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) |
Second Quarter |
|
Six Months Ended |
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
Sales |
$ |
13,072 |
|
$ |
13,133 |
|
|
$ |
26,391 |
|
$ |
26,393 |
Operating Income (Loss) |
$ |
312 |
|
$ |
(49 |
) |
|
$ |
543 |
|
$ |
418 |
Adjusted1 Operating Income
(non-GAAP) |
$ |
406 |
|
$ |
65 |
|
|
$ |
817 |
|
$ |
518 |
Net Income (Loss) Per Share
Attributable to Tyson |
$ |
0.41 |
|
$ |
(0.28 |
) |
|
$ |
0.71 |
|
$ |
0.61 |
Adjusted1 Net Income (Loss)
Per Share Attributable to Tyson (non-GAAP) |
$ |
0.62 |
|
$ |
(0.04 |
) |
|
$ |
1.31 |
|
$ |
0.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Six
Months Highlights
- Sales
of $26,391
million, flat
from prior
year
- GAAP
operating income
of $543 million,
up 30% from
prior year
- Adjusted
operating income
of $817 million,
up 58% from
prior year
- GAAP
EPS of $0.71,
up 16% from
prior year
- Adjusted
EPS of $1.31,
up 60% from
prior year
- Total
Company GAAP
operating margin
of 2.1%
- Total
Company adjusted
operating margin
(non-GAAP) of
3.1%
- Cash
provided by
operating activities
of $1,177
million, up 53%
from prior
year
- Free
cash flow
(non-GAAP) of
$556 million, up
$884 million
from prior
year
Second Quarter
Highlights
- Sales
of $13,072
million, down
0.5% from prior
year
- GAAP
operating income
of $312 million,
up 737% from
prior year
- Adjusted
operating income
of $406 million,
up 525% from
prior year
- GAAP
EPS of $0.41,
up $0.69 from
prior year
- Adjusted
EPS of $0.62,
up $0.66 from
prior year
- Total
Company GAAP
operating margin
of 2.4%
- Total
Company adjusted
operating margin
(non-GAAP) of
3.1%
- Liquidity
of approximately
$4.4 billion as
of March 30,
2024; issued
$1.5 billion
senior notes
"During the second quarter, we continued our positive momentum
and made progress on our key initiatives. The strategies we have
implemented are delivering tangible results, as evidenced by our
return to year-over-year bottom line growth," said Donnie King,
President & CEO of Tyson Foods. "Looking to the back half of
the year, we will continue to focus on executing the fundamentals
and leveraging our multi-protein portfolio. We are energized by our
progress to-date and laser-focused on driving long-term value."
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 revenues, 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 ($100) 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 $50 million to
$150 million in fiscal 2024.
ChickenUSDA projects chicken production will
increase approximately 1% in fiscal 2024 as compared to fiscal
2023. We anticipate adjusted operating income of $700 million to
$900 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 $1.4 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 $1.4 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 $400 million for fiscal 2024.
LiquidityWe expect total liquidity, which was
approximately $4.4 billion as of March 30, 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 around 24% for fiscal
2024.
Non-GAAP Financial
MeasuresAdjusted 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.
2 Excludes the amortization of debt issuance and debt discount
expense of $5 million for the six months ended March 30, 2024 and
April 1, 2023, and $10 million for the fiscal year ended September
30, 2023 and the twelve months ended March 30, 2024 as it is
included in interest expense.3 Relates to fires at production
facilities in Chicken in the fourth quarter of fiscal 2021 and Beef
in the fourth quarter of fiscal 2019.4 Relates to a fire at our
production facility in the Netherlands in the first quarter of
fiscal 2024 and current intention to discontinue the use of certain
productive assets.5 Removal of accelerated depreciation of $92
million related to plant closures for the six months ended March
30, 2024; $10 million related to restructuring and related charges
and $9 million related to plant closures for the six months ended
April 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 $9 million related to
restructuring and related charges and $197 million related to plant
closures for the twelve months ended March 30, 2024 as they are
already included in depreciation expense.
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, May 6,
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/703721918. 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 June 6, 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 8804308.
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
Photos accompanying this announcement are available at:
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