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) |
Third Quarter |
|
Nine Months Ended |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Sales |
$ |
13,495 |
|
$ |
12,478 |
|
$ |
39,545 |
|
$ |
34,238 |
Operating Income |
|
1,033 |
|
|
1,062 |
|
|
3,644 |
|
|
2,487 |
|
|
|
|
|
|
|
|
Net Income |
|
753 |
|
|
753 |
|
|
2,712 |
|
|
1,702 |
Less: Net Income Attributable
to Noncontrolling Interests |
|
3 |
|
|
4 |
|
|
12 |
|
|
10 |
Net Income Attributable to
Tyson |
$ |
750 |
|
$ |
749 |
|
$ |
2,700 |
|
$ |
1,692 |
|
|
|
|
|
|
|
|
Net Income Per Share
Attributable to Tyson |
$ |
2.07 |
|
$ |
2.05 |
|
$ |
7.42 |
|
$ |
4.63 |
|
|
|
|
|
|
|
|
Adjusted1 Operating
Income |
$ |
998 |
|
$ |
1,372 |
|
$ |
3,591 |
|
$ |
3,136 |
|
|
|
|
|
|
|
|
Adjusted1 Net Income Per Share
Attributable to Tyson |
$ |
1.94 |
|
$ |
2.70 |
|
$ |
7.10 |
|
$ |
5.98 |
1 The Company reports its financial results in accordance with
U.S. generally accepted accounting principles (GAAP). Adjusted
operating income and adjusted net income per share attributable to
Tyson (Adjusted EPS) are non-GAAP financial measures. Refer to the
end of this release for an explanation and reconciliation of these
and other non-GAAP financial measures used in this release to
comparable GAAP measures.
First Nine Months Highlights
- GAAP EPS of $7.42, up 60% from prior year; Adjusted EPS
of $7.10, up 19% from prior year
- GAAP operating income of $3,644 million, up 47% from
prior year; Adjusted operating income of $3,591 million, up 15%
from prior year
- Total Company GAAP operating margin of 9.2%; Adjusted
operating margin of 9.1%
- Repurchased 8.1 million shares for $693
million
- Reduced total debt by approximately $1
billion
Third Quarter Highlights
- GAAP EPS of $2.07, up 1% from prior year; Adjusted EPS
of $1.94, down 28% from prior year
- GAAP operating income of $1,033 million, down 3% from
prior year; Adjusted operating income of $998 million, down 27%
from prior year
- Total Company GAAP operating margin of 7.7%; Adjusted
operating margin of 7.4%
- Liquidity of $3.3 billion at July 2, 2022
“We delivered solid results during the third quarter, focusing
on operational excellence and aggressive cost management," said
Donnie King, president and CEO of Tyson Foods. "The turnaround of
our chicken business continues, and we continue to be the market
share leader in many of our retail business lines, which include
our Tyson, Jimmy Dean, Hillshire Farm and Ball Park iconic
brands.”
"We maintained double-digit sales and earnings growth year to
date as well as progressing toward our goal of delivering more than
$1 billion in recurring productivity savings by the end of fiscal
2024."
"I'm optimistic about our ability to win with our team members,
win with our customers and consumers and win with excellence in
execution."
SEGMENT RESULTS (in millions)
Sales |
(for the third quarter and nine months ended July 2, 2022, and July
3, 2021) |
|
Third Quarter |
Nine Months Ended |
|
|
|
Volume |
Avg. Price |
|
|
Volume |
Avg. Price |
|
|
2022 |
|
|
2021 |
|
Change |
Change 2 |
|
2022 |
|
|
2021 |
|
Change |
Change 2 |
Beef |
$ |
4,959 |
|
$ |
4,954 |
|
1.3 |
% |
(1.2 |
)% |
$ |
14,995 |
|
$ |
12,987 |
|
(1.5 |
)% |
17.0 |
% |
Pork |
|
1,619 |
|
|
1,715 |
|
(1.7 |
)% |
(3.9 |
)% |
|
4,810 |
|
|
4,631 |
|
(2.1 |
)% |
6.0 |
% |
Chicken |
|
4,366 |
|
|
3,476 |
|
(2.1 |
)% |
20.1 |
% |
|
12,342 |
|
|
9,860 |
|
0.7 |
% |
17.9 |
% |
Prepared
Foods |
|
2,447 |
|
|
2,323 |
|
(8.5 |
)% |
13.8 |
% |
|
7,173 |
|
|
6,600 |
|
(5.5 |
)% |
14.2 |
% |
International/Other |
|
602 |
|
|
488 |
|
21.9 |
% |
1.5 |
% |
|
1,717 |
|
|
1,444 |
|
11.7 |
% |
7.2 |
% |
Intersegment
Sales |
|
(498 |
) |
|
(478 |
) |
n/a |
n/a |
|
(1,492 |
) |
|
(1,284 |
) |
n/a |
n/a |
Total |
$ |
13,495 |
|
$ |
12,478 |
|
(1.9 |
)% |
8.1 |
% |
$ |
39,545 |
|
$ |
34,238 |
|
(1.0 |
)% |
14.7 |
% |
Operating Income (Loss) |
(for the third quarter and nine months ended July 2, 2022, and July
3, 2021) |
|
Third Quarter |
Nine Months Ended |
|
|
|
Operating Margin |
|
|
Operating Margin |
|
2022 |
2021 |
2022 |
2021 |
2022 |
2021 |
2022 |
2021 |
Beef |
$ |
533 |
|
$ |
1,120 |
|
10.7 |
% |
22.6 |
% |
$ |
2,127 |
|
$ |
2,093 |
|
14.2 |
% |
16.1 |
% |
Pork |
|
25 |
|
|
67 |
|
1.5 |
% |
3.9 |
% |
|
248 |
|
|
250 |
|
5.2 |
% |
5.4 |
% |
Chicken |
|
277 |
|
|
(279 |
) |
6.3 |
% |
(8.0 |
)% |
|
615 |
|
|
(489 |
) |
5.0 |
% |
(5.0 |
)% |
Prepared
Foods |
|
186 |
|
|
150 |
|
7.6 |
% |
6.5 |
% |
|
635 |
|
|
633 |
|
8.9 |
% |
9.6 |
% |
International/Other |
|
12 |
|
|
4 |
|
n/a |
n/a |
|
19 |
|
|
— |
|
n/a |
n/a |
Total |
$ |
1,033 |
|
$ |
1,062 |
|
7.7 |
% |
8.5 |
% |
$ |
3,644 |
|
$ |
2,487 |
|
9.2 |
% |
7.3 |
% |
ADJUSTED SEGMENT RESULTS (in millions)
Adjusted Operating Income (Non-GAAP) |
(for the third quarter and nine months ended July 2, 2022, and July
3, 2021) |
|
Third Quarter |
Nine Months Ended |
|
|
|
Adjusted Operating Margin (Non-GAAP) |
|
|
Adjusted Operating Margin (Non-GAAP) |
|
|
2022 |
|
|
2021 |
|
2022 |
2021 2 |
|
2022 |
|
|
2021 |
|
2022 |
2021 2 |
Beef |
$ |
506 |
|
$ |
1,120 |
|
10.2 |
% |
22.6 |
% |
$ |
2,100 |
|
$ |
2,093 |
|
14.0 |
% |
16.1 |
% |
Pork |
|
25 |
|
|
67 |
|
1.5 |
% |
3.9 |
% |
|
248 |
|
|
250 |
|
5.2 |
% |
5.4 |
% |
Chicken |
|
269 |
|
|
27 |
|
6.2 |
% |
0.7 |
% |
|
589 |
|
|
137 |
|
4.8 |
% |
1.3 |
% |
Prepared
Foods |
|
186 |
|
|
150 |
|
7.6 |
% |
6.5 |
% |
|
635 |
|
|
633 |
|
8.9 |
% |
9.6 |
% |
International/Other |
|
12 |
|
|
8 |
|
n/a |
n/a |
|
19 |
|
|
23 |
|
n/a |
n/a |
Total |
$ |
998 |
|
$ |
1,372 |
|
7.4 |
% |
10.8 |
% |
$ |
3,591 |
|
$ |
3,136 |
|
9.1 |
% |
9.0 |
% |
2 Average Price Change and Adjusted Operating Margin for the
Chicken Segment and Total Company exclude the impact of $225
million and $545 million for the three and nine months ended July
3, 2021, respectively, of legal contingency accruals recognized as
a reduction of Sales.
SUMMARY OF SEGMENT RESULTS
BeefSales volume decreased for the first nine
months of fiscal 2022 despite strong global demand, due to the
impacts associated with a challenging labor environment and supply
chain constraints. Sales volume increased in the third quarter of
fiscal 2022 driven by a strong global demand environment, partially
offset by a challenging labor environment and continued supply
chain constraints. Average sales price increased in the first nine
months of fiscal 2022 as input costs such as live cattle, labor,
freight and transportation costs increased and demand for our beef
products remained strong. Average sales price decreased slightly in
the third quarter of fiscal 2022 driven by reduced demand for
premium cuts of beef as compared to exceptionally high demand in
the third quarter of fiscal 2021. Operating income increased
slightly during the first nine months of fiscal 2022 due to strong
demand as we continued to optimize revenues relative to live cattle
supply and a reduction in direct incremental expenses related to
COVID-19, partially offset by production inefficiencies due to the
impacts associated with a challenging labor environment and
continued supply chain constraints. Additionally, operating income
in fiscal 2021 was impacted by a $55 million gain from the recovery
of cattle inventory related to a cattle supplier's misappropriation
of Company funds. Operating income decreased in the third quarter
of fiscal 2022 as margins began to reduce from historically high
levels paired with continued increased operating costs.
Additionally, operating income in the third quarter of fiscal 2022
benefited from $27 million of insurance proceeds related to a fire
at a production facility in the fourth quarter of fiscal 2019.
PorkSales volume decreased in the third quarter
and first nine months of fiscal 2022 due to reduced global demand.
Average sales price decreased in the third quarter due to reduced
export and retail demand. Average sales price increased in the
first nine months of fiscal 2022 as input costs such as live hogs,
labor, freight and transportation costs increased, partially offset
by unfavorable mix associated with labor shortages. Operating
income decreased in the third quarter of fiscal 2022 due to periods
of compressed pork margins. Operating income for the first nine
months of fiscal 2022 was relatively flat as reduced direct
incremental expenses related to COVID-19 were offset by higher
inputs costs and the impacts associated with a challenging labor
environment.
ChickenSales volume decreased in the third
quarter of fiscal 2022 primarily due to a reduction in volumes
related to a fire at a production facility in the fourth quarter of
fiscal 2021 and a reduction in outside meat purchases. Sales volume
increased slightly in the first nine months of fiscal 2022
primarily due to strong global demand partially offset by a
reduction in volumes related to a fire at a production facility in
the fourth quarter of fiscal 2021. Average sales price increased in
the third quarter and first nine months of fiscal 2022 due to the
effects of pricing initiatives in an inflationary cost environment.
Operating income increased in the third quarter and first nine
months of fiscal 2022 primarily due to higher average sales prices,
partially offset by the impacts of inflationary market conditions
including increased supply chain and labor costs. In the third
quarter of fiscal 2022, we experienced $145 million of higher feed
ingredient costs and $23 million of net derivative losses as
compared to $56 million of net derivative gains in the third
quarter of fiscal 2021. In the first nine months of fiscal 2022, we
experienced $430 million of higher feed ingredient costs.
Additionally, operating income in the first nine months of fiscal
2022 benefited from $26 million of insurance proceeds, net of costs
incurred related to a fire at a production facility and was
impacted in the third quarter and first nine months of fiscal 2021
by $306 million and $626 million of losses, respectively, from the
recognition of legal contingency accruals.
Prepared FoodsSales volume decreased in the
third quarter and first nine months of fiscal 2022 due to the
impacts of increased pricing, uneven foodservice recovery, the
divestiture of our pet treats business in the fourth quarter of
fiscal 2021 and a challenging supply environment impacting the
first half of fiscal 2022. Average sales price increased in the
third quarter and first nine months of fiscal 2022 primarily due to
the effects of revenue management in an inflationary cost
environment. Operating income increased in the third quarter of
fiscal 2022 due to higher average sales prices, partially offset by
the impacts of inflationary market conditions, including $135
million of increased raw materials and other input costs in
addition to increased supply chain and labor costs. Operating
income was relatively flat in the first nine months of fiscal 2022
as higher average sales prices were offset by the impacts of
inflationary market conditions, including $560 million of increased
raw materials and other input costs in addition to increased supply
chain and labor costs.
OUTLOOKFor fiscal 2022, the United States
Department of Agriculture (USDA) indicates domestic protein
production (beef, pork, chicken and turkey) should be relatively
flat compared to fiscal 2021 levels. The following is a summary of
the outlook for each of our segments, as well as an outlook for
revenues, capital expenditures, net interest expense, liquidity and
tax rate for fiscal 2022.3
Beginning in fiscal 2022, we launched a new productivity
program, which is designed to drive a better, faster and more agile
organization that is supported by a culture of continuous
improvement and faster decision making. We are targeting $1 billion
in productivity savings by the end of fiscal 2024 and more than
$400 million in fiscal 2022, relative to a fiscal 2021 cost
baseline. We are currently on track to achieve our planned
productivity savings for fiscal 2022.
BeefUSDA projects domestic production will
increase approximately 1% in fiscal 2022 as compared to fiscal
2021. We anticipate another strong year with adjusted operating
margin between 11% and 13% in fiscal 2022.
PorkUSDA projects domestic production will
decrease approximately 3% in fiscal 2022 as compared to fiscal
2021. We believe our Pork segment's adjusted operating margin will
be 3% to 5% in fiscal 2022.
ChickenUSDA projects chicken production will
increase approximately 1% in fiscal 2022 as compared to fiscal
2021. We anticipate an adjusted operating margin of 5% to 7% for
fiscal 2022.
Prepared FoodsWe believe our adjusted operating
margin will be between 8% and 10% in fiscal 2022. We will remain
disciplined in our revenue management to ensure that additional
inflationary pressures are mitigated by sales price increases,
while also working diligently to deliver productivity savings to
reduce costs.
International/OtherWe anticipate lower results
from our foreign operations in fiscal 2022 due to supply chain
disruptions and other impacts related to COVID-19.
RevenueWe expect sales to be $52 billion to $54
billion in fiscal 2022.
Capital ExpendituresWe expect capital
expenditures of approximately $1.9 billion for fiscal 2022. Capital
expenditures include spending for capacity expansion and
utilization, automation to alleviate labor challenges and brand and
product innovation.
Net Interest ExpenseWe expect net interest
expense to approximate $350 million for fiscal 2022.
LiquidityWe expect total liquidity, which was
approximately $3.3 billion at July 2, 2022, to remain above
our minimum liquidity target of $1.0 billion.
Tax RateWe currently expect our adjusted
effective tax rate to approximate 22.5% in fiscal 2022.
3 The Company is not able to reconcile its full-year fiscal 2022
projected adjusted results to its fiscal 2022 projected GAAP
results because certain information necessary to calculate such
measures 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, such as legal contingency accruals and other
significant items which could be significant, the Company is unable
to provide a reconciliation for these forward-looking non-GAAP
measures without unreasonable effort. Adjusted operating margin
should not be considered a substitute for operating margin or any
other measures 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 |
|
Nine Months Ended |
|
July 2, 2022 |
|
July 3, 2021 |
|
July 2, 2022 |
|
July 3, 2021 |
Sales |
$ |
13,495 |
|
|
$ |
12,478 |
|
|
$ |
39,545 |
|
|
$ |
34,238 |
|
Cost of Sales |
|
11,884 |
|
|
|
10,858 |
|
|
|
34,184 |
|
|
|
30,188 |
|
Gross Profit |
|
1,611 |
|
|
|
1,620 |
|
|
|
5,361 |
|
|
|
4,050 |
|
|
|
|
|
|
|
|
|
Selling, General and
Administrative |
|
578 |
|
|
|
558 |
|
|
|
1,717 |
|
|
|
1,563 |
|
Operating Income |
|
1,033 |
|
|
|
1,062 |
|
|
|
3,644 |
|
|
|
2,487 |
|
Other (Income) Expense: |
|
|
|
|
|
|
|
Interest income |
|
(4 |
) |
|
|
(2 |
) |
|
|
(10 |
) |
|
|
(6 |
) |
Interest expense |
|
85 |
|
|
|
105 |
|
|
|
282 |
|
|
|
325 |
|
Other, net |
|
(34 |
) |
|
|
(7 |
) |
|
|
(111 |
) |
|
|
(38 |
) |
Total Other (Income)
Expense |
|
47 |
|
|
|
96 |
|
|
|
161 |
|
|
|
281 |
|
Income before Income
Taxes |
|
986 |
|
|
|
966 |
|
|
|
3,483 |
|
|
|
2,206 |
|
Income Tax Expense |
|
233 |
|
|
|
213 |
|
|
|
771 |
|
|
|
504 |
|
Net Income |
|
753 |
|
|
|
753 |
|
|
|
2,712 |
|
|
|
1,702 |
|
Less: Net Income Attributable
to Noncontrolling Interests |
|
3 |
|
|
|
4 |
|
|
|
12 |
|
|
|
10 |
|
Net Income Attributable to
Tyson |
$ |
750 |
|
|
$ |
749 |
|
|
$ |
2,700 |
|
|
$ |
1,692 |
|
Weighted Average Shares
Outstanding: |
|
|
|
|
|
|
|
Class A Basic |
|
289 |
|
|
|
293 |
|
|
|
291 |
|
|
|
293 |
|
Class B Basic |
|
70 |
|
|
|
70 |
|
|
|
70 |
|
|
|
70 |
|
Diluted |
|
362 |
|
|
|
366 |
|
|
|
364 |
|
|
|
365 |
|
Net Income Per Share
Attributable to Tyson: |
|
|
|
|
|
|
|
Class A Basic |
$ |
2.14 |
|
|
$ |
2.11 |
|
|
$ |
7.64 |
|
|
$ |
4.76 |
|
Class B Basic |
$ |
1.92 |
|
|
$ |
1.89 |
|
|
$ |
6.87 |
|
|
$ |
4.27 |
|
Diluted |
$ |
2.07 |
|
|
$ |
2.05 |
|
|
$ |
7.42 |
|
|
$ |
4.63 |
|
Dividends Declared Per
Share: |
|
|
|
|
|
|
|
Class A |
$ |
0.460 |
|
|
$ |
0.445 |
|
|
$ |
1.395 |
|
|
$ |
1.360 |
|
Class B |
$ |
0.414 |
|
|
$ |
0.400 |
|
|
$ |
1.256 |
|
|
$ |
1.224 |
|
|
|
|
|
|
|
|
|
Sales Growth |
|
8.2 |
% |
|
|
|
|
15.5 |
% |
|
|
Margins: (Percent of
Sales) |
|
|
|
|
|
|
|
Gross Profit |
|
11.9 |
% |
|
|
13.0 |
% |
|
|
13.6 |
% |
|
|
11.8 |
% |
Operating Income |
|
7.7 |
% |
|
|
8.5 |
% |
|
|
9.2 |
% |
|
|
7.3 |
% |
Net Income Attributable to Tyson |
|
5.6 |
% |
|
|
6.0 |
% |
|
|
6.8 |
% |
|
|
4.9 |
% |
Effective Tax Rate |
|
23.6 |
% |
|
|
22.1 |
% |
|
|
22.1 |
% |
|
|
22.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TYSON FOODS,
INC.CONSOLIDATED CONDENSED BALANCE
SHEETS(In
millions)(Unaudited)
|
July 2, 2022 |
|
October 2, 2021 |
Assets |
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$ |
1,056 |
|
|
$ |
2,507 |
|
Accounts receivable, net |
|
2,518 |
|
|
|
2,400 |
|
Inventories |
|
5,332 |
|
|
|
4,382 |
|
Other current assets |
|
397 |
|
|
|
533 |
|
Total Current Assets |
|
9,303 |
|
|
|
9,822 |
|
Net Property, Plant and
Equipment |
|
8,393 |
|
|
|
7,837 |
|
Goodwill |
|
10,531 |
|
|
|
10,549 |
|
Intangible Assets, net |
|
6,325 |
|
|
|
6,519 |
|
Other Assets |
|
1,693 |
|
|
|
1,582 |
|
Total Assets |
$ |
36,245 |
|
|
$ |
36,309 |
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
Current Liabilities: |
|
|
|
Current debt |
$ |
67 |
|
|
$ |
1,067 |
|
Accounts payable |
|
2,306 |
|
|
|
2,225 |
|
Other current liabilities |
|
2,309 |
|
|
|
3,033 |
|
Total Current Liabilities |
|
4,682 |
|
|
|
6,325 |
|
Long-Term Debt |
|
8,261 |
|
|
|
8,281 |
|
Deferred Income Taxes |
|
2,339 |
|
|
|
2,195 |
|
Other Liabilities |
|
1,474 |
|
|
|
1,654 |
|
|
|
|
|
Total Tyson Shareholders’
Equity |
|
19,355 |
|
|
|
17,723 |
|
Noncontrolling Interests |
|
134 |
|
|
|
131 |
|
Total Shareholders’
Equity |
|
19,489 |
|
|
|
17,854 |
|
|
|
|
|
Total Liabilities and
Shareholders’ Equity |
$ |
36,245 |
|
|
$ |
36,309 |
|
|
|
|
|
|
|
|
|
TYSON FOODS,
INC.CONSOLIDATED CONDENSED STATEMENTS OF CASH
FLOWS(In
millions)(Unaudited)
|
Nine Months Ended |
|
July 2, 2022 |
|
July 3, 2021 |
Cash Flows From Operating
Activities: |
|
|
|
Net income |
$ |
2,712 |
|
|
$ |
1,702 |
|
Depreciation and amortization |
|
892 |
|
|
|
906 |
|
Deferred income taxes |
|
149 |
|
|
|
(3 |
) |
Other, net |
|
62 |
|
|
|
72 |
|
Net changes in operating assets and liabilities |
|
(1,925 |
) |
|
|
(21 |
) |
Cash Provided by Operating
Activities |
|
1,890 |
|
|
|
2,656 |
|
|
|
|
|
Cash Flows From Investing
Activities: |
|
|
|
Additions to property, plant and equipment |
|
(1,323 |
) |
|
|
(859 |
) |
Purchases of marketable securities |
|
(29 |
) |
|
|
(57 |
) |
Proceeds from sale of marketable securities |
|
28 |
|
|
|
55 |
|
Acquisition of equity investments |
|
(97 |
) |
|
|
(44 |
) |
Other, net |
|
96 |
|
|
|
122 |
|
Cash Used for Investing
Activities |
|
(1,325 |
) |
|
|
(783 |
) |
|
|
|
|
Cash Flows From Financing
Activities: |
|
|
|
Proceeds from issuance of debt |
|
79 |
|
|
|
573 |
|
Payments on debt |
|
(1,148 |
) |
|
|
(1,608 |
) |
Purchases of Tyson Class A common stock |
|
(693 |
) |
|
|
(50 |
) |
Dividends |
|
(491 |
) |
|
|
(477 |
) |
Stock options exercised |
|
125 |
|
|
|
33 |
|
Other, net |
|
— |
|
|
|
(13 |
) |
Cash Used for Financing
Activities |
|
(2,128 |
) |
|
|
(1,542 |
) |
Effect of Exchange Rate
Changes on Cash |
|
(18 |
) |
|
|
11 |
|
(Decrease) Increase in Cash
and Cash Equivalents and Restricted Cash |
|
(1,581 |
) |
|
|
342 |
|
Cash and Cash Equivalents and
Restricted Cash at Beginning of Year |
|
2,637 |
|
|
|
1,466 |
|
Cash and Cash Equivalents and
Restricted Cash at End of Period |
|
1,056 |
|
|
|
1,808 |
|
Less: Restricted Cash at End
of Period |
|
— |
|
|
|
195 |
|
Cash and Cash Equivalents at
End of Period |
$ |
1,056 |
|
|
$ |
1,613 |
|
|
|
|
|
TYSON FOODS, INC.EBITDA
Reconciliations(In
millions)(Unaudited)
|
Nine Months Ended |
|
Fiscal Year Ended |
|
Twelve Months Ended |
|
July 2, 2022 |
|
July 3, 2021 |
|
October 2, 2021 |
|
July 2, 2022 |
|
|
|
|
|
|
|
|
Net income |
$ |
2,712 |
|
|
$ |
1,702 |
|
|
$ |
3,060 |
|
|
$ |
4,070 |
|
Less: Interest income |
|
(10 |
) |
|
|
(6 |
) |
|
|
(8 |
) |
|
|
(12 |
) |
Add: Interest expense |
|
282 |
|
|
|
325 |
|
|
|
428 |
|
|
|
385 |
|
Add: Income tax expense |
|
771 |
|
|
|
504 |
|
|
|
981 |
|
|
|
1,248 |
|
Add: Depreciation |
|
699 |
|
|
|
697 |
|
|
|
934 |
|
|
|
936 |
|
Add: Amortization 4 |
|
186 |
|
|
|
198 |
|
|
|
261 |
|
|
|
249 |
|
EBITDA |
$ |
4,640 |
|
|
$ |
3,420 |
|
|
$ |
5,656 |
|
|
$ |
6,876 |
|
|
|
|
|
|
|
|
|
Adjustments to EBITDA: |
|
|
|
|
|
|
|
Less: Gain on sale of
business |
$ |
— |
|
|
$ |
— |
|
|
$ |
(784 |
) |
|
$ |
(784 |
) |
Add: China plant relocation
charge 5 |
|
— |
|
|
|
23 |
|
|
|
27 |
|
|
|
4 |
|
Add: Legal contingency
accruals 6 |
|
— |
|
|
|
626 |
|
|
|
626 |
|
|
|
— |
|
(Less)/Add: Production
facilities fire insurance proceeds, net of costs7 |
|
(107 |
) |
|
|
(6 |
) |
|
|
17 |
|
|
|
(84 |
) |
Less: Defined benefit plan
gains |
|
— |
|
|
|
— |
|
|
|
(34 |
) |
|
|
(34 |
) |
Total Adjusted EBITDA |
$ |
4,533 |
|
|
$ |
4,063 |
|
|
$ |
5,508 |
|
|
$ |
5,978 |
|
|
|
|
|
|
|
|
|
Total gross debt |
|
|
|
|
$ |
9,348 |
|
|
$ |
8,328 |
|
Less: Cash and cash
equivalents |
|
|
|
|
|
(2,507 |
) |
|
|
(1,056 |
) |
Less: Short-term
investments |
|
|
|
|
|
— |
|
|
|
— |
|
Total net debt |
|
|
|
|
$ |
6,841 |
|
|
$ |
7,272 |
|
|
|
|
|
|
|
|
|
Ratio Calculations: |
|
|
|
|
|
|
|
Gross debt/EBITDA |
|
|
|
|
1.7x |
|
1.2x |
Net debt/EBITDA |
|
|
|
|
1.2x |
|
1.1x |
|
|
|
|
|
|
|
|
Gross debt/Adjusted
EBITDA |
|
|
|
|
1.7x |
|
1.4x |
Net debt/Adjusted EBITDA |
|
|
|
|
1.2x |
|
1.2x |
4 Excludes the amortization of debt issuance and debt discount
expense of $7 million for the nine months ended July 2, 2022,
$11 million for the nine months ended July 3, 2021, $19
million for the fiscal year ended October 2, 2021, and $15 million
for the twelve months ended July 2, 2022 as it is included in
interest expense.5 Relates to a plant relocation from a government
land expropriation and includes accelerated depreciation and team
member related charges recognized as an increase of Cost of Sales.6
Legal contingency accruals included $225 million recognized as a
reduction to sales and $81 million recognized as an increase of
Cost of Sales in the third quarter of fiscal 2021 and $545 million
recognized as a reduction of Sales and $81 million recognized as an
increase of Cost of Sales in the first nine months and full fiscal
year 2021, respectively.7 Relates to fires at production facilities
in Chicken in the fourth quarter of fiscal 2021 and Beef in the
fourth quarter of fiscal 2019. Amount includes insurance proceeds,
net of costs incurred, of $35 million recognized in Cost of Sales
and $32 million net proceeds recognized in Other, net for the three
months ended July 2, 2022, $53 million recognized in Cost of
Sales and $54 million net proceeds recognized in Other, net for the
nine months ended July 2, 2022 and $23 million net expense
recognized in Cost of Sales and $6 million net proceeds recognized
in Other, net for fiscal 2021.
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 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)
|
Third Quarter |
|
Nine Months Ended |
|
Pretax Impact |
|
EPS Impact |
|
Pretax Impact |
|
EPS Impact |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net income per share
attributable to Tyson (GAAP EPS) |
|
|
|
|
$ |
2.07 |
|
|
$ |
2.05 |
|
|
|
|
|
|
$ |
7.42 |
|
|
$ |
4.63 |
|
Add: China plant relocation5 |
$ |
— |
|
|
$ |
4 |
|
|
|
— |
|
|
|
0.01 |
|
|
$ |
— |
|
|
$ |
23 |
|
|
|
— |
|
|
|
0.05 |
|
Add: Legal contingency
accruals6 |
$ |
— |
|
|
$ |
306 |
|
|
|
— |
|
|
|
0.64 |
|
|
$ |
— |
|
|
$ |
626 |
|
|
|
— |
|
|
|
1.31 |
|
Less: Production facilities
fire insurance proceeds, net of costs7 |
$ |
(67 |
) |
|
$ |
— |
|
|
|
(0.13 |
) |
|
|
— |
|
|
$ |
(107 |
) |
|
$ |
(6 |
) |
|
|
(0.22 |
) |
|
|
(0.01 |
) |
Less: Remeasurement of net
deferred tax liabilities at lower enacted state tax rates |
$ |
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
(0.10 |
) |
|
|
— |
|
Adjusted net income per share
attributable to Tyson (Adjusted EPS) |
|
|
|
|
$ |
1.94 |
|
|
$ |
2.70 |
|
|
|
|
|
|
$ |
7.10 |
|
|
$ |
5.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
TYSON FOODS,
INC.Operating Income (Loss)
Reconciliation(In
millions)(Unaudited)
Adjusted Operating Income |
(for the third quarter ended July 2, 2022) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income |
$ |
533 |
|
$ |
25 |
|
$ |
277 |
|
$ |
186 |
|
$ |
12 |
|
$ |
1,033 |
|
Less: Production facilities
fire insurance proceeds, net of costs7 |
|
(27 |
) |
|
— |
|
|
(8 |
) |
|
— |
|
|
— |
|
|
(35 |
) |
Adjusted operating income |
$ |
506 |
|
$ |
25 |
|
$ |
269 |
|
$ |
186 |
|
$ |
12 |
|
$ |
998 |
|
Adjusted Operating Income |
(for the third quarter ended July 3, 2021) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income (loss) |
$ |
1,120 |
|
$ |
67 |
|
$ |
(279 |
) |
$ |
150 |
|
$ |
4 |
|
$ |
1,062 |
|
Add: Legal contingency
accruals6 |
|
— |
|
|
— |
|
|
306 |
|
|
— |
|
|
— |
|
|
306 |
|
Add: China plant relocation
charge5 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4 |
|
|
4 |
|
Adjusted operating income |
$ |
1,120 |
|
$ |
67 |
|
$ |
27 |
|
$ |
150 |
|
$ |
8 |
|
$ |
1,372 |
|
Adjusted Operating Income |
(for the nine months ended July 2, 2022) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income |
$ |
2,127 |
|
$ |
248 |
|
$ |
615 |
|
$ |
635 |
|
$ |
19 |
|
$ |
3,644 |
|
Less: Production facilities
fire insurance proceeds, net of costs7 |
|
(27 |
) |
|
— |
|
|
(26 |
) |
|
— |
|
|
— |
|
|
(53 |
) |
Adjusted operating income |
$ |
2,100 |
|
$ |
248 |
|
$ |
589 |
|
$ |
635 |
|
$ |
19 |
|
$ |
3,591 |
|
Adjusted Operating Income |
(for the nine months ended July 3, 2021) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income (loss) |
$ |
2,093 |
|
$ |
250 |
|
$ |
(489 |
) |
$ |
633 |
|
$ |
— |
|
$ |
2,487 |
|
Add: Legal contingency
accruals6 |
|
— |
|
|
— |
|
|
626 |
|
|
— |
|
|
— |
|
|
626 |
|
Add: China plant relocation
charge5 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
23 |
|
|
23 |
|
Adjusted operating income |
$ |
2,093 |
|
$ |
250 |
|
$ |
137 |
|
$ |
633 |
|
$ |
23 |
|
$ |
3,136 |
|
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 (loss) 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.
About Tyson Foods, Inc.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
four 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
approximately 137,000 team members on October 2, 2021. 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 www.tysonfoods.com.
Conference Call Information and Other Selected
DataA conference call to discuss the Company's financial
results will be held at 9 a.m. Eastern Monday, August 8, 2022. A
link for the webcast of the conference call is available on the
Tyson Investor Relations website at http://ir.tyson.com. The
webcast also can be accessed by the following direct link:
https://events.q4inc.com/attendee/843091435. For those who cannot
participate at the scheduled time, a replay of the live webcast and
the accompanying slides will be available at http://ir.tyson.com. A
telephone replay will also be available until Wednesday, September
7, 2022, 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 2596137. 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.
Forward-Looking StatementsCertain information
in this report constitutes forward-looking statements as
contemplated by the Private Securities Litigation Reform Act of
1995. Such forward-looking statements include, but are not limited
to, current views and estimates of our outlook for fiscal 2022,
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 are
expressly qualified in their entirety by this cautionary statement
and 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) the COVID-19 global pandemic and
associated responses thereto have had an adverse impact on our
business and operations, and the extent that the COVID-19 pandemic
continues to impact us will depend on future developments, which
are highly uncertain and cannot be predicted with confidence,
including the scope, severity and duration of the pandemic, public
adoption rates of COVID-19 vaccines and their effectiveness against
emerging variants of COVID-19, the speed and effectiveness of new
vaccine and treatment developments and their deployment and
COVID-19 related impacts on the market, including production
delays, labor shortages and increases in costs and inflation; (ii)
the effectiveness of our financial excellence programs; (iii)
access to foreign markets together with foreign economic
conditions, including currency fluctuations, import/export
restrictions and foreign politics; (iv) cyber incidents, security
breaches or other disruptions of our information technology
systems; (v) risks associated with our failure to consummate
favorable acquisition transactions or integrate certain
acquisitions' operations; (vi) the Tyson Limited Partnership’s
ability to exercise significant control over the Company; (vii)
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; (viii) 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; (ix)
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; (x) changes in consumer preference and diets
and our ability to identify and react to consumer trends; (xi)
effectiveness of advertising and marketing programs; (xii)
significant marketing plan changes by large customers or loss of
one or more large customers; (xiii) our ability to leverage brand
value propositions; (xiv) changes in availability and relative
costs of labor and contract farmers and our ability to maintain
good relationships with team members, labor unions, contract
farmers and independent producers providing us livestock; (xv)
issues related to food safety, including costs resulting from
product recalls, regulatory compliance and any related claims or
litigation; (xvi) 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; (xvii) adverse results from
litigation; (xviii) risks associated with leverage, including cost
increases due to rising interest rates or changes in debt ratings
or outlook; (xix) impairment in the carrying value of our goodwill
or indefinite life intangible assets; (xx) our participation in a
multiemployer pension plan; (xxi) volatility in capital markets or
interest rates; (xxii) risks associated with our commodity
purchasing activities; (xxiii) the effect of, or changes in,
general economic conditions; (xxiv) impacts on our operations
caused by factors and forces beyond our control, such as natural
disasters, fire, bioterrorism, pandemics, armed conflicts or
extreme weather; (xxv) failure to maximize or assert our
intellectual property rights; (xxvi) effects related to changes in
tax rates, valuation of deferred tax assets and liabilities, or tax
laws and their interpretation; (xxvii) the effectiveness of our
internal control over financial reporting, including identification
of material weaknesses; and (xxviii) the other risks and
uncertainties detailed from time to time in our filings with the
Securities and Exchange Commission, including those included under
the captions "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our
most recent Annual Report on Form 10-K and Quarterly reports on
Form 10-Q.
Media Contact: Derek Burleson, 479-290-6466Investor Contact:
Brandon Tucker, 479-290-3927 |
Source: Tyson Foods, Inc.Category: IR, Newsroom |
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