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) |
Second Quarter |
|
Six Months Ended |
|
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
Sales |
$ |
13,133 |
|
|
$ |
13,117 |
|
$ |
26,393 |
|
$ |
26,050 |
|
|
|
|
|
|
|
|
Operating Income (Loss) |
$ |
(49 |
) |
|
$ |
1,156 |
|
$ |
418 |
|
$ |
2,611 |
Adjusted1Operating Income
(non-GAAP) |
$ |
65 |
|
|
$ |
1,161 |
|
$ |
518 |
|
$ |
2,593 |
|
|
|
|
|
|
|
|
Net Income (Loss) Per Share
Attributable to Tyson |
$ |
(0.28 |
) |
|
$ |
2.28 |
|
$ |
0.61 |
|
$ |
5.35 |
Adjusted1Net Income (Loss) Per
Share Attributable to Tyson (non-GAAP) |
$ |
(0.04 |
) |
|
$ |
2.29 |
|
$ |
0.82 |
|
$ |
5.16 |
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 $26,393
million, up 1.3% from
prior year
- GAAP operating income of $418
million, down 84%
from prior year; Adjusted operating income of
$518 million, down
80% from prior year
- GAAP EPS of $0.61,
down 89% from prior year;
Adjusted EPS of $0.82,
down 84% from prior
year
- Total Company GAAP operating margin of
1.6%; Adjusted operating margin (non-GAAP)
of 2.0%
- Repurchased 5.1 million
shares for $332 million
Second Quarter Highlights
- Sales of $13,133 million flat from prior
year
- GAAP operating loss of $49 million, down 104% from
prior year; Adjusted operating income of $65 million, down 94% from
prior year
- GAAP EPS of ($0.28), down 112% from prior year;
Adjusted EPS of ($0.04), down 102% from prior year
- Total Company GAAP operating margin of (0.4%); Adjusted
operating margin (non-GAAP) of 0.5%
- Liquidity of $2.2 billion at April 1, 2023; On May 3,
2023, entered into $1.75 billion of new term loan
facilities.
"While the current protein market is challenging, we have a
strong growth strategy in place and are bullish on our long-term
outlook,” said Donnie King, president and CEO of Tyson Foods. “We
saw strong performance in our branded foods business and continue
to be laser-focused on meeting customer needs and planning the
future with them.”
“Through our growth strategy, focus on margin improvement, and
proven leadership team, I am confident in our ability to capture
the opportunities in front of us and create long-term value for
customers, team members, and shareholders.”
SEGMENT RESULTS (in millions)
Sales |
(for the second quarter and six months ended April 1, 2023, and
April 2, 2022) |
|
Second Quarter |
Six Months Ended |
|
|
|
Volume |
Avg. Price |
|
|
Volume |
Avg. Price |
|
|
2023 |
|
|
2022 |
|
Change |
Change |
|
2023 |
|
|
2022 |
|
Change |
Change |
Beef |
$ |
4,617 |
|
$ |
5,034 |
|
(2.9)% |
(5.4)% |
$ |
9,340 |
|
$ |
10,036 |
|
— |
% |
(6.9)% |
Pork |
|
1,421 |
|
|
1,565 |
|
1.1 |
% |
(10.3)% |
|
2,950 |
|
|
3,191 |
|
(3.2)% |
(4.4)% |
Chicken |
|
4,430 |
|
|
4,086 |
|
6.4 |
% |
2.0 |
% |
|
8,693 |
|
|
7,976 |
|
4.5 |
% |
4.5 |
% |
Prepared Foods |
|
2,422 |
|
|
2,393 |
|
(0.4)% |
1.6 |
% |
|
4,960 |
|
|
4,726 |
|
0.4 |
% |
4.6 |
% |
International/Other |
|
634 |
|
|
565 |
|
8.0 |
% |
4.2 |
% |
|
1,246 |
|
|
1,115 |
|
7.2 |
% |
4.5 |
% |
Intersegment Sales |
|
(391 |
) |
|
(526 |
) |
n/a |
n/a |
|
(796 |
) |
|
(994 |
) |
n/a |
n/a |
Total |
$ |
13,133 |
|
$ |
13,117 |
|
3.3 |
% |
(3.2)% |
$ |
26,393 |
|
$ |
26,050 |
|
2.1 |
% |
(0.8)% |
Operating Income (Loss) |
(for the second quarter and six months ended April 1, 2023, and
April 2, 2022) |
|
Second Quarter |
Six Months Ended |
|
|
|
Operating Margin |
|
|
Operating Margin |
|
|
2023 |
|
|
2022 |
|
2023 |
|
2022 |
|
|
2023 |
|
|
2022 |
2023 |
|
2022 |
|
Beef |
$ |
— |
|
$ |
638 |
|
— |
% |
12.7 |
% |
$ |
166 |
|
$ |
1,594 |
1.8 |
% |
15.9 |
% |
Pork |
|
(33 |
) |
|
59 |
|
(2.3)% |
3.8 |
% |
|
(54 |
) |
|
223 |
(1.8)% |
7.0 |
% |
Chicken |
|
(258 |
) |
|
198 |
|
(5.8)% |
4.8 |
% |
|
(189 |
) |
|
338 |
(2.2)% |
4.2 |
% |
Prepared Foods |
|
241 |
|
|
263 |
|
10.0 |
% |
11.0 |
% |
|
499 |
|
|
449 |
10.1 |
% |
9.5 |
% |
International/Other |
|
1 |
|
|
(2 |
) |
n/a |
n/a |
|
(4 |
) |
|
7 |
n/a |
n/a |
Total |
$ |
(49 |
) |
$ |
1,156 |
|
(0.4)% |
8.8 |
% |
$ |
418 |
|
$ |
2,611 |
1.6 |
% |
10.0 |
% |
ADJUSTED SEGMENT RESULTS (in millions)
Adjusted Operating Income (Loss)
(Non-GAAP)1 |
(for the second quarter and six months ended April 1, 2023, and
April 2, 2022) |
|
Second Quarter |
Six Months Ended |
|
|
|
Adjusted Operating Margin (Non-GAAP) |
|
|
Adjusted Operating Margin (Non-GAAP) |
|
|
2023 |
|
|
2022 |
|
2023 |
|
2022 |
|
|
2023 |
|
|
2022 |
2023 |
|
2022 |
|
Beef |
$ |
8 |
|
$ |
638 |
|
0.2 |
% |
12.7 |
% |
$ |
137 |
|
$ |
1,594 |
1.5 |
% |
15.9 |
% |
Pork |
|
(31 |
) |
|
59 |
|
(2.2)% |
3.8 |
% |
|
(50 |
) |
|
223 |
(1.7)% |
7.0 |
% |
Chicken |
|
(166 |
) |
|
203 |
|
(3.7)% |
5.0 |
% |
|
(89 |
) |
|
320 |
(1.0)% |
4.0 |
% |
Prepared Foods |
|
252 |
|
|
263 |
|
10.4 |
% |
11.0 |
% |
|
518 |
|
|
449 |
10.4 |
% |
9.5 |
% |
International/Other |
|
2 |
|
|
(2 |
) |
n/a |
n/a |
|
2 |
|
|
7 |
n/a |
n/a |
Total |
$ |
65 |
|
$ |
1,161 |
|
0.5 |
% |
8.9 |
% |
$ |
518 |
|
$ |
2,593 |
2.0 |
% |
10.0 |
% |
OUTLOOKFor fiscal 2023, the United States
Department of Agriculture (USDA) indicates domestic protein
production (beef, pork, chicken and turkey) should increase
slightly compared to fiscal 2022 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 2023. Certain of the outlook
numbers include adjusted operating margin (a non-GAAP metric) for
each segment. 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 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 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.
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 targeted an aggregate $1
billion in productivity savings by the end of fiscal 2024 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 have surpassed
our aggregate $1 billion target as of the end of the second quarter
of fiscal 2023, more than a year ahead of our plan.
BeefUSDA projects domestic production will
decrease approximately 4% in fiscal 2023 as compared to fiscal
2022. We anticipate an adjusted operating margin of (1)% to 1% in
fiscal 2023 as margins are expected to decrease.
PorkUSDA projects domestic production will be
relatively flat in fiscal 2023 as compared to fiscal 2022. We
anticipate adjusted operating margin of (2)% to 0% in fiscal
2023.
ChickenUSDA projects chicken production will
increase approximately 3% in fiscal 2023 as compared to fiscal
2022. We anticipate an adjusted operating margin of (1)% to 1% 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 $53 billion to $54
billion in fiscal 2023.
Capital ExpendituresWe expect capital
expenditures of approximately $2.3 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 $340 million for fiscal 2023.
LiquidityWe expect total liquidity, which was
approximately $2.2 billion at April 1, 2023, to remain above
our minimum liquidity target of $1.0 billion. On May 3, 2023 we
entered into $1.75 billion of new term loan facilities.
Tax RateWe currently expect our adjusted
effective tax rate to be around 22% for fiscal 2023.
TYSON FOODS,
INC.CONSOLIDATED CONDENSED STATEMENTS OF
INCOME(In millions, except per share
data)(Unaudited)
|
Three Months Ended |
|
Six Months Ended |
|
April 1, 2023 |
|
April 2, 2022 |
|
April 1, 2023 |
|
April 2, 2022 |
Sales |
$ |
13,133 |
|
|
$ |
13,117 |
|
|
$ |
26,393 |
|
|
$ |
26,050 |
|
Cost of Sales |
|
12,606 |
|
|
|
11,382 |
|
|
|
24,898 |
|
|
|
22,300 |
|
Gross Profit |
|
527 |
|
|
|
1,735 |
|
|
|
1,495 |
|
|
|
3,750 |
|
|
|
|
|
|
|
|
|
Selling, General and
Administrative |
|
576 |
|
|
|
579 |
|
|
|
1,077 |
|
|
|
1,139 |
|
Operating Income (Loss) |
|
(49 |
) |
|
|
1,156 |
|
|
|
418 |
|
|
|
2,611 |
|
Other (Income) Expense: |
|
|
|
|
|
|
|
Interest income |
|
(7 |
) |
|
|
(3 |
) |
|
|
(16 |
) |
|
|
(6 |
) |
Interest expense |
|
89 |
|
|
|
97 |
|
|
|
173 |
|
|
|
197 |
|
Other, net |
|
(1 |
) |
|
|
(25 |
) |
|
|
(43 |
) |
|
|
(77 |
) |
Total Other (Income)
Expense |
|
81 |
|
|
|
69 |
|
|
|
114 |
|
|
|
114 |
|
Income (Loss) before Income Taxes |
|
(130 |
) |
|
|
1,087 |
|
|
|
304 |
|
|
|
2,497 |
|
Income Tax Expense
(Benefit) |
|
(39 |
) |
|
|
254 |
|
|
|
75 |
|
|
|
538 |
|
Net Income (Loss) |
|
(91 |
) |
|
|
833 |
|
|
|
229 |
|
|
|
1,959 |
|
Less: Net Income Attributable
to Noncontrolling Interests |
|
6 |
|
|
|
4 |
|
|
|
10 |
|
|
|
9 |
|
Net Income (Loss) Attributable
to Tyson |
$ |
(97 |
) |
|
$ |
829 |
|
|
$ |
219 |
|
|
$ |
1,950 |
|
Weighted Average Shares
Outstanding: |
|
|
|
|
|
|
|
Class A Basic |
|
284 |
|
|
|
291 |
|
|
|
285 |
|
|
|
291 |
|
Class B Basic |
|
70 |
|
|
|
70 |
|
|
|
70 |
|
|
|
70 |
|
Diluted |
|
354 |
|
|
|
364 |
|
|
|
356 |
|
|
|
364 |
|
Net Income (Loss) Per Share
Attributable to Tyson: |
|
|
|
|
|
|
|
Class A Basic |
$ |
(0.28 |
) |
|
$ |
2.34 |
|
|
$ |
0.63 |
|
|
$ |
5.50 |
|
Class B Basic |
$ |
(0.25 |
) |
|
$ |
2.11 |
|
|
$ |
0.56 |
|
|
$ |
4.95 |
|
Diluted |
$ |
(0.28 |
) |
|
$ |
2.28 |
|
|
$ |
0.61 |
|
|
$ |
5.35 |
|
Dividends Declared Per
Share: |
|
|
|
|
|
|
|
Class A |
$ |
0.480 |
|
|
$ |
0.460 |
|
|
$ |
0.980 |
|
|
$ |
0.935 |
|
Class B |
$ |
0.432 |
|
|
$ |
0.414 |
|
|
$ |
0.882 |
|
|
$ |
0.842 |
|
|
|
|
|
|
|
|
|
Sales Growth |
|
0.1 |
% |
|
|
|
|
1.3 |
% |
|
|
Margins: (Percent of
Sales) |
|
|
|
|
|
|
|
Gross Profit |
|
4.0 |
% |
|
|
13.2 |
% |
|
|
5.7 |
% |
|
|
14.4 |
% |
Operating Income (Loss) |
|
-0.4 |
% |
|
|
8.8 |
% |
|
|
1.6 |
% |
|
|
10.0 |
% |
Net Income (Loss) Attributable to Tyson |
|
-0.7 |
% |
|
|
6.3 |
% |
|
|
0.8 |
% |
|
|
7.5 |
% |
Effective Tax Rate |
|
29.4 |
% |
|
|
23.4 |
% |
|
|
24.7 |
% |
|
|
21.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TYSON FOODS,
INC.CONSOLIDATED CONDENSED BALANCE
SHEETS(In
millions)(Unaudited)
|
April 1, 2023 |
|
October 1, 2022 |
Assets |
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$ |
543 |
|
$ |
1,031 |
Accounts receivable, net |
|
2,433 |
|
|
2,577 |
Inventories |
|
5,504 |
|
|
5,514 |
Other current assets |
|
412 |
|
|
508 |
Total Current Assets |
|
8,892 |
|
|
9,630 |
Net Property, Plant and
Equipment |
|
9,351 |
|
|
8,685 |
Goodwill |
|
10,550 |
|
|
10,513 |
Intangible Assets, net |
|
6,157 |
|
|
6,252 |
Other Assets |
|
1,846 |
|
|
1,741 |
Total Assets |
$ |
36,796 |
|
$ |
36,821 |
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
Current Liabilities: |
|
|
|
Current debt |
$ |
1,065 |
|
$ |
459 |
Accounts payable |
|
2,387 |
|
|
2,483 |
Other current liabilities |
|
1,894 |
|
|
2,371 |
Total Current Liabilities |
|
5,346 |
|
|
5,313 |
Long-Term Debt |
|
7,865 |
|
|
7,862 |
Deferred Income Taxes |
|
2,438 |
|
|
2,458 |
Other Liabilities |
|
1,589 |
|
|
1,377 |
|
|
|
|
Total Tyson Shareholders’
Equity |
|
19,399 |
|
|
19,702 |
Noncontrolling Interests |
|
159 |
|
|
109 |
Total Shareholders’
Equity |
|
19,558 |
|
|
19,811 |
|
|
|
|
Total Liabilities and
Shareholders’ Equity |
$ |
36,796 |
|
$ |
36,821 |
TYSON FOODS,
INC.CONSOLIDATED CONDENSED STATEMENTS OF CASH
FLOWS(In
millions)(Unaudited)
|
Six Months Ended |
|
April 1, 2023 |
|
April 2, 2022 |
Cash Flows From Operating
Activities: |
|
|
|
Net income |
$ |
229 |
|
|
$ |
1,959 |
|
Depreciation and amortization |
|
620 |
|
|
|
595 |
|
Deferred income taxes |
|
(29 |
) |
|
|
98 |
|
Other, net |
|
191 |
|
|
|
27 |
|
Net changes in operating assets and liabilities |
|
(242 |
) |
|
|
(1,455 |
) |
Cash Provided by Operating
Activities |
|
769 |
|
|
|
1,224 |
|
|
|
|
|
Cash Flows From Investing
Activities: |
|
|
|
Additions to property, plant and equipment |
|
(1,097 |
) |
|
|
(847 |
) |
Purchases of marketable securities |
|
(15 |
) |
|
|
(18 |
) |
Proceeds from sale of marketable securities |
|
14 |
|
|
|
18 |
|
Acquisition, net of cash acquired |
|
(39 |
) |
|
|
— |
|
Acquisition of equity investments |
|
(37 |
) |
|
|
(96 |
) |
Other, net |
|
(2 |
) |
|
|
58 |
|
Cash Used for Investing
Activities |
|
(1,176 |
) |
|
|
(885 |
) |
|
|
|
|
Cash Flows From Financing
Activities: |
|
|
|
Proceeds from issuance of debt |
|
88 |
|
|
|
47 |
|
Payments on debt |
|
(121 |
) |
|
|
(1,088 |
) |
Proceeds from issuance of commercial paper |
|
4,773 |
|
|
|
— |
|
Repayments of commercial paper |
|
(4,182 |
) |
|
|
— |
|
Purchases of Tyson Class A common stock |
|
(332 |
) |
|
|
(511 |
) |
Dividends |
|
(336 |
) |
|
|
(328 |
) |
Stock options exercised |
|
8 |
|
|
|
113 |
|
Other, net |
|
1 |
|
|
|
— |
|
Cash Used for Financing
Activities |
|
(101 |
) |
|
|
(1,767 |
) |
Effect of Exchange Rate
Changes on Cash |
|
20 |
|
|
|
6 |
|
Decrease in Cash and Cash
Equivalents and Restricted Cash |
|
(488 |
) |
|
|
(1,422 |
) |
Cash and Cash Equivalents and
Restricted Cash at Beginning of Year |
|
1,031 |
|
|
|
2,637 |
|
Cash and Cash Equivalents and
Restricted Cash at End of Period |
|
543 |
|
|
|
1,215 |
|
Less: Restricted Cash at End
of Period |
|
— |
|
|
|
64 |
|
Cash and Cash Equivalents at
End of Period |
$ |
543 |
|
|
$ |
1,151 |
|
|
|
|
|
TYSON FOODS, INC.EBITDA
and Adjusted EBITDA Non-GAAP Reconciliations(In
millions)(Unaudited)
|
Six Months Ended |
|
Fiscal Year Ended |
|
Twelve Months Ended |
|
April 1, 2023 |
|
April 2, 2022 |
|
October 1, 2022 |
|
April 1, 2023 |
|
|
|
|
|
|
|
|
Net income |
$ |
229 |
|
|
$ |
1,959 |
|
|
$ |
3,249 |
|
|
$ |
1,519 |
|
Less: Interest income |
|
(16 |
) |
|
|
(6 |
) |
|
|
(17 |
) |
|
|
(27 |
) |
Add: Interest expense |
|
173 |
|
|
|
197 |
|
|
|
365 |
|
|
|
341 |
|
Add: Income tax expense |
|
75 |
|
|
|
538 |
|
|
|
900 |
|
|
|
437 |
|
Add: Depreciation |
|
500 |
|
|
|
466 |
|
|
|
945 |
|
|
|
979 |
|
Add: Amortization2 |
|
115 |
|
|
|
124 |
|
|
|
246 |
|
|
|
237 |
|
EBITDA |
$ |
1,076 |
|
|
$ |
3,278 |
|
|
$ |
5,688 |
|
|
$ |
3,486 |
|
|
|
|
|
|
|
|
|
Adjustments to EBITDA: |
|
|
|
|
|
|
|
Less: Production facilities
fire insurance proceeds, net of costs3 |
$ |
(35 |
) |
|
$ |
(40 |
) |
|
$ |
(114 |
) |
|
$ |
(109 |
) |
Add: Restructuring and related
charges |
|
43 |
|
|
|
— |
|
|
|
66 |
|
|
|
109 |
|
Add: Plant closures |
|
92 |
|
|
|
— |
|
|
|
— |
|
|
|
92 |
|
Less: Depreciation included in
EBITDA adjustments4 |
|
(19 |
) |
|
|
— |
|
|
|
— |
|
|
|
(19 |
) |
Total Adjusted EBITDA |
$ |
1,157 |
|
|
$ |
3,238 |
|
|
$ |
5,640 |
|
|
$ |
3,559 |
|
|
|
|
|
|
|
|
|
Total gross debt |
|
|
|
|
$ |
8,321 |
|
|
$ |
8,930 |
|
Less: Cash and cash
equivalents |
|
|
|
|
|
(1,031 |
) |
|
|
(543 |
) |
Less: Short-term investments |
|
|
|
|
|
(1 |
) |
|
|
(7 |
) |
Total net debt |
|
|
|
|
$ |
7,289 |
|
|
$ |
8,380 |
|
|
|
|
|
|
|
|
|
Ratio Calculations: |
|
|
|
|
|
|
|
Gross debt/EBITDA |
|
|
|
|
1.5x |
|
2.6x |
Net debt/EBITDA |
|
|
|
|
1.3x |
|
2.4x |
|
|
|
|
|
|
|
|
Gross debt/Adjusted
EBITDA |
|
|
|
|
1.5x |
|
2.5x |
Net debt/Adjusted EBITDA |
|
|
|
|
1.3x |
|
2.4x |
2 Excludes the amortization of debt issuance and debt discount
expense of $5 million for the six months ended April 1, 2023
and April 2, 2022, and $11 million for the fiscal year ended
October 1, 2022 and the twelve months ended April 1, 2023 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. Amount includes insurance proceeds, net of costs
incurred, of $35 million recognized in Cost of Sales in the first
six months of fiscal 2023, $62 million net proceeds recognized in
Cost of Sales and $52 million net proceeds recognized in Other, net
for fiscal 2022, $5 million of costs incurred, net of proceeds
recognized in Cost of Sales in the second quarter of fiscal 2022
and $18 million recognized in Cost of Sales and $22 million net
proceeds recognized in Other, net for the first six months ended
April 2, 2022.
4 Removal of accelerated depreciation of $10 million related to
restructuring and related charges and $9 million related to the
plant closures for the six months ended April 1, 2023 as it is
already included in depreciation expense.
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.Adjusted EPS Non-GAAP
Reconciliation(In millions, except per share
data)(Unaudited)
|
Second Quarter |
|
Six Months Ended |
|
Pretax Impact |
|
EPS Impact |
|
Pretax Impact |
|
EPS Impact |
|
2023 |
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net income (loss) per
share attributable to Tyson (GAAP EPS) |
|
|
|
|
$ |
(0.28 |
) |
|
$ |
2.28 |
|
|
|
|
|
$ |
0.61 |
|
|
$ |
5.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add (Less): Production facilities fire insurance proceeds, net of
costs 3 |
$ |
— |
|
$ |
5 |
|
|
— |
|
|
|
0.01 |
|
$ |
(35 |
) |
|
$ |
(40 |
) |
|
|
(0.07 |
) |
|
|
(0.09 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Restructuring and related
charges |
$ |
22 |
|
$ |
— |
|
|
0.05 |
|
|
|
— |
|
$ |
43 |
|
|
$ |
— |
|
|
|
0.09 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Plant closures |
$ |
92 |
|
$ |
— |
|
|
0.19 |
|
|
|
— |
|
$ |
92 |
|
|
$ |
— |
|
|
|
0.19 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Remeasurement of net
deferred tax liabilities at lower enacted state tax rates |
$ |
— |
|
$ |
— |
|
|
— |
|
|
|
— |
|
$ |
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) per
share attributable to Tyson (Adjusted EPS) |
|
|
|
|
$ |
(0.04 |
) |
|
$ |
2.29 |
|
|
|
|
|
$ |
0.82 |
|
|
$ |
5.16 |
|
Adjusted net income (loss) 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 (loss) 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.Adjusted Operating Income (Loss) Non-GAAP
Reconciliations(In
millions)(Unaudited)
Adjusted Operating Income (Loss) |
(for the second quarter ended April 1, 2023) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income (loss) |
$ |
— |
$ |
(33 |
) |
$ |
(258 |
) |
$ |
241 |
$ |
1 |
$ |
(49 |
) |
Add: Restructuring and related charges |
|
8 |
|
2 |
|
|
— |
|
|
11 |
|
1 |
|
22 |
|
Add: Plant closures |
|
— |
|
— |
|
|
92 |
|
|
— |
|
— |
|
92 |
|
Adjusted operating income (loss) |
$ |
8 |
$ |
(31 |
) |
$ |
(166 |
) |
$ |
252 |
$ |
2 |
$ |
65 |
|
Adjusted Operating Income (Loss) |
(for the second quarter ended April 2, 2022) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income (loss) |
$ |
638 |
$ |
59 |
$ |
198 |
$ |
263 |
$ |
(2 |
) |
$ |
1,156 |
Add: Production facilities fire costs, net of insurance proceeds
3 |
|
— |
|
— |
|
5 |
|
— |
|
— |
|
|
5 |
Adjusted operating income (loss) |
$ |
638 |
$ |
59 |
$ |
203 |
$ |
263 |
$ |
(2 |
) |
$ |
1,161 |
Adjusted Operating Income (Loss) |
(for the six months ended April 1, 2023) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income (loss) |
$ |
166 |
|
$ |
(54 |
) |
$ |
(189 |
) |
$ |
499 |
$ |
(4 |
) |
$ |
418 |
|
(Less)/Add: Production facilities fire insurance proceeds, net of
costs 3 |
|
(42 |
) |
|
— |
|
|
7 |
|
|
— |
|
— |
|
|
(35 |
) |
Add: Restructuring and related charges |
|
13 |
|
|
4 |
|
|
1 |
|
|
19 |
|
6 |
|
|
43 |
|
Add: Plant closures |
|
— |
|
|
— |
|
|
92 |
|
|
— |
|
— |
|
|
92 |
|
Adjusted operating income (loss) |
$ |
137 |
|
$ |
(50 |
) |
$ |
(89 |
) |
$ |
518 |
$ |
2 |
|
$ |
518 |
|
Adjusted Operating Income |
(for the six months ended April 2, 2022) |
|
Beef |
Pork |
Chicken |
Prepared Foods |
International/Other |
Total |
Reported operating income |
$ |
1,594 |
$ |
223 |
$ |
338 |
|
$ |
449 |
$ |
7 |
$ |
2,611 |
|
Less: Production facilities fire insurance proceeds, net of costs
3 |
|
— |
|
— |
|
(18 |
) |
|
— |
|
— |
|
(18 |
) |
Adjusted operating income |
$ |
1,594 |
$ |
223 |
$ |
320 |
|
$ |
449 |
$ |
7 |
$ |
2,593 |
|
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®. 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, May 8, 2023. 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/913941642. 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, June 7,
2023, 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 6317964. 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 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 2023,
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) 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 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: Sean Cornett, 479-466-0401 |
Source: Tyson Foods,
Inc.Category: IR, Newsroom |
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