22 million in restructuring
costs.
OutlookFor fiscal 2020, USDA indicates domestic
protein production (beef, pork, chicken and turkey) should increase
approximately 3-4% from fiscal 2019 levels, but we expect export
markets to absorb the increased production. The following is a
summary of the outlook for each of our segments, as well as an
outlook for capital expenditures, net interest expense, liquidity
and tax rate for fiscal 2020. While our accounting cycle results in
a 53-week year in fiscal 2020 as compared to a 52-week year in
fiscal 2019, the fiscal 2020 outlook is based on a comparable
52-week year.
Adjusted operating margin guidance is provided below on a
non-GAAP basis2.
- Beef – We expect industry fed cattle supplies to increase
approximately 1% in fiscal 2020 as compared to fiscal 2019. We
expect ample supplies in regions where we operate our plants. For
fiscal 2020, we believe our Beef segment's adjusted operating
margin will be toward the upper end of 6.5% to 7.5%, absent
additional impacts from ASF.
- Pork – We expect industry hog supplies to increase
approximately 4% in fiscal 2020 as compared to fiscal 2019. We
expect increased livestock costs in fiscal 2020 as compared to
fiscal 2019. For fiscal 2020, we believe our Pork segment's
adjusted operating margin will be 6% to 8%, absent additional
impacts from ASF.
- Chicken – USDA projects a 4% increase in chicken production in
fiscal 2020 as compared to fiscal 2019. For fiscal 2020, we believe
our Chicken segment's adjusted operating margin will be 4% to 6%,
absent additional impacts from ASF.
- Prepared Foods – We expect raw material costs to increase
throughout fiscal 2020 as compared to fiscal 2019, but we expect to
recover these costs through pricing over time. Given the timing lag
on passing these prices through, we may not fully recover these
costs within the fiscal year. For fiscal 2020, we believe our
Prepared Foods segment's adjusted operating margin will be 10% to
12%.
- International/Other – International/Other primarily includes
our foreign operations in Asia-Pacific, China-Korea and Europe,
third-party merger and integration costs and corporate overhead
related to Tyson New Ventures, LLC. We expect improved results in
fiscal 2020 from improvement in our foreign operations as well as
the impact of a full year of our recently acquired operations.
- Capital Expenditures – For fiscal 2020, we expect capital
expenditures to be approximately $1.3 billion. Capital expenditures
will include spending for production growth, safety, animal
well-being, infrastructure replacements and upgrades, and
operational improvements that are expected to result in production
and labor efficiencies, yield improvements and sales channel
flexibility.
- Net Interest Expense – We expect net interest expense to
approximate $450 million for fiscal 2020.
- Liquidity – We expect total liquidity, which was approximately
$1.4 billion at December 28, 2019, to remain above our minimum
liquidity target of $1.0 billion.
- Tax Rate – We expect our adjusted effective tax rate to be
around 23.5% in fiscal 2020.
2 The Company is not able to reconcile its full-year fiscal
2020 adjusted operating margin guidance to its fiscal 2020
projected GAAP operating margin guidance because certain
information necessary to calculate such measure on a GAAP basis is
unavailable or dependent on the timing of future events outside of
our control. Therefore, because of the uncertainty and variability
of the nature of the amount of future adjustments, which could be
significant, the Company is unable to provide a reconciliation of
this measure without unreasonable effort. Adjusted operating margin
should not be considered a substitute for operating margin or any
other measure of financial performance reported in accordance with
GAAP. Investors should rely primarily on the Company’s GAAP results
and use non-GAAP financial measures only supplementally in making
investment decisions.
TYSON FOODS,
INC.CONSOLIDATED CONDENSED STATEMENTS OF
INCOME(In millions, except per share
data)(Unaudited)
|
Three Months Ended |
|
December 28, 2019 |
|
December 29, 2018 |
Sales |
$ |
10,815 |
|
|
$ |
10,193 |
|
Cost of Sales |
9,375 |
|
|
8,838 |
|
Gross Profit |
1,440 |
|
|
1,355 |
|
|
|
|
|
Selling, General and
Administrative |
614 |
|
|
548 |
|
Operating Income |
826 |
|
|
807 |
|
Other (Income) Expense: |
|
|
|
Interest income |
(3 |
) |
|
(2 |
) |
Interest expense |
120 |
|
|
99 |
|
Other, net |
(16 |
) |
|
(3 |
) |
Total Other (Income)
Expense |
101 |
|
|
94 |
|
Income before Income
Taxes |
725 |
|
|
713 |
|
Income Tax Expense
(Benefit) |
164 |
|
|
161 |
|
Net Income |
561 |
|
|
552 |
|
Less: Net Income Attributable
to Noncontrolling Interests |
4 |
|
|
1 |
|
Net Income Attributable to
Tyson |
$ |
557 |
|
|
$ |
551 |
|
Weighted Average Shares
Outstanding: |
|
|
|
Class A Basic |
293 |
|
|
294 |
|
Class B Basic |
70 |
|
|
70 |
|
Diluted |
367 |
|
|
366 |
|
Net Income Per Share
Attributable to Tyson: |
|
|
|
Class A Basic |
$ |
1.56 |
|
|
$ |
1.54 |
|
Class B Basic |
$ |
1.40 |
|
|
$ |
1.39 |
|
Diluted |
$ |
1.52 |
|
|
$ |
1.50 |
|
Dividends Declared Per
Share: |
|
|
|
Class A |
$ |
0.465 |
|
|
$ |
0.450 |
|
Class B |
$ |
0.419 |
|
|
$ |
0.405 |
|
|
|
|
|
Sales Growth |
6.1 |
% |
|
|
Margins: (Percent of
Sales) |
|
|
|
Gross Profit |
13.3 |
% |
|
13.3 |
% |
Operating Income |
7.6 |
% |
|
7.9 |
% |
Net Income Attributable to Tyson |
5.2 |
% |
|
5.4 |
% |
Effective Tax Rate |
22.7 |
% |
|
22.6 |
% |
|
|
|
|
|
|
TYSON FOODS,
INC.CONSOLIDATED CONDENSED BALANCE
SHEETS(In
millions)(Unaudited)
|
December 28, 2019 |
|
September 28, 2019 |
Assets |
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$ |
497 |
|
|
$ |
484 |
|
Accounts receivable, net |
2,063 |
|
|
2,173 |
|
Inventories |
4,304 |
|
|
4,108 |
|
Other current assets |
329 |
|
|
404 |
|
Total Current Assets |
7,193 |
|
|
7,169 |
|
Net Property, Plant and
Equipment |
7,384 |
|
|
7,282 |
|
Goodwill |
10,862 |
|
|
10,844 |
|
Intangible Assets, net |
6,975 |
|
|
7,037 |
|
Other Assets |
1,397 |
|
|
765 |
|
Total Assets |
$ |
33,811 |
|
|
$ |
33,097 |
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
Current Liabilities: |
|
|
|
Current debt |
$ |
1,947 |
|
|
$ |
2,102 |
|
Accounts payable |
1,916 |
|
|
1,926 |
|
Other current liabilities |
1,673 |
|
|
1,485 |
|
Total Current Liabilities |
5,536 |
|
|
5,513 |
|
Long-Term Debt |
9,772 |
|
|
9,830 |
|
Deferred Income Taxes |
2,369 |
|
|
2,356 |
|
Other Liabilities |
1,568 |
|
|
1,172 |
|
|
|
|
|
Total Tyson Shareholders’
Equity |
14,419 |
|
|
14,082 |
|
Noncontrolling Interests |
147 |
|
|
144 |
|
Total Shareholders’
Equity |
14,566 |
|
|
14,226 |
|
|
|
|
|
Total Liabilities and
Shareholders’ Equity |
$ |
33,811 |
|
|
$ |
33,097 |
|
|
|
|
|
|
|
|
|
TYSON FOODS,
INC.CONSOLIDATED CONDENSED STATEMENTS OF CASH
FLOWS(In
millions)(Unaudited)
|
Three Months Ended |
|
December 28, 2019 |
|
December 29, 2018 |
Cash Flows From Operating
Activities: |
|
|
|
Net income |
$ |
561 |
|
|
$ |
552 |
|
Depreciation and amortization |
288 |
|
|
250 |
|
Deferred income taxes |
3 |
|
|
18 |
|
Other, net |
27 |
|
|
64 |
|
Net changes in operating assets and liabilities |
15 |
|
|
(16 |
) |
Cash Provided by Operating
Activities |
894 |
|
|
868 |
|
|
|
|
|
Cash Flows From Investing
Activities: |
|
|
|
Additions to property, plant and equipment |
(312 |
) |
|
(318 |
) |
Purchases of marketable securities |
(35 |
) |
|
(15 |
) |
Proceeds from sale of marketable securities |
19 |
|
|
15 |
|
Acquisitions, net of cash acquired |
— |
|
|
(2,141 |
) |
Proceeds from sale of business |
29 |
|
|
— |
|
Other, net |
(82 |
) |
|
10 |
|
Cash Used for Investing
Activities |
(381 |
) |
|
(2,449 |
) |
|
|
|
|
Cash Flows From Financing
Activities: |
|
|
|
Proceeds from issuance of debt |
38 |
|
|
1,807 |
|
Payments on debt |
(31 |
) |
|
(12 |
) |
Borrowings on revolving credit facility |
180 |
|
|
— |
|
Payments on revolving credit facility |
(250 |
) |
|
— |
|
Proceeds from issuance of commercial paper |
4,675 |
|
|
5,538 |
|
Repayments of commercial paper |
(4,855 |
) |
|
(5,406 |
) |
Purchases of Tyson Class A common stock |
(132 |
) |
|
(83 |
) |
Dividends |
(150 |
) |
|
(134 |
) |
Stock options exercised |
20 |
|
|
3 |
|
Other, net |
(2 |
) |
|
(2 |
) |
Cash (Used for) Provided
by Financing Activities |
(507 |
) |
|
1,711 |
|
Effect of Exchange Rate
Changes on Cash |
7 |
|
|
— |
|
Increase in Cash and Cash
Equivalents |
13 |
|
|
130 |
|
Cash and Cash Equivalents at
Beginning of Year |
484 |
|
|
270 |
|
Cash and Cash Equivalents at
End of Period |
$ |
497 |
|
|
$ |
400 |
|
|
|
|
|
|
|
|
|
TYSON FOODS, INC.EBITDA
Reconciliations(In
millions)(Unaudited)
|
Three Months Ended |
|
Fiscal Year Ended |
Twelve Months Ended |
|
December 28, 2019 |
|
December 29, 2018 |
|
September 28, 2019 |
December 28, 2019 |
|
|
|
|
|
|
|
Net income |
$ |
561 |
|
|
$ |
552 |
|
|
$ |
2,035 |
|
$ |
2,044 |
|
Less: Interest income |
(3 |
) |
|
(2 |
) |
|
(11 |
) |
(12 |
) |
Add: Interest expense |
120 |
|
|
99 |
|
|
462 |
|
483 |
|
Add: Income tax expense |
164 |
|
|
161 |
|
|
396 |
|
399 |
|
Add: Depreciation |
217 |
|
|
184 |
|
|
819 |
|
852 |
|
Add: Amortization (a) |
68 |
|
|
63 |
|
|
267 |
|
272 |
|
EBITDA |
$ |
1,127 |
|
|
$ |
1,057 |
|
|
$ |
3,968 |
|
$ |
4,038 |
|
|
|
|
|
|
|
|
Adjustments to EBITDA: |
|
|
|
|
|
|
Add: Keystone purchase
accounting and acquisition related costs (b) |
— |
|
|
26 |
|
|
37 |
|
11 |
|
Add: Impairments net of
realized gains associated with the divestiture of businesses
(c) |
— |
|
|
— |
|
|
41 |
|
41 |
|
Add: Restructuring and related
charges |
52 |
|
|
8 |
|
|
41 |
|
85 |
|
Add: Beef production facility
fire costs, net of insurance proceeds |
16 |
|
|
— |
|
|
31 |
|
47 |
|
Add: Pension plan termination
charge |
— |
|
|
— |
|
|
15 |
|
15 |
|
Less: Gain on sale of
investment |
— |
|
|
— |
|
|
(55 |
) |
(55 |
) |
Total Adjusted EBITDA |
$ |
1,195 |
|
|
$ |
1,091 |
|
|
$ |
4,078 |
|
$ |
4,182 |
|
|
|
|
|
|
|
|
Total gross debt |
|
|
|
|
$ |
11,932 |
|
$ |
11,719 |
|
Less: Cash and cash
equivalents |
|
|
|
|
(484 |
) |
(497 |
) |
Less: Short-term
investments |
|
|
|
|
(1 |
) |
(1 |
) |
Total net debt |
|
|
|
|
$ |
11,447 |
|
$ |
11,221 |
|
|
|
|
|
|
|
|
Ratio Calculations: |
|
|
|
|
|
|
Gross debt/EBITDA |
|
|
|
|
|
3.0x |
|
|
2.9x |
|
Net debt/EBITDA |
|
|
|
|
|
2.9x |
|
|
2.8x |
|
|
|
|
|
|
|
|
|
|
|
|
Gross debt/Adjusted
EBITDA |
|
|
|
|
|
2.9x |
|
|
2.8x |
|
Net debt/Adjusted EBITDA |
|
|
|
|
|
2.8x |
|
|
2.7x |
|
(a) |
|
Excludes the amortization of debt issuance and debt discount
expense of $3 million for the three months ended December 28,
2019, and December 29, 2018, $12 million for the fiscal year
ended September 28, 2019 and $12 million for the twelve months
ended December 28, 2019 as it is included in interest
expense. |
(b) |
|
Keystone acquisition and integration costs included $11 million
of purchase accounting adjustments and $15 million of acquisition
related costs for the three months ended December 29, 2018 and
included $11 million of purchase accounting adjustments and $26
million acquisition related costs for the fiscal year ended
September 28, 2019. |
(c) |
|
The fiscal year ended September 28, 2019 included a $41
million impairment associated with the planned divestiture of a
business. |
EBITDA is defined as net income before interest, income taxes,
depreciation and amortization. Net debt to EBITDA (Adjusted EBITDA)
represents the ratio of our debt, net of cash, cash equivalents 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
a 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, 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 may limit 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)
|
First Quarter |
|
Pretax Impact |
|
EPS Impact |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
Reported net income per share
attributable to Tyson |
|
|
|
|
$ |
1.52 |
|
|
$ |
1.50 |
|
|
|
|
|
|
|
|
|
Add: Restructuring and related charges |
$ |
52 |
|
|
$ |
8 |
|
|
0.11 |
|
|
0.02 |
|
|
|
|
|
|
|
|
|
Add: Beef production facility
fire costs, net of insurance proceeds |
$ |
16 |
|
|
$ |
— |
|
|
0.03 |
|
|
— |
|
|
|
|
|
|
|
|
|
Add: Keystone purchase
accounting and acquisition related costs (a) |
$ |
— |
|
|
$ |
26 |
|
|
— |
|
|
0.06 |
|
|
|
|
|
|
|
|
|
Adjusted net income per share
attributable to Tyson |
|
|
|
|
$ |
1.66 |
|
|
$ |
1.58 |
|
(a) |
|
Keystone purchase accounting and acquisition related costs for
the first quarter of fiscal 2019 included an $11 million purchase
accounting adjustment for the fair value step-up of inventory and
$15 million of acquisition related costs. |
Adjusted net income per share attributable to Tyson (Adjusted
EPS) is presented as a supplementary measure of our financial
performance that is not required by, or presented in accordance
with, GAAP. We use Adjusted EPS as an internal performance
measurement and as one criterion for evaluating our performance
relative to that of our peers. We believe Adjusted EPS is
meaningful to our investors to enhance their understanding of our
financial performance and is frequently used by securities
analysts, investors and other interested parties to compare our
performance with the performance of other companies that report
Adjusted EPS. Further, we believe that Adjusted EPS is a useful
measure because it improves comparability of results of operations
from period to period. Adjusted EPS should not be considered a
substitute for net income per share attributable to Tyson or any
other 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. Our calculation of Adjusted EPS may not be
comparable to similarly titled measures reported by other
companies.
Adjusted EPS guidance is provided on a non-GAAP basis. The
Company is not able to reconcile its full-year fiscal 2020 Adjusted
EPS guidance to its full-year fiscal 2020 projected GAAP EPS
guidance because certain information necessary to calculate such
measure on a GAAP basis is unavailable or dependent on the timing
of future events outside of our control. Therefore, because of the
uncertainty and variability of the nature of the amount of future
adjustments, which could be significant, the Company is unable to
provide a reconciliation of this measure without unreasonable
effort.
TYSON FOODS,
INC.Operating Income
Reconciliation(In
millions)(Unaudited)
Adjusted Operating Income (Loss) |
(for the first quarter ended December 28, 2019) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income (loss) |
$ |
410 |
|
$ |
191 |
|
$ |
57 |
|
$ |
158 |
|
$ |
10 |
|
$ |
826 |
|
Add: Restructuring and related
charges |
5 |
|
2 |
|
21 |
|
22 |
|
2 |
|
52 |
|
Add: Beef production facility
fire costs, net of insurance proceeds |
16 |
|
— |
|
— |
|
— |
|
— |
|
16 |
|
Adjusted operating income
(loss) |
$ |
431 |
|
$ |
193 |
|
$ |
78 |
|
$ |
180 |
|
$ |
12 |
|
$ |
894 |
|
Adjusted Operating Income (Loss) |
(for the first quarter ended December 29, 2018) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income (loss) |
$ |
305 |
|
$ |
95 |
|
$ |
160 |
|
$ |
265 |
|
$ |
(18 |
) |
$ |
807 |
|
Add: Restructuring and related charges |
— |
|
— |
|
5 |
|
3 |
|
— |
|
8 |
|
Add: Keystone purchase accounting
and acquisition related costs |
— |
|
— |
|
8 |
|
— |
|
18 |
|
26 |
|
Adjusted operating income
(loss) |
$ |
305 |
|
$ |
95 |
|
$ |
173 |
|
$ |
268 |
|
$ |
— |
|
$ |
841 |
|
Adjusted operating income is presented as a supplementary
measure of our operating performance that is not required by, or
presented in accordance with, GAAP. We use adjusted operating
income as an internal performance measurement and as one criterion
for evaluating our performance relative to that of our peers. We
believe adjusted operating income is meaningful to our investors to
enhance their understanding of our operating performance and is
frequently used by securities analysts, investors and other
interested parties to compare our performance with the performance
of other companies that report adjusted operating income. Further,
we believe that adjusted operating income is a useful measure
because it improves comparability of results of operations from
period to period. Adjusted operating income should not be
considered as a substitute for operating income or any other
measure of operating 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. Our calculation of adjusted operating income
may not be comparable to similarly titled measures reported by
other companies.
Tyson Foods, Inc. (NYSE: TSN) is one of the world’s largest food
companies and a recognized leader in protein. Founded in 1935 by
John W. Tyson and grown under three generations of family
leadership, the company has a broad portfolio of products and
brands like Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®,
Wright®, Aidells®, ibp® and State Fair®. Tyson Foods innovates
continually to make protein more sustainable, tailor food for
everywhere it’s available and raise the world’s expectations for
how much good food can do. Headquartered in Springdale, Arkansas,
the company had 141,000 team members at September 28, 2019. Through
its Core Values, Tyson Foods strives to operate with integrity,
create value for its shareholders, customers, communities and team
members and serve as a steward of the animals, land and environment
entrusted to it. Visit http://www.tysonfoods.com.
A conference call to discuss the Company's financial results
will be held at 9 a.m. Eastern Thursday, February 6, 2020. We
encourage participants to pre-register for the conference call
using the following link: http://dpregister.com/10138337. Callers
who pre-register will be given a conference passcode and unique PIN
to gain immediate access to the call and bypass the live
operator. Participants may pre-register at any time, including
up to and after the call has started. Those without internet access
or who are unable to pre-register may dial-in by calling toll free
1-844-890-1795 or international toll 1-412-717-9589.
To listen to the live webcast, an archived replay or to view the
accompanying slides, go to the company’s investor website at
http://ir.tyson.com. The webcast also can be accessed by using the
direct link
https://event.on24.com/wcc/r/2150700/8373138FC7B7ED14A1C0DF4D03260766.
A telephone replay of the call will be available until March 6,
2020, toll free at 1-877-344-7529, international toll
1-412-317-0088 or Canada toll free 855-669-9658. The replay access
code is 10138337. 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 Tyson Foods’ 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 StatementsCertain information
in this report constitutes forward-looking statements. Such
forward-looking statements include, but are not limited to, current
views and estimates of our outlook for fiscal 2020, other future
economic circumstances, industry conditions in domestic and
international markets, our performance and financial results (e.g.,
debt levels, return on invested capital, value-added product
growth, capital expenditures, tax rates, access to foreign markets
and dividend policy). These forward-looking statements are subject
to a number of factors and uncertainties that could cause our
actual results and experiences to differ materially from
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. We undertake no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise. 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) 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; (ii) 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; (iii) outbreak of a livestock disease (such
as African swine fever (ASF), 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; (iv) the
effectiveness of our financial fitness program; (v) the
implementation of an enterprise resource planning system; (vi)
access to foreign markets together with foreign economic
conditions, including currency fluctuations, import/export
restrictions and foreign politics; (vii) changes in availability
and relative costs of labor and contract farmers and our ability to
maintain good relationships with employees, labor unions, contract
farmers and independent producers providing us livestock; (viii)
issues related to food safety, including costs resulting from
product recalls, regulatory compliance and any related claims or
litigation; (ix) changes in consumer preference and diets and our
ability to identify and react to consumer trends; (x) effectiveness
of advertising and marketing programs; (xi) our ability to leverage
brand value propositions; (xii) risks associated with leverage,
including cost increases due to rising interest rates or changes in
debt ratings or outlook; (xiii) impairment in the carrying value of
our goodwill or indefinite life intangible assets; (xiv) 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; (xv) adverse results from litigation; (xvi) cyber
incidents, security breaches or other disruptions of our
information technology systems; (xvii) our ability to make
effective acquisitions or joint ventures and successfully integrate
newly acquired businesses into existing operations; (xviii) risks
associated with our commodity purchasing activities; (xix) the
effect of, or changes in, general economic conditions; (xx)
significant marketing plan changes by large customers or loss of
one or more large customers; (xxi) impacts on our operations caused
by factors and forces beyond our control, such as natural
disasters, fire, bioterrorism, pandemics or extreme weather; (xxii)
failure to maximize or assert our intellectual property rights;
(xxiii) our participation in multiemployer pension plans; (xxiv)
the Tyson Limited Partnership’s ability to exercise significant
control over the Company; (xxv) effects related to changes in tax
rates, valuation of deferred tax assets and liabilities, or tax
laws and their interpretation; (xxvi) volatility in capital markets
or interest rates; (xxvii) risks associated with our failure to
integrate Keystone Foods’ operations or to realize the targeted
cost savings, revenues and other benefits of the acquisition; and
(xxviii) those factors listed under Item 1A. “Risk Factors”
included in our Annual Report filed on Form 10-K for the period
ended September 28, 2019.
Media Contact: Gary Mickelson, 479-290-6111Investor
Contact: Jon Kathol, 479-290-4235 |
Source: Tyson Foods, Inc.Category: IR, Newsroom |
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