SPRINGDALE, Ark., Jan. 31, 2014 (GLOBE NEWSWIRE) -- Tyson Foods, Inc. (NYSE:TSN), today reported the following results:
(in millions, except per share data) | First Quarter | |
2014 | 2013 | |
Sales | $ 8,761 | $ 8,366 |
Operating Income | 412 | 304 |
Income from Continuing Operations | 252 | 172 |
Loss from Discontinued Operation, Net of Tax | — | (4) |
Net Income | 252 | 168 |
Less: Net Loss Attributable to Noncontrolling Interests | (2) | (5) |
Net Income Attributable to Tyson | $ 254 | $ 173 |
Net Income Per Share from Continuing Operations Attributable to Tyson | $ 0.72 | $ 0.49 |
Net Income Per Share Attributable to Tyson | $ 0.72 | $ 0.48 |
First Quarter Highlights
"I'm very pleased with our strong first quarter results, and I'm confident in my expectations for the full year," said Donnie Smith, president and CEO of Tyson Foods. "We're growing sales and earnings and executing our strategy - including making our third prepared foods acquisition in less than a year - while reinvesting in our existing businesses and buying back shares.
"We're in a position any company wants to be in, which is being able to make deliberate, long-term decisions to create shareholder value," Smith said. "But we're maintaining our sense of urgency, our flexibility and our opportunistic mindset. We're generating momentum that will take us into 2015, 2016 and beyond."
Segment Performance Review (in millions)
Sales | ||||
(for the first quarter ended December 28, 2013, and December 29, 2012) | ||||
First Quarter | ||||
Volume | Avg. Price | |||
2014 | 2013 | Change | Change | |
Chicken | $ 2,981 | $ 2,920 | 3.6% | (1.4)% |
Beef | 3,734 | 3,485 | 4.1% | 2.9% |
Pork | 1,424 | 1,363 | (2.1)% | 6.7% |
Prepared Foods | 907 | 841 | 3.5% | 4.2% |
Other | — | 20 | n/a | n/a |
Intersegment Sales | (285) | (263) | n/a | n/a |
Total | $ 8,761 | $ 8,366 | 2.5% | 2.4% |
Operating Income (Loss) | ||||
(for the first quarter ended December 28, 2013, and December 29, 2012) | ||||
First Quarter | ||||
Operating Margin | ||||
2014 | 2013 | 2014 | 2013 | |
Chicken | $ 225 | $ 111 | 7.5% | 3.8% |
Beef | 58 | 46 | 1.6% | 1.3% |
Pork | 121 | 125 | 8.5% | 9.2% |
Prepared Foods | 16 | 33 | 1.8% | 3.9% |
Other | (8) | (11) | n/a | n/a |
Total | $ 412 | $ 304 | 4.7% | 3.6% |
First quarter of fiscal 2013 reflects a discontinued operation which was part of our Chicken segment.
Outlook
In fiscal 2014, we expect overall domestic protein production (chicken, beef, pork and turkey) to increase approximately 1% from fiscal 2013 levels. Grain supplies are expected to increase in fiscal 2014, which should result in lower input costs. The following is a summary of the fiscal 2014 outlook for each of our segments, as well as an outlook on sales, capital expenditures, net interest expense, debt and liquidity and share repurchases:
TYSON FOODS, INC. | ||
CONSOLIDATED CONDENSED STATEMENTS OF INCOME | ||
(In millions, except per share data) | ||
(Unaudited) | ||
Three Months Ended | ||
December 28, 2013 | December 29, 2012 | |
Sales | $ 8,761 | $ 8,366 |
Cost of Sales | 8,076 | 7,827 |
Gross Profit | 685 | 539 |
Selling, General and Administrative | 273 | 235 |
Operating Income | 412 | 304 |
Other (Income) Expense: | ||
Interest income | (2) | (1) |
Interest expense | 28 | 37 |
Other, net | 3 | — |
Total Other (Income) Expense | 29 | 36 |
Income from Continuing Operations before Income Taxes | 383 | 268 |
Income Tax Expense | 131 | 96 |
Income from Continuing Operations | 252 | 172 |
Loss from Discontinued Operation, Net of Tax | — | (4) |
Net Income | 252 | 168 |
Less: Net Loss Attributable to Noncontrolling Interests | (2) | (5) |
Net Income Attributable to Tyson | $ 254 | $ 173 |
Amounts attributable to Tyson: | ||
Net Income from Continuing Operations | 254 | 177 |
Net Loss from Discontinued Operation | — | (4) |
Net Income Attributable to Tyson | $ 254 | $ 173 |
Weighted Average Shares Outstanding: | ||
Class A Basic | 271 | 285 |
Class B Basic | 70 | 70 |
Diluted | 354 | 362 |
Net Income Per Share from Continuing Operations Attributable to Tyson: | ||
Class A Basic | $ 0.76 | $ 0.51 |
Class B Basic | $ 0.68 | $ 0.46 |
Diluted | $ 0.72 | $ 0.49 |
Net Loss Per Share from Discontinued Operation Attributable to Tyson: | ||
Class A Basic | $ — | $ (0.01) |
Class B Basic | $ — | $ (0.01) |
Diluted | $ — | $ (0.01) |
Net Income Per Share Attributable to Tyson: | ||
Class A Basic | $ 0.76 | $ 0.50 |
Class B Basic | $ 0.68 | $ 0.45 |
Diluted | $ 0.72 | $ 0.48 |
Dividends Declared Per Share: | ||
Class A | $ 0.100 | $ 0.160 |
Class B | $ 0.090 | $ 0.144 |
Sales Growth | 4.7% | |
Margins: (Percent of Sales) | ||
Gross Profit | 7.8% | 6.4% |
Operating Income | 4.7% | 3.6% |
Income from Continuing Operations | 2.9% | 2.1% |
Effective Tax Rate for Continuing Operations | 34.3% | 35.8% |
TYSON FOODS, INC. | ||
CONSOLIDATED CONDENSED BALANCE SHEETS | ||
(In millions) | ||
(Unaudited) | ||
December 28, 2013 | September 28, 2013 | |
Assets | ||
Current Assets: | ||
Cash and cash equivalents | $ 825 | $ 1,145 |
Accounts receivable, net | 1,497 | 1,497 |
Inventories | 2,778 | 2,817 |
Other current assets | 130 | 145 |
Total Current Assets | 5,230 | 5,604 |
Net Property, Plant and Equipment | 4,072 | 4,053 |
Goodwill | 1,907 | 1,902 |
Intangible Assets | 133 | 138 |
Other Assets | 502 | 480 |
Total Assets | $ 11,844 | $ 12,177 |
Liabilities and Shareholders' Equity | ||
Current Liabilities: | ||
Current debt | $ 52 | $ 513 |
Accounts payable | 1,477 | 1,359 |
Other current liabilities | 1,077 | 1,138 |
Total Current Liabilities | 2,606 | 3,010 |
Long-Term Debt | 1,890 | 1,895 |
Deferred Income Taxes | 450 | 479 |
Other Liabilities | 582 | 560 |
Total Tyson Shareholders' Equity | 6,285 | 6,201 |
Noncontrolling Interests | 31 | 32 |
Total Shareholders' Equity | 6,316 | 6,233 |
Total Liabilities and Shareholders' Equity | $ 11,844 | $ 12,177 |
TYSON FOODS, INC. | ||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||
(In millions) | ||
(Unaudited) | ||
Three Months Ended | ||
December 28, 2013 | December 29, 2012 | |
Cash Flows From Operating Activities: | ||
Net income | $ 252 | $ 168 |
Depreciation and amortization | 127 | 130 |
Deferred income taxes | (15) | (9) |
Convertible debt discount | (92) | — |
Other, net | 22 | 23 |
Net changes in working capital | 67 | (122) |
Cash Provided by Operating Activities | 361 | 190 |
Cash Flows From Investing Activities: | ||
Additions to property, plant and equipment | (140) | (157) |
Purchases of marketable securities | (10) | (7) |
Proceeds from sale of marketable securities | 9 | 8 |
Other, net | (3) | 4 |
Cash Used for Investing Activities | (144) | (152) |
Cash Flows From Financing Activities: | ||
Payments on debt | (379) | (35) |
Net proceeds from borrowings | 6 | 24 |
Purchases of Tyson Class A common stock | (159) | (115) |
Dividends | (25) | (53) |
Stock options exercised | 12 | 19 |
Other, net | 5 | 2 |
Cash Used for Financing Activities | (540) | (158) |
Effect of Exchange Rate Changes on Cash | 3 | — |
Decrease in Cash and Cash Equivalents | (320) | (120) |
Cash and Cash Equivalents at Beginning of Year | 1,145 | 1,071 |
Cash and Cash Equivalents at End of Period | $ 825 | $ 951 |
TYSON FOODS, INC. | ||||
EBITDA Reconciliations | ||||
(In millions) | ||||
(Unaudited) | ||||
Three Months Ended | Fiscal Year Ended | Twelve Months Ended | ||
December 28, 2013 | December 29, 2012 | September 28, 2013 | December 28, 2013 | |
Net income | $ 252 | $ 168 | $ 778 | $ 862 |
Less: Interest income | (2) | (1) | (7) | (8) |
Add: Interest expense | 28 | 37 | 145 | 136 |
Add: Income tax expense (a) | 131 | 96 | 409 | 444 |
Add: Depreciation | 120 | 119 | 474 | 475 |
Add: Amortization (b) | 4 | 4 | 17 | 17 |
EBITDA | $ 533 | $ 423 | $ 1,816 | $ 1,926 |
Total gross debt | $ 2,408 | $ 1,942 | ||
Less: Cash and cash equivalents | (1,145) | (825) | ||
Less: Short-term investments | (1) | (1) | ||
Total net debt | $ 1,262 | $ 1,116 | ||
Ratio Calculations: | ||||
Gross debt/EBITDA | 1.3x | 1.0x | ||
Net debt/EBITDA | 0.7x | 0.6x | ||
(a) Includes income tax expense of discontinued operation. | ||||
(b) Excludes the amortization of debt discount expense of $3 million and $7 million for the 3 months ended December 28, 2013, and December 29, 2012, respectively, and $28 million for the fiscal year ended September 28, 2013, as it is included in Interest expense. |
EBITDA represents net income, net of interest, income tax and depreciation and amortization. EBITDA is presented as a supplemental financial measurement in the evaluation of our business. We believe the presentation of this financial measure helps investors to assess our operating performance from period to period and enhances understanding of our financial performance and highlights operational trends. This measure is widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies. However, the measurement of EBITDA may not be comparable to those of other companies in our industry, which limits its usefulness as a comparative measure. EBITDA is not a measure required by or calculated in accordance with GAAP and should not be considered as a substitute 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 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 involve outlays of cash. As a result, actual cash available to service our debt obligations will be different from EBITDA. Investors should rely primarily on our GAAP results, and use non-GAAP financial measures only supplementally, in making investment decisions.
Tyson Foods, Inc., with headquarters in Springdale, Arkansas, is one of the world's largest processors and marketers of chicken, beef and pork, the second-largest food production company in the Fortune 500 and a member of the S&P 500. The Company was founded in 1935 by John W. Tyson, whose family has continued to be involved with son Don Tyson leading the company for many years and grandson John H. Tyson serving as the current Chairman of the Board of Directors. Tyson Foods produces a wide variety of protein-based and prepared food products and is the recognized market leader in the retail and foodservice markets it serves. The Company provides products and services to customers throughout the United States and approximately 130 countries. It has approximately 115,000 Team Members employed at more than 400 facilities and offices in the United States and around the world. Through its Core Values, Code of Conduct and Team Member Bill of Rights, Tyson Foods strives to operate with integrity and trust and is committed to creating value for its shareholders, customers and Team Members. The Company also strives to be faith-friendly, provide a safe work environment and serve as stewards of the animals, land and environment entrusted to it.
A conference call to discuss the Company's financial results will be held at 9 a.m. Eastern Friday, January 31, 2014. To listen live via telephone, call 888-455-8283. International callers dial 1-210-839-8865. The pass code "Tyson Foods" will be required to join the call. If you are unable to listen to the live webcast, it will be archived for one year at http://ir.tyson.com. A telephone replay will be available through February 28, 2014, at 800-839-2338. International callers may access the replay at 1-203-369-3673. The live webcast, as well as the replay, will be available on the Internet at http://ir.tyson.com. 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 Statements
Certain information contained in the press release may constitute forward-looking statements, such as statements relating to expected performance, and including, but not limited to, statements appearing in the "Outlook" section. These forward-looking statements are subject to a number of factors and uncertainties which could cause our actual results and experiences to differ materially from the 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 speak only as of the date made. 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 effect of, or changes in, general economic conditions; (ii) 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; (iii) 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; (iv) successful rationalization of existing facilities and operating efficiencies of the facilities; (v) risks associated with our commodity purchasing activities; (vi) access to foreign markets together with foreign economic conditions, including currency fluctuations, import/export restrictions and foreign politics; (vii) outbreak of a livestock disease (such as avian influenza (AI) or bovine spongiform encephalopathy (BSE)), which could have an adverse effect on livestock we own, the availability of livestock we purchase, consumer perception of certain protein products or our ability to access certain domestic and foreign markets; (viii) changes in availability and relative costs of labor and contract growers and our ability to maintain good relationships with employees, labor unions, contract growers and independent producers providing us livestock; (ix) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation; (x) changes in consumer preference and diets and our ability to identify and react to consumer trends; (xi) significant marketing plan changes by large customers or loss of one or more large customers; (xii) adverse results from litigation; (xiii) risks associated with leverage, including cost increases due to rising interest rates or changes in debt ratings or outlook; (xiv) 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; (xv) our ability to make effective acquisitions or joint ventures and successfully integrate newly acquired businesses into existing operations; (xvi) effectiveness of advertising and marketing programs; and (xvii) those factors listed under Item 1A. "Risk Factors" included in our September 28, 2013, Annual Report filed on Form 10-K.