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, reported the following results:
| (in millions, except per share
data) |
Third Quarter |
|
Nine Months Ended |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
| Sales |
$ |
13,353 |
|
$ |
13,140 |
|
|
$ |
39,744 |
|
$ |
39,533 |
|
| |
|
|
|
|
|
|
|
| Operating Income (Loss) |
$ |
341 |
|
$ |
(350 |
) |
|
$ |
884 |
|
$ |
68 |
|
| Adjusted1Operating Income
(non-GAAP) |
$ |
491 |
|
$ |
179 |
|
|
$ |
1,308 |
|
$ |
697 |
|
| |
|
|
|
|
|
|
|
| Net Income (Loss) Per Share
Attributable to Tyson |
$ |
0.54 |
|
$ |
(1.18 |
) |
|
$ |
1.25 |
|
$ |
(0.56 |
) |
| Adjusted1Net Income (Loss) Per
Share Attributable to Tyson (non-GAAP) |
$ |
0.87 |
|
$ |
0.15 |
|
|
$ |
2.18 |
|
$ |
0.97 |
|
1 The Company reports its financial results in accordance with
U.S. generally accepted accounting principles (GAAP). As used in
this table and throughout this earnings release, adjusted operating
income (loss) and adjusted net income (loss) 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
- Sales of $39,744
million, up 0.5% from prior
year
- GAAP operating income of $884
million, up $816 million
from prior year
- Adjusted operating income of $1,308
million, up 88%
from prior year
- GAAP EPS of $1.25, up $1.81 from prior
year
- Adjusted EPS of
$2.18, up 125%
from prior year
- Total Company GAAP operating margin of
2.2%
- Total Company adjusted operating margin (non-GAAP)
of 3.3%
- Cash provided by operating activities of
$1,973 million, up
38% from prior year
- Free cash flow (non-GAAP) of $1,089 million, up $1,224
million from prior year
Third Quarter Highlights
- Sales of $13,353 million, up 1.6% from prior
year
- GAAP operating income of $341 million, up $691 million
from prior year
- Adjusted operating income of $491 million, up 174% from
prior year
- GAAP EPS of $0.54, up $1.72 from prior
year
- Adjusted EPS of $0.87, up 480% from prior
year
- Total Company GAAP operating margin of
2.6%
- Total Company adjusted operating margin (non-GAAP) of
3.7%
- Liquidity of approximately $4.8 billion as of June 29,
2024
"Our disciplined actions and focus on the fundamentals have
resulted in a positive turnaround of our business," stated Donnie
King, President & CEO of Tyson Foods. "In Q3, we delivered the
highest adjusted operating income in the last seven quarters while
also generating strong free cash flow. Looking ahead, we will
continue to strive to be best-in-class operators, drive
efficiencies, value-up our portfolio, win with customers and
consumers, and be disciplined in our capital deployment."
|
SEGMENT RESULTS (in millions) |
|
Sales |
|
(for the third quarter and nine months ended June 29, 2024, and
July 1, 2023) |
| |
Third Quarter |
Nine Months Ended |
| |
|
|
Volume |
Avg. Price |
|
|
Volume |
Avg. Price |
| |
|
2024 |
|
|
2023 |
|
Change |
Change2 |
|
2024 |
|
|
2023 |
|
Change |
Change2 |
|
Beef |
$ |
5,241 |
|
$ |
4,956 |
|
4.4 |
% |
1.4 |
% |
$ |
15,218 |
|
$ |
14,296 |
|
0.9 |
% |
5.5 |
% |
|
Pork |
|
1,462 |
|
|
1,324 |
|
1.2 |
% |
12.6 |
% |
|
4,465 |
|
|
4,274 |
|
4.0 |
% |
1.5 |
% |
| Chicken |
|
4,076 |
|
|
4,212 |
|
(0.4) |
% |
(3.7) |
% |
|
12,174 |
|
|
12,905 |
|
(2.7) |
% |
(3.2) |
% |
| Prepared
Foods |
|
2,432 |
|
|
2,383 |
|
2.0 |
% |
0.1 |
% |
|
7,379 |
|
|
7,343 |
|
1.7 |
% |
(1.2) |
% |
|
International/Other |
|
582 |
|
|
633 |
|
6.5 |
% |
(14.6) |
% |
|
1,744 |
|
|
1,879 |
|
3.9 |
% |
(11.1) |
% |
| Intersegment
Sales |
|
(440 |
) |
|
(368 |
) |
n/a |
|
n/a |
|
|
(1,236 |
) |
|
(1,164 |
) |
n/a |
|
n/a |
|
|
Total |
$ |
13,353 |
|
$ |
13,140 |
|
1.1 |
% |
0.6 |
% |
$ |
39,744 |
|
$ |
39,533 |
|
(0.1) |
% |
0.7 |
% |
|
Operating Income (Loss) |
|
(for the third quarter and nine months ended June 29, 2024, and
July 1, 2023) |
|
|
Third Quarter |
Nine Months Ended |
| |
|
|
Operating Margin |
|
|
Operating Margin |
| |
|
2024 |
|
|
2023 |
|
2024 |
|
2023 |
|
|
2024 |
|
|
2023 |
|
2024 |
|
2023 |
|
| Beef |
$ |
(69 |
) |
$ |
66 |
|
(1.3) |
% |
1.3 |
% |
$ |
(310 |
) |
$ |
232 |
|
(2.0) |
% |
1.6 |
% |
| Pork |
|
(62 |
) |
|
(74 |
) |
(4.2) |
% |
(5.6) |
% |
|
(24 |
) |
|
(128 |
) |
(0.5) |
% |
(3.0) |
% |
| Chicken |
|
244 |
|
|
(314 |
) |
6.0 |
% |
(7.5) |
% |
|
579 |
|
|
(503 |
) |
4.8 |
% |
(3.9) |
% |
| Prepared
Foods |
|
203 |
|
|
206 |
|
8.3 |
% |
8.6 |
% |
|
676 |
|
|
705 |
|
9.2 |
% |
9.6 |
% |
|
International/Other |
|
25 |
|
|
(234 |
) |
n/a |
|
n/a |
|
|
(37 |
) |
|
(238 |
) |
n/a |
|
n/a |
|
|
Total |
$ |
341 |
|
$ |
(350 |
) |
2.6 |
% |
(2.7) |
% |
$ |
884 |
|
$ |
68 |
|
2.2 |
% |
0.2 |
% |
|
ADJUSTED SEGMENT RESULTS (in millions) |
|
Adjusted Operating Income (Loss)
(Non-GAAP)1 |
|
(for the third quarter and nine months ended June 29, 2024, and
July 1, 2023) |
|
|
Third Quarter |
Nine Months Ended |
| |
|
|
Adjusted Operating Margin (Non-GAAP) |
|
|
Adjusted Operating Margin (Non-GAAP) |
| |
|
2024 |
|
|
2023 |
|
20242 |
|
20232 |
|
|
2024 |
|
|
2023 |
|
20242 |
|
20232 |
|
| Beef |
$ |
(69 |
) |
$ |
79 |
|
(1.3) |
% |
1.6 |
% |
$ |
(220 |
) |
$ |
216 |
|
(1.4) |
% |
1.5 |
% |
| Pork |
|
22 |
|
|
(70 |
) |
1.5 |
% |
(5.3) |
% |
|
123 |
|
|
(120 |
) |
2.7 |
% |
(2.8) |
% |
| Chicken |
|
307 |
|
|
(63 |
) |
7.5 |
% |
(1.5) |
% |
|
659 |
|
|
(152 |
) |
5.4 |
% |
(1.2) |
% |
| Prepared
Foods |
|
203 |
|
|
220 |
|
8.3 |
% |
9.2 |
% |
|
700 |
|
|
738 |
|
9.5 |
% |
10.1 |
% |
|
International/Other |
|
28 |
|
|
13 |
|
n/a |
|
n/a |
|
|
46 |
|
|
15 |
|
n/a |
|
n/a |
|
|
Total |
$ |
491 |
|
$ |
179 |
|
3.7 |
% |
1.4 |
% |
$ |
1,308 |
|
$ |
697 |
|
3.3 |
% |
1.8 |
% |
2 Average Price Change and Adjusted Operating Margin (Non-GAAP)
exclude $38 million in the Chicken segment and Total Company for
the three and nine months ended July 1, 2023 and $45 million in the
Pork segment and Total Company for the three and nine months ended
June 29, 2024 of legal contingency accruals recognized as
reductions to Sales.
OUTLOOKFor fiscal 2024, the United States
Department of Agriculture (USDA) indicates domestic protein
production (beef, pork, chicken and turkey) should increase
slightly compared to fiscal 2023 levels. The following is a summary
of the updated outlook for each of our segments, as well as an
outlook for revenue, capital expenditures, net interest expense,
liquidity and tax rate for fiscal 2024. Certain of the outlook
numbers include adjusted operating income (loss) (a non-GAAP
metric) for each segment. The Company is not able to reconcile its
full-year fiscal 2024 projected adjusted results to its fiscal 2024
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 and the
amount of any potential applicable 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 income (loss) should not be considered a
substitute for operating income (loss) 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.
BeefUSDA projects domestic production will
decrease approximately 2% in fiscal 2024 as compared to fiscal
2023. We anticipate adjusted operating loss between ($400) million
and ($300) million in fiscal 2024.
PorkUSDA projects domestic production will
increase approximately 3% in fiscal 2024 as compared to fiscal
2023. We anticipate adjusted operating income of $100 million to
$200 million in fiscal 2024.
ChickenUSDA projects chicken production will be
flat in fiscal 2024 as compared to fiscal 2023. We anticipate
adjusted operating income of $850 million to $950 million for
fiscal 2024.
Prepared FoodsWe anticipate adjusted operating
income of $850 million to $950 million in fiscal 2024.
International/OtherWe anticipate improved
results from our foreign operations in fiscal 2024 on an adjusted
basis.
Total CompanyWe anticipate total company
adjusted operating income of $1.6 billion to $1.8 billion for
fiscal 2024.
RevenueWe expect sales to be relatively flat in
fiscal 2024 as compared to fiscal 2023.
Capital ExpendituresWe expect capital
expenditures between $1.2 billion and $1.3 billion for fiscal 2024.
Capital expenditures include investments in profit improvement
projects as well as projects for maintenance and repair. This
includes completion of capacity expansion projects as well as new
equipment, automation technology and processes for product
innovation.
Net Interest ExpenseWe expect net interest
expense to approximate $395 million for fiscal 2024.
LiquidityWe expect total liquidity, which was
$4.8 billion as of June 29, 2024, to remain above our minimum
liquidity target of $1.0 billion. We anticipate using existing
liquidity to retire the $1.25 billion senior notes due August
2024.
Tax RateWe currently expect our adjusted
effective tax rate to be 23-24% for fiscal 2024.
|
TYSON FOODS, INC.CONSOLIDATED CONDENSED
STATEMENTS OF INCOME(In millions, except per share
data)(Unaudited) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
June 29, 2024 |
|
July 1, 2023 |
|
June 29, 2024 |
|
July 1, 2023 |
| Sales |
$ |
13,353 |
|
|
$ |
13,140 |
|
|
$ |
39,744 |
|
|
$ |
39,533 |
|
| Cost of Sales |
|
12,475 |
|
|
|
12,463 |
|
|
|
37,177 |
|
|
|
37,361 |
|
| Gross Profit |
|
878 |
|
|
|
677 |
|
|
|
2,567 |
|
|
|
2,172 |
|
| |
|
|
|
|
|
|
|
| Selling, General and
Administrative |
|
537 |
|
|
|
579 |
|
|
|
1,683 |
|
|
|
1,656 |
|
| Goodwill Impairment |
|
— |
|
|
|
448 |
|
|
|
— |
|
|
|
448 |
|
| Operating Income (Loss) |
|
341 |
|
|
|
(350 |
) |
|
|
884 |
|
|
|
68 |
|
| Other (Income) Expense: |
|
|
|
|
|
|
|
|
Interest income |
|
(36 |
) |
|
|
(6 |
) |
|
|
(60 |
) |
|
|
(22 |
) |
|
Interest expense |
|
135 |
|
|
|
89 |
|
|
|
351 |
|
|
|
262 |
|
|
Other, net |
|
(11 |
) |
|
|
(7 |
) |
|
|
(24 |
) |
|
|
(50 |
) |
| Total Other (Income)
Expense |
|
88 |
|
|
|
76 |
|
|
|
267 |
|
|
|
190 |
|
| Income (Loss) before Income
Taxes |
|
253 |
|
|
|
(426 |
) |
|
|
617 |
|
|
|
(122 |
) |
| Income Tax Expense |
|
57 |
|
|
|
9 |
|
|
|
159 |
|
|
|
84 |
|
| Net Income (Loss) |
|
196 |
|
|
|
(435 |
) |
|
|
458 |
|
|
|
(206 |
) |
| Less: Net Income (Loss)
Attributable to Noncontrolling Interests |
|
5 |
|
|
|
(18 |
) |
|
|
15 |
|
|
|
(8 |
) |
| Net Income (Loss) Attributable
to Tyson |
$ |
191 |
|
|
$ |
(417 |
) |
|
$ |
443 |
|
|
$ |
(198 |
) |
| |
|
|
|
|
|
|
|
| Net Income (Loss) Per Share
Attributable to Tyson: |
|
|
|
|
|
|
|
|
Class A Basic |
$ |
0.55 |
|
|
$ |
(1.18 |
) |
|
$ |
1.28 |
|
|
$ |
(0.56 |
) |
|
Class B Basic |
$ |
0.49 |
|
|
$ |
(1.08 |
) |
|
$ |
1.14 |
|
|
$ |
(0.51 |
) |
|
Diluted |
$ |
0.54 |
|
|
$ |
(1.18 |
) |
|
$ |
1.25 |
|
|
$ |
(0.56 |
) |
| Dividends Declared Per
Share: |
|
|
|
|
|
|
|
|
Class A |
$ |
0.490 |
|
|
$ |
0.480 |
|
|
$ |
1.480 |
|
|
$ |
1.460 |
|
|
Class B |
$ |
0.441 |
|
|
$ |
0.432 |
|
|
$ |
1.332 |
|
|
$ |
1.314 |
|
| |
|
|
|
|
|
|
|
| Sales Growth |
|
1.6 |
% |
|
|
|
|
0.5 |
% |
|
|
| Margins: (Percent of
Sales) |
|
|
|
|
|
|
|
|
Gross Profit |
|
6.6 |
% |
|
|
5.2 |
% |
|
|
6.5 |
% |
|
|
5.5 |
% |
|
Operating Income (Loss) |
|
2.6 |
% |
|
(2.7) |
% |
|
|
2.2 |
% |
|
|
0.2 |
% |
|
Net Income (Loss) Attributable to Tyson |
|
1.4 |
% |
|
(3.2) |
% |
|
|
1.1 |
% |
|
(0.5) |
% |
| Effective Tax Rate3 |
|
22.9 |
% |
|
(1.8) |
% |
|
|
25.9 |
% |
|
(67.9) |
% |
3 The effective tax rate for the three and nine months ended
July 1, 2023 was impacted by a $448 million goodwill impairment
recognized during the period as the charge was non-deductible for
income tax purposes.
|
TYSON FOODS, INC.CONSOLIDATED CONDENSED
BALANCE SHEETS(In
millions)(Unaudited) |
| |
June 29, 2024 |
|
September 30, 2023 |
| Assets |
|
|
|
| Current Assets: |
|
|
|
|
Cash and cash equivalents |
$ |
2,569 |
|
$ |
573 |
|
Accounts receivable, net |
|
2,389 |
|
|
2,476 |
|
Inventories |
|
5,033 |
|
|
5,328 |
|
Other current assets |
|
581 |
|
|
345 |
| Total Current Assets |
|
10,572 |
|
|
8,722 |
| Net Property, Plant and
Equipment |
|
9,368 |
|
|
9,634 |
| Goodwill |
|
9,801 |
|
|
9,878 |
| Intangible Assets, net |
|
5,928 |
|
|
6,098 |
| Other Assets |
|
2,063 |
|
|
1,919 |
| Total Assets |
$ |
37,732 |
|
$ |
36,251 |
| |
|
|
|
| Liabilities and
Shareholders’ Equity |
|
|
|
| Current Liabilities: |
|
|
|
|
Current debt |
$ |
1,320 |
|
$ |
1,895 |
|
Accounts payable |
|
2,291 |
|
|
2,594 |
|
Other current liabilities |
|
2,199 |
|
|
2,010 |
| Total Current Liabilities |
|
5,810 |
|
|
6,499 |
| Long-Term Debt |
|
9,701 |
|
|
7,611 |
| Deferred Income Taxes |
|
2,318 |
|
|
2,308 |
| Other Liabilities |
|
1,701 |
|
|
1,578 |
| |
|
|
|
| Total Tyson Shareholders’
Equity |
|
18,076 |
|
|
18,133 |
| Noncontrolling Interests |
|
126 |
|
|
122 |
| Total Shareholders’
Equity |
|
18,202 |
|
|
18,255 |
| |
|
|
|
| Total Liabilities and
Shareholders’ Equity |
$ |
37,732 |
|
$ |
36,251 |
|
TYSON FOODS,
INC.CONSOLIDATED CONDENSED STATEMENTS OF CASH
FLOWS(In
millions)(Unaudited) |
| |
Nine Months Ended |
| |
June 29, 2024 |
|
July 1, 2023 |
| Cash Flows From Operating
Activities: |
|
|
|
|
Net income (loss) |
$ |
458 |
|
|
$ |
(206 |
) |
|
Depreciation and amortization |
|
1,082 |
|
|
|
943 |
|
|
Deferred income taxes |
|
6 |
|
|
|
(54 |
) |
|
Impairment of goodwill |
|
— |
|
|
|
448 |
|
|
Other, net |
|
162 |
|
|
|
200 |
|
|
Net changes in operating assets and liabilities |
|
265 |
|
|
|
98 |
|
| Cash Provided by Operating
Activities |
|
1,973 |
|
|
|
1,429 |
|
| |
|
|
|
| Cash Flows From Investing
Activities: |
|
|
|
|
Additions to property, plant and equipment |
|
(884 |
) |
|
|
(1,564 |
) |
|
Purchases of marketable securities |
|
(23 |
) |
|
|
(21 |
) |
|
Proceeds from sale of marketable securities |
|
21 |
|
|
|
20 |
|
|
Acquisition, net of cash acquired |
|
— |
|
|
|
(262 |
) |
|
Acquisition of equity investments |
|
(28 |
) |
|
|
(50 |
) |
|
Other, net |
|
60 |
|
|
|
5 |
|
| Cash Used for Investing
Activities |
|
(854 |
) |
|
|
(1,872 |
) |
| |
|
|
|
| Cash Flows From Financing
Activities: |
|
|
|
|
Proceeds from issuance of debt |
|
2,391 |
|
|
|
1,117 |
|
|
Payments on debt |
|
(347 |
) |
|
|
(175 |
) |
|
Proceeds from issuance of commercial paper |
|
1,649 |
|
|
|
7,015 |
|
|
Repayments of commercial paper |
|
(2,240 |
) |
|
|
(7,015 |
) |
|
Purchases of Tyson Class A common stock |
|
(44 |
) |
|
|
(343 |
) |
|
Dividends |
|
(513 |
) |
|
|
(503 |
) |
|
Stock options exercised |
|
9 |
|
|
|
10 |
|
|
Other, net |
|
(22 |
) |
|
|
(5 |
) |
| Cash Provided by Financing
Activities |
|
883 |
|
|
|
101 |
|
| Effect of Exchange Rate
Changes on Cash |
|
(6 |
) |
|
|
10 |
|
| Increase (Decrease) in Cash
and Cash Equivalents and Restricted Cash |
|
1,996 |
|
|
|
(332 |
) |
| Cash and Cash Equivalents and
Restricted Cash at Beginning of Year |
|
573 |
|
|
|
1,031 |
|
| Cash and Cash Equivalents and
Restricted Cash at End of Period |
|
2,569 |
|
|
|
699 |
|
| Less: Restricted Cash at End
of Period |
|
— |
|
|
|
— |
|
| Cash and Cash Equivalents at
End of Period |
$ |
2,569 |
|
|
$ |
699 |
|
| |
|
|
|
Non-GAAP Financial Measures
Adjusted Operating Income (Loss), Adjusted Income (Loss) before
Income Taxes, Adjusted Income Tax Expense (Benefit), Adjusted Net
Income (Loss) Attributable to Tyson and Adjusted EPS, EBITDA,
Adjusted EBITDA, net debt to EBITDA, net debt to Adjusted EBITDA
and Free Cash Flow are presented as supplemental financial measures
in the evaluation of our business that are not required by, or
presented in accordance with GAAP. The non-GAAP financial measures
are tools 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. These non-GAAP measures should not
be a substitute for their comparable GAAP financial measures.
Investors should rely primarily on our GAAP results and use
non-GAAP financial measures only supplementally in making
investment decisions. We believe the presentation of these non-GAAP
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. Our calculation of non-GAAP measures
may not be comparable to similarly titled measures reported by
other companies and other companies may not define these non-GAAP
financial measures in the same way, which may limit their
usefulness of comparative measures.
Definitions
EBITDA is defined as net income (loss) before
interest, income taxes (benefits), 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, Adjusted Operating Income (Loss),
Adjusted Income (Loss) before Income Taxes, Adjusted Income Tax
Expense (Benefit), Adjusted Net Income (Loss) Attributable to Tyson
and Adjusted EPS are defined as EBITDA, Operating Income
(Loss), Income (Loss) before Income Taxes, Income Tax Expense
(Benefit), Net Income (Loss) Attributable to Tyson and diluted
earnings per share, respectively, excluding the impacts of any
items that management believes do not directly reflect our core
operations on an ongoing basis.
Free Cash Flow is defined as Cash Provided by
Operating Activities minus payments for Property, Plant and
Equipment.
|
TYSON FOODS, INC.GAAP Results to Non-GAAP Results
Reconciliations(In millions, except per share
data)(Unaudited) |
|
Results for the third quarter ended June 29,
2024 |
|
|
Sales |
Cost of Sales |
Selling, General and Administrative |
Goodwill Impairment |
OperatingIncome (Loss) |
Other (Income) Expense |
Income (Loss) before Income Taxes |
Income Tax Expense (Benefit) |
Net Income (Loss) Attributable to Tyson |
EPS Impact |
| GAAP Results |
|
|
|
|
$ |
341 |
|
|
$ |
253 |
|
$ |
57 |
|
$ |
191 |
|
$ |
0.54 |
|
|
Production facility fire costs, net of insurance proceeds6 |
— |
5 |
|
— |
— |
|
5 |
|
— |
|
|
5 |
|
|
1 |
|
|
4 |
|
|
0.01 |
|
|
Plant closures |
— |
41 |
|
— |
— |
|
41 |
|
— |
|
|
41 |
|
|
8 |
|
|
33 |
|
|
0.09 |
|
|
Legal contingency accrual |
45 |
56 |
|
— |
— |
|
101 |
|
— |
|
|
101 |
|
|
23 |
|
|
78 |
|
|
0.22 |
|
|
The Netherlands facility7 |
— |
3 |
|
— |
— |
|
3 |
|
— |
|
|
3 |
|
|
— |
|
|
3 |
|
|
0.01 |
|
| Adjusted Non-GAAP Results |
|
|
|
|
$ |
491 |
|
|
$ |
403 |
|
$ |
89 |
|
$ |
309 |
|
$ |
0.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results for the third quarter ended July 1,
2023 |
|
|
Sales |
Cost of Sales |
Selling, General and Administrative |
Goodwill Impairment |
OperatingIncome (Loss) |
Other (Income) Expense |
Income (Loss) before Income Taxes |
Income Tax Expense (Benefit) |
Net Income (Loss) Attributable to Tyson |
EPS Impact |
| GAAP Results |
|
|
|
|
$ |
(350 |
) |
|
$ |
(426 |
) |
$ |
9 |
|
$ |
(417 |
) |
$ |
(1.18 |
) |
|
Production facilities fire insurance proceeds, net of costs6 |
— |
(22 |
) |
— |
— |
|
(22 |
) |
(22 |
) |
|
(44 |
) |
|
(11 |
) |
|
(33 |
) |
|
(0.10 |
) |
|
Legal contingency accruals |
38 |
— |
|
— |
— |
|
38 |
|
— |
|
|
38 |
|
|
9 |
|
|
29 |
|
|
0.08 |
|
|
Restructuring and related charges |
— |
19 |
|
31 |
— |
|
50 |
|
— |
|
|
50 |
|
|
12 |
|
|
38 |
|
|
0.11 |
|
|
Goodwill Impairment4 |
— |
— |
|
— |
448 |
|
448 |
|
— |
|
|
448 |
|
|
— |
|
|
424 |
|
|
1.20 |
|
|
Plant closures |
— |
15 |
|
— |
— |
|
15 |
|
— |
|
|
15 |
|
|
3 |
|
|
12 |
|
|
0.04 |
|
| Adjusted Non-GAAP Results |
|
|
|
|
$ |
179 |
|
|
$ |
81 |
|
$ |
22 |
|
$ |
53 |
|
$ |
0.15 |
|
|
Results for the nine months ended June 29,
2024 |
|
|
Sales |
Cost of Sales |
Selling, General and Administrative |
Goodwill Impairment |
OperatingIncome (Loss) |
Other (Income) Expense |
Income (Loss) before Income Taxes |
Income Tax Expense (Benefit) |
Net Income (Loss) Attributable to Tyson |
EPS Impact |
| GAAP Results |
|
|
|
|
$ |
884 |
|
|
$ |
617 |
|
$ |
159 |
|
$ |
443 |
|
$ |
1.25 |
|
|
Production facility fire insurance proceeds, net of costs6 |
— |
(19 |
) |
— |
— |
|
(19 |
) |
(3 |
) |
|
(22 |
) |
|
(5 |
) |
|
(17 |
) |
|
(0.05 |
) |
|
Restructuring and related charges |
— |
— |
|
31 |
— |
|
31 |
|
— |
|
|
31 |
|
|
8 |
|
|
23 |
|
|
0.06 |
|
|
Plant closures |
— |
155 |
|
— |
— |
|
155 |
|
— |
|
|
155 |
|
|
46 |
|
|
109 |
|
|
0.31 |
|
|
Legal contingency accruals |
45 |
129 |
|
— |
— |
|
174 |
|
— |
|
|
174 |
|
|
41 |
|
|
133 |
|
|
0.38 |
|
|
The Netherlands facility7 |
— |
83 |
|
— |
— |
|
83 |
|
— |
|
|
83 |
|
|
— |
|
|
83 |
|
|
0.23 |
|
| Adjusted Non-GAAP Results |
|
|
|
|
$ |
1,308 |
|
|
$ |
1,038 |
|
$ |
249 |
|
$ |
774 |
|
$ |
2.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results for the nine months ended July 1,
2023 |
|
|
Sales |
Cost of Sales |
Selling, General and Administrative |
Goodwill Impairment |
OperatingIncome (Loss) |
Other (Income) Expense |
Income (Loss) before Income Taxes |
Income Tax Expense (Benefit) |
Net Income (Loss) Attributable to Tyson |
EPS Impact |
| GAAP Results |
|
|
|
|
$ |
68 |
|
|
$ |
(122 |
) |
$ |
84 |
|
$ |
(198 |
) |
$ |
(0.56 |
) |
|
Production facilities fire insurance proceeds, net of costs6 |
— |
(57 |
) |
— |
— |
|
(57 |
) |
(22 |
) |
|
(79 |
) |
|
(19 |
) |
|
(60 |
) |
|
(0.17 |
) |
|
Legal contingency accruals |
38 |
— |
|
— |
— |
|
38 |
|
— |
|
|
38 |
|
|
9 |
|
|
29 |
|
|
0.08 |
|
|
Restructuring and related charges |
— |
23 |
|
70 |
|
|
93 |
|
— |
|
|
93 |
|
|
22 |
|
|
71 |
|
|
0.20 |
|
|
Goodwill Impairment4 |
— |
— |
|
— |
448 |
|
448 |
|
— |
|
|
448 |
|
|
— |
|
|
424 |
|
|
1.20 |
|
|
Plant closures |
— |
107 |
|
— |
— |
|
107 |
|
— |
|
|
107 |
|
|
27 |
|
|
80 |
|
|
0.22 |
|
| Adjusted Non-GAAP Results |
|
|
|
|
$ |
697 |
|
|
$ |
485 |
|
$ |
123 |
|
$ |
346 |
|
$ |
0.97 |
|
4 Goodwill impairment is non-deductible for income tax purposes
and the EPS impact is net of $24 million associated with Net Income
(Loss) Attributable to Noncontrolling Interests.
|
TYSON FOODS, INC.Adjusted Operating Income (Loss)
Non-GAAP Reconciliations(In
millions)(Unaudited) |
|
Adjusted Operating Income (Loss) |
|
(for the third quarter ended June 29, 2024) |
| |
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
| Reported operating income
(loss) |
$ |
(69 |
) |
$ |
(62 |
) |
$ |
244 |
$ |
203 |
$ |
25 |
$ |
341 |
|
Add: Production facility fire costs, net of insurance
proceeds6 |
|
— |
|
|
— |
|
|
5 |
|
— |
|
— |
|
5 |
|
Add: Plant closures |
|
— |
|
|
39 |
|
|
2 |
|
— |
|
— |
|
41 |
|
Add: Legal contingency accruals |
|
— |
|
|
45 |
|
|
56 |
|
— |
|
— |
|
101 |
|
Add: the Netherlands facility7 |
|
— |
|
|
— |
|
|
— |
|
— |
|
3 |
|
3 |
|
Adjusted operating income (loss) |
$ |
(69 |
) |
$ |
22 |
|
$ |
307 |
$ |
203 |
$ |
28 |
$ |
491 |
|
Adjusted Operating Income (Loss) |
|
(for the third quarter ended July 1, 2023) |
| |
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
| Reported operating income
(loss) |
$ |
66 |
$ |
(74 |
) |
$ |
(314 |
) |
$ |
206 |
$ |
(234 |
) |
$ |
(350 |
) |
|
Less: Production facility fire insurance proceeds, net of
costs6 |
|
— |
|
— |
|
|
(22 |
) |
|
— |
|
— |
|
|
(22 |
) |
|
Add: Restructuring and related charges |
|
13 |
|
4 |
|
|
10 |
|
|
14 |
|
9 |
|
|
50 |
|
|
Add: Plant closures |
|
— |
|
— |
|
|
15 |
|
|
— |
|
— |
|
|
15 |
|
|
Add: Legal contingency accrual |
|
— |
|
— |
|
|
38 |
|
|
— |
|
— |
|
|
38 |
|
|
Add: Goodwill Impairment |
|
— |
|
— |
|
|
210 |
|
|
— |
|
238 |
|
|
448 |
|
|
Adjusted operating income (loss) |
$ |
79 |
$ |
(70 |
) |
$ |
(63 |
) |
$ |
220 |
$ |
13 |
|
$ |
179 |
|
|
Adjusted Operating Income (Loss) |
|
(for the nine months ended June 29, 2024) |
| |
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
| Reported operating income
(loss) |
$ |
(310 |
) |
$ |
(24 |
) |
$ |
579 |
|
$ |
676 |
$ |
(37 |
) |
$ |
884 |
|
|
Less: Production facility fire insurance proceeds, net of
costs6 |
|
— |
|
|
— |
|
|
(19 |
) |
|
— |
|
— |
|
|
(19 |
) |
|
Add: Restructuring and related charges |
|
4 |
|
|
1 |
|
|
2 |
|
|
24 |
|
— |
|
|
31 |
|
|
Add: Plant closures |
|
41 |
|
|
73 |
|
|
41 |
|
|
— |
|
— |
|
|
155 |
|
|
Add: Legal contingency accruals |
|
45 |
|
|
73 |
|
|
56 |
|
|
— |
|
— |
|
|
174 |
|
|
Add: the Netherlands facility7 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
83 |
|
|
83 |
|
|
Adjusted operating income (loss) |
$ |
(220 |
) |
$ |
123 |
|
$ |
659 |
|
$ |
700 |
$ |
46 |
|
$ |
1,308 |
|
|
Adjusted Operating Income (Loss) |
|
(for the nine months ended July 1, 2023) |
| |
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
| Reported operating income
(loss) |
$ |
232 |
|
$ |
(128 |
) |
$ |
(503 |
) |
$ |
705 |
$ |
(238 |
) |
$ |
68 |
|
|
Less: Production facility fire insurance proceeds, net of
costs6 |
|
(42 |
) |
|
— |
|
|
(15 |
) |
|
— |
|
— |
|
|
(57 |
) |
|
Add: Restructuring and related charges |
|
26 |
|
|
8 |
|
|
11 |
|
|
33 |
|
15 |
|
|
93 |
|
|
Add: Plant closures |
|
— |
|
|
— |
|
|
107 |
|
|
— |
|
— |
|
|
107 |
|
|
Add: Legal contingency accrual |
|
— |
|
|
— |
|
|
38 |
|
|
— |
|
— |
|
|
38 |
|
|
Add: Goodwill Impairment |
|
— |
|
|
— |
|
|
210 |
|
|
— |
|
238 |
|
|
448 |
|
|
Adjusted operating income (loss) |
$ |
216 |
|
$ |
(120 |
) |
$ |
(152 |
) |
$ |
738 |
$ |
15 |
|
$ |
697 |
|
|
TYSON FOODS, INC.EBITDA and Adjusted
EBITDA Non-GAAP Reconciliations(In
millions)(Unaudited) |
| |
Nine Months Ended |
|
Fiscal Year Ended |
|
Twelve Months Ended |
| |
June 29, 2024 |
|
July 1, 2023 |
|
September 30, 2023 |
|
June 29, 2024 |
| |
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
458 |
|
|
$ |
(206 |
) |
|
$ |
(649 |
) |
|
$ |
15 |
|
| Less: Interest income |
|
(60 |
) |
|
|
(22 |
) |
|
|
(30 |
) |
|
|
(68 |
) |
| Add: Interest expense |
|
351 |
|
|
|
262 |
|
|
|
355 |
|
|
|
444 |
|
| Add/(Less): Income tax expense
(benefit) |
|
159 |
|
|
|
84 |
|
|
|
(29 |
) |
|
|
46 |
|
| Add: Depreciation |
|
902 |
|
|
|
762 |
|
|
|
1,100 |
|
|
|
1,240 |
|
| Add: Amortization5 |
|
171 |
|
|
|
174 |
|
|
|
229 |
|
|
|
226 |
|
| EBITDA |
$ |
1,981 |
|
|
$ |
1,054 |
|
|
$ |
976 |
|
|
$ |
1,903 |
|
| |
|
|
|
|
|
|
|
| Adjustments to EBITDA: |
|
|
|
|
|
|
|
| Less: Production facilities
fire insurance proceeds, net of costs6 |
$ |
(22 |
) |
|
$ |
(79 |
) |
|
$ |
(75 |
) |
|
$ |
(18 |
) |
| Add: Restructuring and related
charges |
|
31 |
|
|
|
93 |
|
|
|
124 |
|
|
|
62 |
|
| Add: Plant closures |
|
155 |
|
|
|
107 |
|
|
|
322 |
|
|
|
370 |
|
| Add: Legal contingency
accruals |
|
174 |
|
|
|
38 |
|
|
|
156 |
|
|
|
292 |
|
| Add: The Netherlands
facility7 |
|
83 |
|
|
|
— |
|
|
|
— |
|
|
|
83 |
|
| Add: Goodwill impairment |
|
— |
|
|
|
448 |
|
|
|
781 |
|
|
|
333 |
|
| Less: China plant relocation
remuneration |
|
— |
|
|
|
— |
|
|
|
(19 |
) |
|
|
(19 |
) |
| Add: Product line
discontinuation |
|
— |
|
|
|
— |
|
|
|
17 |
|
|
|
17 |
|
| Less: Depreciation included in
EBITDA adjustments8 |
|
(127 |
) |
|
|
(38 |
) |
|
|
(133 |
) |
|
|
(222 |
) |
| Total Adjusted EBITDA |
$ |
2,275 |
|
|
$ |
1,623 |
|
|
$ |
2,149 |
|
|
$ |
2,801 |
|
| |
|
|
|
|
|
|
|
| Total gross debt |
|
|
|
|
$ |
9,506 |
|
|
$ |
11,021 |
|
| Less: Cash and cash
equivalents |
|
|
|
|
|
(573 |
) |
|
|
(2,569 |
) |
| Less: Short-term
investments |
|
|
|
|
|
(15 |
) |
|
|
(13 |
) |
| Total net debt |
|
|
|
|
$ |
8,918 |
|
|
$ |
8,439 |
|
| |
|
|
|
|
|
|
|
| Ratio Calculations: |
|
|
|
|
|
|
|
| Gross debt/EBITDA |
|
|
|
|
9.7x |
|
|
5.8x |
|
| Net debt/EBITDA |
|
|
|
|
9.1x |
|
|
4.4x |
|
| |
|
|
|
|
|
|
|
| Gross debt/Adjusted
EBITDA |
|
|
|
|
4.4x |
|
|
3.9x |
|
| Net debt/Adjusted EBITDA |
|
|
|
|
4.1x |
|
|
3.0x |
|
5 Excludes the amortization of debt issuance and debt discount
expense of $9 million for the nine months ended June 29, 2024,
$7 million for the nine months ended July 1, 2023, $10 million
for the fiscal year ended September 30, 2023 and $12 million
for the twelve months ended June 29, 2024 as it is included in
interest expense.
6 Relates to fires at production facilities in Chicken in the
fourth quarter of fiscal 2021 and Beef in the fourth quarter of
fiscal 2019.
7 Relates to a fire at our production facility in the
Netherlands in the first quarter of fiscal 2024 and subsequent
decision to sell the facility.
8 Removal of accelerated depreciation of $127 million related to
plant closures for the nine months ended June 29, 2024; $14
million related to restructuring and related charges and $24
million related to plant closures for the nine months ended
July 1, 2023; $19 million related to restructuring and related
charges and $114 million related to plant closures for the twelve
months ended September 30, 2023; and $5 million related to
restructuring and related charges and $217 million related to plant
closures for the twelve months ended June 29, 2024 as they are
already included in depreciation expense.
|
TYSON FOODS, INC.Free Cash Flow Non-GAAP
Reconciliation(In
millions)(Unaudited) |
| |
Nine Months Ended |
| |
June 29, 2024 |
|
July 1, 2023 |
| Cash Provided by Operating
Activities |
$ |
1,973 |
|
|
$ |
1,429 |
|
|
Additions to property, plant and equipment |
|
(884 |
) |
|
|
(1,564 |
) |
| Free cash flow |
$ |
1,089 |
|
|
$ |
(135 |
) |
About Tyson Foods, Inc.Tyson Foods, Inc. (NYSE:
TSN) is a world-class food company and recognized leader in
protein. Founded in 1935 by John W. Tyson, it has grown under four
generations of family leadership. The Company is unified by this
purpose: Tyson Foods. We Feed the World Like Family™ and has a
broad portfolio of iconic products and brands including Tyson®,
Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, State Fair®,
Aidells® and ibp®. Tyson Foods is dedicated to bringing
high-quality food to every table in the world, safely, sustainably,
and affordably, now and for future generations. Headquartered in
Springdale, Arkansas, the company had approximately 139,000 team
members on September 30, 2023. 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 5, 2024. A
link for the webcast of the conference call is available on the
Tyson Investor Relations website at https://ir.tyson.com. The
webcast also can be accessed by the following direct link:
https://events.q4inc.com/attendee/293448139. For those who cannot
participate at the scheduled time, a replay of the live webcast and
the accompanying slides will be available at https://ir.tyson.com.
A telephone replay will also be available until September 5, 2024,
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 5696640. Financial information, such as this news release,
as well as other supplemental data, can be accessed from the
Company's web site at https://ir.tyson.com.
Forward-Looking StatementsCertain information
in this release 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 2024,
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) global pandemics have had, and
may in the future have, an adverse impact on our business and
operations; (ii) the effectiveness of restructuring or financial
excellence programs; (iii) access to foreign markets together with
foreign economic conditions, including currency fluctuations,
import/export restrictions and foreign politics; (iv) cyberattacks,
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 relocation of 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: Laura Burns,
479-713-9890Investor Contact: Sean Cornett, 479-466-0401 |
Source: Tyson Foods,
Inc.Category: IR, Newsroom |
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