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) |
Fourth Quarter |
|
Twelve Months Ended |
|
|
|
2022 |
|
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Sales |
$ |
13,737 |
|
|
$ |
12,811 |
|
$ |
53,282 |
|
$ |
47,049 |
|
Operating Income |
|
766 |
|
|
|
1,909 |
|
|
4,410 |
|
|
4,396 |
|
|
|
|
|
|
|
|
|
|
Net Income |
|
537 |
|
|
|
1,358 |
|
|
3,249 |
|
|
3,060 |
|
Less: Net Income (Loss)
Attributable to Noncontrolling Interests |
|
(1 |
) |
|
|
3 |
|
|
11 |
|
|
13 |
|
Net Income Attributable to
Tyson |
$ |
538 |
|
|
$ |
1,355 |
|
$ |
3,238 |
|
$ |
3,047 |
|
|
|
|
|
|
|
|
|
|
Net Income Per Share
Attributable to Tyson |
$ |
1.50 |
|
|
$ |
3.71 |
|
$ |
8.92 |
|
$ |
8.34 |
|
|
|
|
|
|
|
|
|
|
Adjusted1 Operating
Income |
$ |
823 |
|
|
$ |
1,152 |
|
$ |
4,414 |
|
$ |
4,288 |
|
|
|
|
|
|
|
|
|
|
Adjusted1 Net Income Per Share
Attributable to Tyson |
$ |
1.63 |
|
|
$ |
2.30 |
|
$ |
8.73 |
|
$ |
8.28 |
|
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.
Fiscal 2022 Highlights
- GAAP EPS of $8.92, up 7% from prior year; Adjusted EPS
of $8.73, up 5% from prior year
- GAAP operating income of $4,410 million, up slightly
from prior year; Adjusted operating income of $4,414 million, up 3%
from prior year
- Total Company GAAP operating margin and adjusted
operating margin of 8.3%
- Repurchased 8.2 million shares for $702
million
- Reduced total debt by approximately $1
billion
Fourth Quarter Highlights
- GAAP EPS of $1.50, down 60% from prior year; Adjusted
EPS of $1.63, down 29% from prior year
- GAAP operating income of $766 million, down 60% from
prior year; Adjusted operating income of $823 million, down 29%
from prior year
- Total Company GAAP operating margin of 5.6%; Adjusted
operating margin of 6.0%
- Liquidity of $3.3 billion at October 1,
2022
“We delivered record sales and earnings for the full year, which
was supported by our diverse portfolio and continued strength in
consumer demand for protein,” said Donnie King, president and CEO
of Tyson Foods. "Our results were supported by historically strong
operations in our Beef segment and improved performance in our
Chicken segment. We also experienced share gains in both our
foodservice Focus 6 categories and retail core business lines,
which include our Tyson, Jimmy Dean, Hillshire Farm and Ball Park
iconic brands.”
“Our productivity program, announced one year ago and designed
to deliver more than $1 billion in recurring annual savings by the
end of 2024, has accelerated ahead of schedule and is now expected
to be achieved by the end of FY23. The focus of this plan includes
operational and functional excellence, digital solutions, and
automation and advanced technologies.”
SEGMENT RESULTS (in millions)
Sales |
(for the fourth quarter and twelve months ended October 1, 2022,
and October 2, 2021) |
|
Fourth Quarter |
Twelve Months Ended |
|
|
|
Volume |
Avg. Price |
|
|
Volume |
Avg. Price |
|
|
2022 |
|
|
2021 |
|
Change |
Change |
|
2022 |
|
|
2021 |
|
Change |
Change 2 |
Beef |
$ |
4,859 |
|
$ |
5,012 |
|
5.1 |
% |
(8.2) |
% |
$ |
19,854 |
|
$ |
17,999 |
|
0.1 |
% |
10.2 |
% |
Pork |
|
1,604 |
|
|
1,646 |
|
(1.1) |
% |
(1.5) |
% |
|
6,414 |
|
|
6,277 |
|
(1.9) |
% |
4.1 |
% |
Chicken |
|
4,619 |
|
|
3,873 |
|
1.1 |
% |
18.2 |
% |
|
16,961 |
|
|
13,733 |
|
0.7 |
% |
18.1 |
% |
Prepared Foods |
|
2,516 |
|
|
2,253 |
|
0.3 |
% |
11.4 |
% |
|
9,689 |
|
|
8,853 |
|
(4.1) |
% |
13.5 |
% |
International/Other |
|
638 |
|
|
546 |
|
7.3 |
% |
9.5 |
% |
|
2,355 |
|
|
1,990 |
|
10.5 |
% |
7.8 |
% |
Intersegment Sales |
|
(499 |
) |
|
(519 |
) |
n/a |
n/a |
|
(1,991 |
) |
|
(1,803 |
) |
n/a |
n/a |
Total |
$ |
13,737 |
|
$ |
12,811 |
|
2.1 |
% |
5.1 |
% |
$ |
53,282 |
|
$ |
47,049 |
|
(0.3) |
% |
12.3 |
% |
Operating Income (Loss) |
|
(for the fourth quarter and twelve months ended October 1, 2022,
and October 2, 2021) |
|
|
Fourth Quarter |
Twelve Months Ended |
|
|
|
|
Operating Margin |
|
|
|
Operating Margin |
|
|
2022 |
|
|
2021 |
|
2022 |
|
2021 |
|
|
2022 |
|
|
2021 |
|
2022 |
|
2021 |
|
Beef |
$ |
375 |
|
$ |
1,147 |
|
7.7 |
% |
22.9 |
% |
$ |
2,502 |
|
$ |
3,240 |
|
12.6 |
% |
18.0 |
% |
Pork |
|
(55 |
) |
|
78 |
|
(3.4) |
% |
4.7 |
% |
|
193 |
|
|
328 |
|
3.0 |
% |
5.2 |
% |
Chicken |
|
340 |
|
|
(136 |
) |
7.4 |
% |
(3.5) |
% |
|
955 |
|
|
(625 |
) |
5.6 |
% |
(4.6) |
% |
Prepared Foods |
|
111 |
|
|
823 |
|
4.4 |
% |
36.5 |
% |
|
746 |
|
|
1,456 |
|
7.7 |
% |
16.4 |
% |
International/Other |
|
(5 |
) |
|
(3 |
) |
n/a |
n/a |
|
14 |
|
|
(3 |
) |
n/a |
n/a |
Total |
$ |
766 |
|
$ |
1,909 |
|
5.6 |
% |
14.9 |
% |
$ |
4,410 |
|
$ |
4,396 |
|
8.3 |
% |
9.3 |
% |
ADJUSTED SEGMENT RESULTS (in
millions)
Adjusted Operating Income (Loss) (Non-GAAP) |
(for the fourth quarter and twelve months ended October 1, 2022,
and October 2, 2021) |
|
Fourth Quarter |
Twelve Months Ended |
|
|
|
Adjusted Operating Margin (Non-GAAP) |
|
|
Adjusted Operating Margin (Non-GAAP) |
|
|
2022 |
|
|
2021 |
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
2022 |
|
2021 2 |
|
Beef |
$ |
391 |
|
$ |
1,147 |
|
8.0 |
% |
22.9 |
% |
$ |
2,491 |
$ |
3,240 |
12.5 |
% |
18.0 |
% |
Pork |
|
(50 |
) |
|
78 |
|
(3.1) |
% |
4.7 |
% |
|
198 |
|
328 |
3.1 |
% |
5.2 |
% |
Chicken |
|
337 |
|
|
(113 |
) |
7.3 |
% |
(2.9) |
% |
|
926 |
|
24 |
5.5 |
% |
0.2 |
% |
Prepared Foods |
|
147 |
|
|
39 |
|
5.8 |
% |
1.7 |
% |
|
782 |
|
672 |
8.1 |
% |
7.6 |
% |
International/Other |
|
(2 |
) |
|
1 |
|
n/a |
n/a |
|
17 |
|
24 |
n/a |
n/a |
Total |
$ |
823 |
|
$ |
1,152 |
|
6.0 |
% |
9.0 |
% |
$ |
4,414 |
$ |
4,288 |
8.3 |
% |
9.0 |
% |
2 Average Price Change and Adjusted Operating Margin for the
Chicken Segment and Total Company exclude the impact of $545
million of legal contingency accruals recognized as a reduction of
Sales for the twelve months ended October 2, 2021.
SUMMARY OF SEGMENT RESULTS
BeefSales Volume - Sales
volume was relatively flat in fiscal 2022. Sales volume increased
in the fourth quarter of fiscal 2022 driven by improved operational
performance. Average Sales Price - Average sales
price increased in fiscal 2022 as input costs such as live cattle,
labor, freight and transportation costs increased and demand for
our beef products remained strong in the first half of the fiscal
year. Average sales price decreased in the fourth quarter of fiscal
2022 driven by reduced demand for premium cuts of beef as compared
to exceptionally high demand in the fourth quarter of fiscal 2021.
Operating Income - Operating income decreased as
margins compressed from historically high levels, paired with
continued increased operating costs as a result of the inflationary
market environment. Operating income benefited from a $71 million
gain due to a settlement in fiscal 2022, compared to a $55 million
gain from the recovery of cattle inventory in fiscal 2021, related
to a cattle supplier's misappropriation of Company funds.
Additionally, operating income in fiscal 2022 benefited from $27
million of insurance proceeds related to a fire at a production
facility in the fourth quarter of fiscal 2019, partially offset by
$16 million in restructuring and related charges.
PorkSales Volume - Sales
volume decreased due to reduced domestic availability of live hogs.
Average Sales Price - Average sales price
increased in fiscal 2022 as input costs such as live hogs, labor,
freight and transportation costs increased, partially offset by
unfavorable mix associated with labor shortages. Average sales
price decreased in the fourth quarter of fiscal 2022 due to
unfavorable product mix associated with export demand and elevated
domestic availability of finished products. Operating
Income - Operating income decreased due to periods of
compressed pork margins and increased operating costs as a result
of the inflationary market environment. Additionally, volatile
market conditions resulted in net derivative gains of $10 million
in fiscal 2022 and net derivative losses of $90 million in fiscal
2021, which excludes the impacts of related physical purchase
transactions.
ChickenSales Volume - Sales
volume increased primarily due to improved domestic production
partially offset by inventory growth and strategic initiative mix
impacts. Average Sales Price - Average sales price
increased primarily due to the effects of pricing initiatives in an
inflationary cost environment. Operating Income -
Operating income increased in fiscal 2022 primarily due to higher
average sales prices and increased sales volume, partially offset
by the impacts of inflationary market conditions including
increased supply chain and labor costs. Operating income in the
fourth quarter of fiscal 2022 was impacted by $165 million of
higher feed ingredient costs, offset by $65 million of net
derivative gains as compared to $75 million of net derivative
losses in the fourth quarter of fiscal 2021. Operating income in
fiscal 2022 was impacted by $595 million of higher feed ingredient
costs, offset by $195 million of net derivative gains as compared
to $65 million of net derivative gains in fiscal 2021.
Additionally, operating income in fiscal 2022 benefited from $35
million of insurance proceeds, net of costs incurred related to a
fire at a production facility. Operating income in fiscal 2021 was
impacted by $626 million of losses from the recognition of legal
contingency accruals and $23 million of expenses related to a fire
at a production facility.
Prepared FoodsSales Volume -
Sales volume decreased in fiscal 2022 due to the impacts of uneven
foodservice recovery, the divestiture of our pet treats business in
the fourth quarter of fiscal 2021, increased pricing and a
challenging supply environment impacting the first half of fiscal
2022. Sales volume was relatively flat in the fourth quarter of
fiscal 2022.Average Sales Price - Average sales
price increased due to the effects of revenue management in an
inflationary cost environment. Operating Income -
Operating income decreased in fiscal 2022 due to the recognition of
a $784 million gain on the sale of our pet treats business in the
fourth quarter of fiscal 2021. Higher average sales prices were
offset by the impacts of inflationary market conditions, including
$55 million and $615 million of increased raw materials and other
input costs in the fourth quarter of fiscal 2022 and fiscal 2022,
respectively, in addition to increased supply chain and labor
costs. Additionally, operating income in fiscal 2022 was impacted
by $36 million of restructuring and related charges.
OUTLOOKFor fiscal 2023, the United States
Department of Agriculture (USDA) indicates domestic protein
production (beef, pork, chicken and turkey) should decrease
approximately 1% compared to fiscal 2022 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, tax rate and dividends for fiscal 2023.3
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 were targeting $1
billion in productivity savings by the end of fiscal 2024,
including more than $400 million in fiscal 2022, relative to a
fiscal 2021 cost baseline. We realized more than $700 million of
productivity savings in fiscal 2022, which partially offset the
impacts of inflationary market conditions, and we now believe we
will exceed our $1 billion target in fiscal 2023.
BeefUSDA projects domestic production will
decrease approximately 6% in fiscal 2023 as compared to fiscal
2022. We anticipate an adjusted operating margin at or below the
low end of our long-term range of 5% to 7% in fiscal 2023 as
margins are expected to decrease from historically high levels.
PorkUSDA projects domestic production will be
relatively flat in fiscal 2023 as compared to fiscal 2022. We
anticipate adjusted operating margin of 2% to 4% in fiscal
2023.
ChickenUSDA projects chicken production will
increase approximately 2% in fiscal 2023 as compared to fiscal
2022. We anticipate an adjusted operating margin of 6% to 8% for
fiscal 2023.
Prepared FoodsWe anticipate an adjusted
operating margin of 8% to 10% in fiscal 2023 driven by volume
growth, productivity and disciplined revenue management.
International/OtherWe anticipate improved
results from our foreign operations in fiscal 2023.
RevenueWe expect sales to be $55 billion to $57
billion in fiscal 2023.
Capital ExpendituresWe expect capital
expenditures of approximately $2.5 billion for fiscal 2023. 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 $320 million for fiscal 2023.
LiquidityWe expect total liquidity, which was
approximately $3.3 billion at October 1, 2022, to remain above
our minimum liquidity target of $1.0 billion.
Tax RateWe currently expect
our adjusted effective tax rate to be around 23% in fiscal
2023.
DividendsEffective November 11, 2022, the Board
of Directors increased the quarterly dividend previously declared
on August 11, 2022, to $0.48 per share on our Class A common stock
and $0.432 per share on our Class B common stock. The increased
quarterly dividend is payable on December 15, 2022, to shareholders
of record at the close of business on December 1, 2022. The Board
also declared on November 11, 2022 a quarterly dividend of $0.48
per share on our Class A common stock and $0.432 per share on our
Class B common stock, payable on March 15, 2023, to shareholders of
record at the close of business on March 1, 2023. We anticipate the
remaining quarterly dividends in fiscal 2023 will be $0.48 and
$0.432 per share of our Class A and Class B common stock,
respectively. This results in an annual dividend rate in fiscal
2023 of $1.92 for Class A shares and $1.728 for Class B shares, or
a 4% increase compared to the fiscal 2022 annual dividend rate.
3 The Company is not able to reconcile its full-year fiscal 2023
projected adjusted results to its fiscal 2023 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, 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 |
|
Twelve Months Ended |
|
October 1, 2022 |
|
October 2, 2021 |
|
October 1, 2022 |
|
October 2, 2021 |
Sales |
$ |
13,737 |
|
|
$ |
12,811 |
|
|
$ |
53,282 |
|
|
$ |
47,049 |
|
Cost of Sales |
|
12,430 |
|
|
|
10,335 |
|
|
|
46,614 |
|
|
|
40,523 |
|
Gross Profit |
|
1,307 |
|
|
|
2,476 |
|
|
|
6,668 |
|
|
|
6,526 |
|
|
|
|
|
|
|
|
|
Selling, General and
Administrative |
|
541 |
|
|
|
567 |
|
|
|
2,258 |
|
|
|
2,130 |
|
Operating Income |
|
766 |
|
|
|
1,909 |
|
|
|
4,410 |
|
|
|
4,396 |
|
Other (Income) Expense: |
|
|
|
|
|
|
|
Interest income |
|
(7 |
) |
|
|
(2 |
) |
|
|
(17 |
) |
|
|
(8 |
) |
Interest expense |
|
83 |
|
|
|
103 |
|
|
|
365 |
|
|
|
428 |
|
Other, net |
|
24 |
|
|
|
(27 |
) |
|
|
(87 |
) |
|
|
(65 |
) |
Total Other (Income)
Expense |
|
100 |
|
|
|
74 |
|
|
|
261 |
|
|
|
355 |
|
Income before Income
Taxes |
|
666 |
|
|
|
1,835 |
|
|
|
4,149 |
|
|
|
4,041 |
|
Income Tax Expense |
|
129 |
|
|
|
477 |
|
|
|
900 |
|
|
|
981 |
|
Net Income |
|
537 |
|
|
|
1,358 |
|
|
|
3,249 |
|
|
|
3,060 |
|
Less: Net Income (Loss)
Attributable to Noncontrolling Interests |
|
(1 |
) |
|
|
3 |
|
|
|
11 |
|
|
|
13 |
|
Net Income Attributable to
Tyson |
$ |
538 |
|
|
$ |
1,355 |
|
|
$ |
3,238 |
|
|
$ |
3,047 |
|
Weighted Average Shares
Outstanding: |
|
|
|
|
|
|
|
Class A Basic |
|
288 |
|
|
|
293 |
|
|
|
290 |
|
|
|
293 |
|
Class B Basic |
|
70 |
|
|
|
70 |
|
|
|
70 |
|
|
|
70 |
|
Diluted |
|
361 |
|
|
|
366 |
|
|
|
363 |
|
|
|
365 |
|
Net Income Per Share
Attributable to Tyson: |
|
|
|
|
|
|
|
Class A Basic |
$ |
1.54 |
|
|
$ |
3.81 |
|
|
$ |
9.18 |
|
|
$ |
8.57 |
|
Class B Basic |
$ |
1.38 |
|
|
$ |
3.43 |
|
|
$ |
8.25 |
|
|
$ |
7.70 |
|
Diluted |
$ |
1.50 |
|
|
$ |
3.71 |
|
|
$ |
8.92 |
|
|
$ |
8.34 |
|
Dividends Declared Per
Share: |
|
|
|
|
|
|
|
Class A |
$ |
0.460 |
|
|
$ |
0.445 |
|
|
$ |
1.855 |
|
|
$ |
1.805 |
|
Class B |
$ |
0.414 |
|
|
$ |
0.401 |
|
|
$ |
1.670 |
|
|
$ |
1.625 |
|
|
|
|
|
|
|
|
|
Sales Growth |
|
7.2 |
% |
|
|
|
|
13.2 |
% |
|
|
Margins: (Percent of
Sales) |
|
|
|
|
|
|
|
Gross Profit |
|
9.5 |
% |
|
|
19.3 |
% |
|
|
12.5 |
% |
|
|
13.9 |
% |
Operating Income |
|
5.6 |
% |
|
|
14.9 |
% |
|
|
8.3 |
% |
|
|
9.3 |
% |
Net Income Attributable to Tyson |
|
3.9 |
% |
|
|
10.6 |
% |
|
|
6.1 |
% |
|
|
6.5 |
% |
Effective Tax Rate |
|
19.4 |
% |
|
|
25.9 |
% |
|
|
21.7 |
% |
|
|
24.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TYSON FOODS,
INC.CONSOLIDATED CONDENSED BALANCE
SHEETS(In
millions)(Unaudited)
|
October 1, 2022 |
|
|
October 2, 2021 |
|
Assets |
|
|
|
|
|
Current Assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
1,031 |
|
|
$ |
2,507 |
|
Accounts receivable, net |
|
2,577 |
|
|
|
2,400 |
|
Inventories |
|
5,514 |
|
|
|
4,382 |
|
Other current assets |
|
508 |
|
|
|
533 |
|
Total Current Assets |
|
9,630 |
|
|
|
9,822 |
|
Net Property, Plant and
Equipment |
|
8,685 |
|
|
|
7,837 |
|
Goodwill |
|
10,513 |
|
|
|
10,549 |
|
Intangible Assets, net |
|
6,252 |
|
|
|
6,519 |
|
Other Assets |
|
1,741 |
|
|
|
1,582 |
|
Total Assets |
$ |
36,821 |
|
|
$ |
36,309 |
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
Current debt |
$ |
459 |
|
|
$ |
1,067 |
|
Accounts payable |
|
2,483 |
|
|
|
2,225 |
|
Other current liabilities |
|
2,371 |
|
|
|
3,033 |
|
Total Current Liabilities |
|
5,313 |
|
|
|
6,325 |
|
Long-Term Debt |
|
7,862 |
|
|
|
8,281 |
|
Deferred Income Taxes |
|
2,458 |
|
|
|
2,195 |
|
Other Liabilities |
|
1,377 |
|
|
|
1,654 |
|
|
|
|
|
|
|
Total Tyson Shareholders’
Equity |
|
19,702 |
|
|
|
17,723 |
|
Noncontrolling Interests |
|
109 |
|
|
|
131 |
|
Total Shareholders’
Equity |
|
19,811 |
|
|
|
17,854 |
|
|
|
|
|
|
|
Total Liabilities and
Shareholders’ Equity |
$ |
36,821 |
|
|
$ |
36,309 |
|
|
|
|
|
|
|
|
|
TYSON FOODS,
INC.CONSOLIDATED CONDENSED STATEMENTS OF CASH
FLOWS(In
millions)(Unaudited)
|
Twelve Months Ended |
|
October 1, 2022 |
|
October 2, 2021 |
Cash Flows From Operating
Activities: |
|
|
|
Net income |
$ |
3,249 |
|
|
$ |
3,060 |
|
Depreciation and amortization |
|
1,202 |
|
|
|
1,214 |
|
Deferred income taxes |
|
264 |
|
|
|
(125 |
) |
Gain on disposition of business |
|
— |
|
|
|
(784 |
) |
Other, net |
|
76 |
|
|
|
94 |
|
Net changes in operating assets and liabilities |
|
(2,104 |
) |
|
|
381 |
|
Cash Provided by Operating
Activities |
|
2,687 |
|
|
|
3,840 |
|
|
|
|
|
Cash Flows From Investing
Activities: |
|
|
|
Additions to property, plant and equipment |
|
(1,887 |
) |
|
|
(1,209 |
) |
Purchases of marketable securities |
|
(35 |
) |
|
|
(72 |
) |
Proceeds from sale of marketable securities |
|
34 |
|
|
|
70 |
|
Proceeds from sale of business |
|
— |
|
|
|
1,188 |
|
Acquisition of equity investments |
|
(177 |
) |
|
|
(44 |
) |
Other, net |
|
130 |
|
|
|
125 |
|
Cash (Used for) Provided by
Investing Activities |
|
(1,935 |
) |
|
|
58 |
|
|
|
|
|
Cash Flows From Financing
Activities: |
|
|
|
Proceeds from issuance of debt |
|
103 |
|
|
|
585 |
|
Payments on debt |
|
(1,191 |
) |
|
|
(2,632 |
) |
Purchases of Tyson Class A common stock |
|
(702 |
) |
|
|
(67 |
) |
Dividends |
|
(653 |
) |
|
|
(636 |
) |
Stock options exercised |
|
126 |
|
|
|
41 |
|
Other, net |
|
(6 |
) |
|
|
(22 |
) |
Cash Used for Financing
Activities |
|
(2,323 |
) |
|
|
(2,731 |
) |
Effect of Exchange Rate
Changes on Cash |
|
(35 |
) |
|
|
4 |
|
(Decrease) Increase in Cash
and Cash Equivalents and Restricted Cash |
|
(1,606 |
) |
|
|
1,171 |
|
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 |
|
1,031 |
|
|
|
2,637 |
|
Less: Restricted Cash at End
of Period |
|
— |
|
|
|
130 |
|
Cash and Cash Equivalents at
End of Period |
$ |
1,031 |
|
|
$ |
2,507 |
|
|
|
|
|
TYSON FOODS, INC.EBITDA
Reconciliations(In
millions)(Unaudited)
|
Twelve Months Ended |
|
October 1, 2022 |
|
October 2, 2021 |
|
|
|
|
Net income |
$ |
3,249 |
|
|
$ |
3,060 |
|
Less: Interest income |
|
(17 |
) |
|
|
(8 |
) |
Add: Interest expense |
|
365 |
|
|
|
428 |
|
Add: Income tax expense |
|
900 |
|
|
|
981 |
|
Add: Depreciation |
|
945 |
|
|
|
934 |
|
Add: Amortization 4 |
|
246 |
|
|
|
261 |
|
EBITDA |
$ |
5,688 |
|
|
$ |
5,656 |
|
Adjustments to EBITDA: |
|
|
|
(Less)/Add: Production
facilities fire insurance proceeds, net of costs 7 |
$ |
(114 |
) |
|
$ |
17 |
|
Add: Restructuring and related
charges |
|
66 |
|
|
|
— |
|
Less: Gain on sale of
business |
|
— |
|
|
|
(784 |
) |
Add: China plant relocation
charge 5 |
|
— |
|
|
|
27 |
|
Add: Legal contingency
accruals 6 |
|
— |
|
|
|
626 |
|
Less: Defined benefit plan
gains |
|
— |
|
|
|
(34 |
) |
Total Adjusted EBITDA |
$ |
5,640 |
|
|
$ |
5,508 |
|
Total gross debt |
$ |
8,321 |
|
|
$ |
9,348 |
|
Less: Cash and cash
equivalents |
|
(1,031 |
) |
|
|
(2,507 |
) |
Less: Short-term
investments |
|
(1 |
) |
|
|
— |
|
Total net debt |
$ |
7,289 |
|
|
$ |
6,841 |
|
Ratio Calculations: |
|
|
|
Gross debt/EBITDA |
1.5x |
|
1.7x |
Net debt/EBITDA |
1.3x |
|
1.2x |
Gross debt/Adjusted
EBITDA |
1.5x |
|
1.7x |
Net debt/Adjusted EBITDA |
1.3x |
|
1.2x |
4 Excludes the amortization of debt issuance and debt discount
expense of $11 million and $19 million for the twelve months ended
October 1, 2022 and October 2, 2021, respectively, 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 $545 million recognized as
a reduction to sales and $81 million recognized as an increase of
Cost of Sales.
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 $62 million recognized in Cost of Sales and $52
million net proceeds recognized in Other, net for fiscal 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)
|
Fourth Quarter |
|
Twelve 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) |
|
|
|
|
$ |
1.50 |
|
|
$ |
3.71 |
|
|
|
|
|
|
$ |
8.92 |
|
|
$ |
8.34 |
|
Add: China plant relocation
charge 5 |
$ |
— |
|
|
$ |
4 |
|
|
|
— |
|
|
|
0.01 |
|
|
$ |
— |
|
|
$ |
27 |
|
|
|
— |
|
|
|
0.06 |
|
Add: Legal contingency
accruals 6 |
$ |
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
626 |
|
|
|
— |
|
|
|
1.31 |
|
Less: Defined benefit plan
gains |
$ |
— |
|
|
$ |
(34 |
) |
|
|
— |
|
|
|
(0.07 |
) |
|
$ |
— |
|
|
$ |
(34 |
) |
|
|
— |
|
|
|
(0.07 |
) |
Less: Gain on sale of
business |
$ |
— |
|
|
$ |
(784 |
) |
|
|
— |
|
|
|
(1.40 |
) |
|
$ |
— |
|
|
$ |
(784 |
) |
|
|
— |
|
|
|
(1.40 |
) |
(Less)/Add: Production
facilities fire insurance proceeds, net of costs 7 |
$ |
(7 |
) |
|
$ |
23 |
|
|
|
(0.01 |
) |
|
|
0.05 |
|
|
$ |
(114 |
) |
|
$ |
17 |
|
|
|
(0.23 |
) |
|
|
0.04 |
|
Add: Restructuring and related
charges |
$ |
66 |
|
|
$ |
— |
|
|
|
0.14 |
|
|
|
— |
|
|
$ |
66 |
|
|
$ |
— |
|
|
|
0.14 |
|
|
|
— |
|
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) |
|
|
|
|
$ |
1.63 |
|
|
$ |
2.30 |
|
|
|
|
|
|
$ |
8.73 |
|
|
$ |
8.28 |
|
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 (Loss) |
(for the fourth quarter ended October 1, 2022) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income (loss) |
$ |
375 |
$ |
(55 |
) |
$ |
340 |
|
$ |
111 |
$ |
(5 |
) |
$ |
766 |
|
Less: Production facilities fire insurance proceeds, net of costs
7 |
|
— |
|
— |
|
|
(9 |
) |
|
— |
|
— |
|
|
(9 |
) |
Add: Restructuring and related charges |
|
16 |
|
5 |
|
|
6 |
|
|
36 |
|
3 |
|
|
66 |
|
Adjusted operating income (loss) |
$ |
391 |
$ |
(50 |
) |
$ |
337 |
|
$ |
147 |
$ |
(2 |
) |
$ |
823 |
|
Adjusted Operating Income (Loss) |
(for the fourth quarter ended October 2, 2021) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income (loss) |
$ |
1,147 |
$ |
78 |
$ |
(136 |
) |
$ |
823 |
|
$ |
(3 |
) |
$ |
1,909 |
|
Less: Gain on sale of business |
|
— |
|
— |
|
— |
|
|
(784 |
) |
|
— |
|
|
(784 |
) |
Add: Production facilities fire costs, net of insurance
proceeds7 |
|
— |
|
— |
|
23 |
|
|
— |
|
|
— |
|
|
23 |
|
Add: China plant relocation charge 5 |
|
— |
|
— |
|
— |
|
|
— |
|
|
4 |
|
|
4 |
|
Adjusted operating income (loss) |
$ |
1,147 |
$ |
78 |
$ |
(113 |
) |
$ |
39 |
|
$ |
1 |
|
$ |
1,152 |
|
Adjusted Operating Income |
|
(for the twelve months ended October 1, 2022) |
|
|
Beef |
Pork |
Chicken |
Prepared Foods |
|
International/Other |
Total |
Reported operating income |
$ |
2,502 |
|
$ |
193 |
$ |
955 |
|
$ |
746 |
|
$ |
14 |
$ |
4,410 |
|
Less: Production facilities fire insurance proceeds, net of costs
7 |
|
(27 |
) |
|
— |
|
(35 |
) |
|
— |
|
|
— |
|
(62 |
) |
Add: Restructuring and related charges |
|
16 |
|
|
5 |
|
6 |
|
|
36 |
|
|
3 |
|
66 |
|
Adjusted operating income |
$ |
2,491 |
|
$ |
198 |
$ |
926 |
|
$ |
782 |
|
$ |
17 |
$ |
4,414 |
|
Adjusted Operating Income (Loss) |
(for the twelve months ended October 2, 2021) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income (loss) |
$ |
3,240 |
$ |
328 |
$ |
(625 |
) |
$ |
1,456 |
|
$ |
(3 |
) |
$ |
4,396 |
|
Less: Gain on sale of business |
|
— |
|
— |
|
— |
|
|
(784 |
) |
|
— |
|
|
(784 |
) |
Add: Production facilities fire costs, net of insurance
proceeds7 |
|
— |
|
— |
|
23 |
|
|
— |
|
|
— |
|
|
23 |
|
Add: Legal contingency accruals 6 |
|
— |
|
— |
|
626 |
|
|
— |
|
|
— |
|
|
626 |
|
Add: China plant relocation charge 5 |
|
— |
|
— |
|
— |
|
|
— |
|
|
27 |
|
|
27 |
|
Adjusted operating income |
$ |
3,240 |
$ |
328 |
$ |
24 |
|
$ |
672 |
|
$ |
24 |
|
$ |
4,288 |
|
Adjusted operating income (loss) 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 (loss) as an internal performance measurement and as one
criterion for evaluating our performance relative to that of our
peers. We believe adjusted operating income (loss) 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 (loss). Further, we believe that adjusted
operating income (loss) is a useful measure because it improves
comparability of results of operations from period to period.
Adjusted operating income (loss) 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 (loss) 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 142,000 team members on October 1, 2022. 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, November 14, 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/910760275. 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, December
14, 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 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 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 attacks, other 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 conduct our operations; (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, including as a result of our plan to relocate certain
corporate team members to our world headquarters in Springdale,
Arkansas; (xv) issues related to food safety, including costs
resulting from product recalls, regulatory compliance and any
related claims or litigation; (xvi) the effect of climate change
and any legal or regulatory response thereto; (xvii) 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; (xviii) adverse results from litigation; (xix) risks
associated with leverage, including cost increases due to rising
interest rates or changes in debt ratings or outlook; (xx)
impairment in the carrying value of our goodwill or indefinite life
intangible assets; (xxi) our participation in a multiemployer
pension plan; (xxii) volatility in capital markets or interest
rates; (xxiii) risks associated with our commodity purchasing
activities; (xxiv) the effect of, or changes in, general economic
conditions; (xxv) impacts on our operations caused by factors and
forces beyond our control, such as natural disasters, fire,
bioterrorism, pandemics, armed conflicts or extreme weather; (xxvi)
failure to maximize or assert our intellectual property rights;
(xxvii) effects related to changes in tax rates, valuation of
deferred tax assets and liabilities, or tax laws and their
interpretation; 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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