(d) | Exhibit |
Exhibit Number | Description |
99.1 | Press Release, dated November 18, 2013, announcing results of operations of Tyson Foods, Inc. for its fourth quarter and 12 months ended September 28, 2013 |
TYSON FOODS, INC. | |||
Date: November 18, 2013 | By: | /s/ Dennis Leatherby | |
Name: | Dennis Leatherby | ||
Title: | Executive Vice President and | ||
Chief Financial Officer |
(in millions, except per share data) | Fourth Quarter | 12 Months | |||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Sales | $ | 8,894 | $ | 8,315 | $ | 34,374 | $ | 33,055 | |||||||
Operating Income | 416 | 354 | 1,375 | 1,286 | |||||||||||
Income from Continuing Operations | 259 | 203 | 848 | 614 | |||||||||||
Loss from Discontinued Operation | — | (22 | ) | (70 | ) | (38 | ) | ||||||||
Net Income | 259 | 181 | 778 | 576 | |||||||||||
Less: Net Loss Attributable to Noncontrolling Interests | (2 | ) | (4 | ) | — | (7 | ) | ||||||||
Net Income Attributable to Tyson | $ | 261 | $ | 185 | $ | 778 | $ | 583 | |||||||
Net Income Per Share from Continuing Operations Attributable to Tyson | $ | 0.70 | $ | 0.57 | $ | 2.31 | $ | 1.68 | |||||||
Adjusted1 Net Income Per Share from Continuing Operations Attributable to Tyson | $ | 0.70 | $ | 0.57 | $ | 2.26 | $ | 1.97 | |||||||
Net Income Per Share Attributable to Tyson | $ | 0.70 | $ | 0.51 | $ | 2.12 | $ | 1.58 | |||||||
Adjusted1 Net Income Per Share Attributable to Tyson | $ | 0.70 | $ | 0.55 | $ | 2.22 | $ | 1.91 |
• | Record sales of $8.9 billion, an increase of 7% over last year |
• | Operating income increased 18% to $416 million |
• | Repurchased 9.9 million shares for $300 million |
• | Board declares 50% increase on quarterly dividend from $0.05 to $0.075 on shares of Class A common stock |
• | Record adjusted EPS from continuing operations increased 15% to $2.26 compared to $1.97 last year |
• | Record sales of $34.4 billion, an increase of 4% over last year |
• | Operating income increased 7% to $1,375 million |
• | Repurchased 21.1 million shares for $550 million |
• | Liquidity totaled $2.1 billion at September 28, 2013 |
Sales | ||||||||||||||||||||
(for the fourth quarter and 12 months ended September 28, 2013, and September 29, 2012) | ||||||||||||||||||||
Fourth Quarter | 12 Months | |||||||||||||||||||
Volume | Avg. Price | Volume | Avg. Price | |||||||||||||||||
2013 | 2012 | Change | Change | 2013 | 2012 | Change | Change | |||||||||||||
Chicken | $ | 3,160 | $ | 2,958 | 2.4 | % | 4.3 | % | $ | 12,296 | $ | 11,368 | 1.9 | % | 6.1 | % | ||||
Beef | 3,745 | 3,432 | 4.1 | % | 4.8 | % | 14,400 | 13,755 | (1.8 | )% | 6.6 | % | ||||||||
Pork | 1,402 | 1,319 | (5.6 | )% | 12.6 | % | 5,408 | 5,510 | (3.6 | )% | 1.9 | % | ||||||||
Prepared Foods | 881 | 805 | 5.2 | % | 3.9 | % | 3,322 | 3,237 | 1.9 | % | 0.7 | % | ||||||||
Other | (1 | ) | 43 | n/a | n/a | 46 | 167 | n/a | n/a | |||||||||||
Intersegment Sales | (293 | ) | (242 | ) | n/a | n/a | (1,098 | ) | (982 | ) | n/a | n/a | ||||||||
Total | $ | 8,894 | $ | 8,315 | 1.5 | % | 5.9 | % | $ | 34,374 | $ | 33,055 | (0.2 | )% | 4.6 | % |
Operating Income (Loss) | ||||||||||||||||||||
(for the fourth quarter and 12 months ended September 28, 2013, and September 29, 2012) | ||||||||||||||||||||
Fourth Quarter | 12 Months | |||||||||||||||||||
Operating Margin | Operating Margin | |||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Chicken | $ | 175 | $ | 138 | 5.5 | % | 4.7 | % | $ | 646 | $ | 484 | 5.3 | % | 4.3 | % | ||||
Beef | 162 | 117 | 4.3 | % | 3.4 | % | 296 | 218 | 2.1 | % | 1.6 | % | ||||||||
Pork | 68 | 68 | 4.9 | % | 5.2 | % | 332 | 417 | 6.1 | % | 7.6 | % | ||||||||
Prepared Foods | 16 | 39 | 1.8 | % | 4.8 | % | 101 | 181 | 3.0 | % | 5.6 | % | ||||||||
Other | (5 | ) | (8 | ) | n/a | n/a | — | (14 | ) | n/a | n/a | |||||||||
Total | $ | 416 | $ | 354 | 4.7 | % | 4.3 | % | $ | 1,375 | $ | 1,286 | 4.0 | % | 3.9 | % |
• | Chicken - Sales volumes grew due to increased domestic and international production driven by stronger demand for our chicken products. The increase in average sales price in the fourth quarter and 12 months of fiscal 2013 was due to mix changes and price increases associated with higher input costs. Since many of our sales contracts are formula based or shorter-term in nature, we were able to offset rising input costs through improved pricing and mix. Operating income was positively impacted by increased average sales price and volume, improved live performance and operational execution, as well as improved performance in our foreign-produced operations. These increases were partially offset by increased feed costs of approximately $30 million and $470 million for the fourth quarter and 12 months of fiscal 2013, respectively. |
• | Beef - For the fourth quarter of fiscal 2013, sales volume rose as we increased production due to sufficient cattle supply and strong demand for our beef products. Sales volume decreased for the 12 months of fiscal 2013 due to less outside trim and tallow purchases. Average sales price increased due to lower domestic availability of fed cattle supplies, which drove up livestock costs. Operating income rose due to improved operational execution, less volatile live cattle markets and improved export markets. |
• | Pork - Sales volume decreased as a result of balancing our supply with customer demand and reduced exports. Demand for pork products improved, which drove up average sales price and livestock cost despite a slight increase in live hog supplies. |
• | Prepared Foods - Sales volume increased as a result of improved demand for our prepared products and incremental volumes from the purchase of two businesses in fiscal 2013. Average sales price rose due to price increases associated with higher input costs. Operating income decreased, despite increases in sales volumes and average sales price, as the result of increased raw materials and additional costs incurred as we invested in our lunchmeat business and growth platforms. Because many of our sales contracts are formula based or shorter-term in nature, we are typically able to offset rising input costs through pricing. However, there is a lag time for price increases to take effect. |
• | Chicken – We expect domestic chicken production to increase 3-4% in fiscal 2014 compared to fiscal 2013. Based on current futures prices, we expect lower feed costs in fiscal 2014 compared to fiscal 2013 of approximately $500 million. Many of our sales contracts are formula based or shorter-term in nature, which allows us to adjust pricing when input costs fluctuate. However, there may be a lag time for price changes to take effect. For fiscal 2014, we believe our Chicken segment will be in or above its normalized range of 5.0%-7.0%. |
• | Beef – We expect to see a reduction of industry fed cattle supplies of 2-3% in fiscal 2014 as compared to fiscal 2013. Although we generally expect adequate supplies in regions we operate our plants, there may be periods of imbalance of fed cattle supply and demand. For fiscal 2014, we believe our Beef segment's profitability will be similar to fiscal 2013, but could be below its normalized range of 2.5%-4.5%. |
• | Pork – We expect industry hog supplies to increase 1-2% in fiscal 2014 and exports to improve compared to fiscal 2013. For fiscal 2014, we believe our Pork segment will be in its normalized range of 6.0%-8.0%. |
• | Prepared Foods – We expect operational improvements and pricing to offset increased raw material costs. Because many of our sales contracts are formula based or shorter-term in nature, we are typically able to offset rising input costs through increased pricing. As we continue to invest heavily in our growth platforms, we believe our Prepared Foods segment could be slightly below its normalized range of 4.0%-6.0% for fiscal 2014. |
• | Sales – We expect fiscal 2014 sales to approximate $36 billion as we continue to execute our strategy of accelerating growth in domestic value-added chicken sales, prepared food sales and international chicken production. |
• | Capital Expenditures – We expect fiscal 2014 capital expenditures to approximate $700 million. |
• | Net Interest Expense – We expect net interest expense will approximate $100 million for fiscal 2014. |
• | Debt and Liquidity – Total liquidity at September 28, 2013, was $2.1 billion, well above our goal to maintain liquidity in excess of $1.2 billion. In October 2013, our 2013 notes, with a principal amount of $458 million, matured and we paid them off using cash on hand. |
• | Share Repurchases – We expect to continue repurchasing shares under our share repurchase program. As of September 28, 2013, 14.2 million shares remain authorized for repurchases. The timing and extent to which we repurchase shares will depend upon, among other things, our working capital needs, market conditions, liquidity targets, our debt obligations and regulatory requirements. |
• | Dividends – On November 14, 2013, the Board of Directors increased the quarterly dividend previously declared on August 1, 2013, to $0.075 per share on our Class A common stock and $0.0675 per share on our Class B common stock. The increased quarterly dividend is payable on December 13, 2013, to shareholders of record at the close of business on November 29, 2013. The Board also declared a quarterly dividend of $0.075 per share on our Class A common stock and $0.0675 per share on our Class B common stock, payable on March 14, 2014, to shareholders of record at the close of business on February 28, 2014. |
Three Months Ended | 12 Months Ended | ||||||||||||||
September 28, 2013 | September 29, 2012 | September 28, 2013 | September 29, 2012 | ||||||||||||
Sales | $ | 8,894 | $ | 8,315 | $ | 34,374 | $ | 33,055 | |||||||
Cost of Sales | 8,225 | 7,725 | 32,016 | 30,865 | |||||||||||
Gross Profit | 669 | 590 | 2,358 | 2,190 | |||||||||||
Selling, General and Administrative | 253 | 236 | 983 | 904 | |||||||||||
Operating Income | 416 | 354 | 1,375 | 1,286 | |||||||||||
Other (Income) Expense: | |||||||||||||||
Interest income | (2 | ) | (3 | ) | (7 | ) | (12 | ) | |||||||
Interest expense | 36 | 40 | 145 | 356 | |||||||||||
Other, net | (1 | ) | (6 | ) | (20 | ) | (23 | ) | |||||||
Total Other (Income) Expense | 33 | 31 | 118 | 321 | |||||||||||
Income from Continuing Operations before Income Taxes | 383 | 323 | 1,257 | 965 | |||||||||||
Income Tax Expense | 124 | 120 | 409 | 351 | |||||||||||
Income from Continuing Operations | 259 | 203 | 848 | 614 | |||||||||||
Loss from Discontinued Operation, Net of Tax | — | (22 | ) | (70 | ) | (38 | ) | ||||||||
Net Income | 259 | 181 | 778 | 576 | |||||||||||
Less: Net Loss Attributable to Noncontrolling Interests | (2 | ) | (4 | ) | — | (7 | ) | ||||||||
Net Income Attributable to Tyson | $ | 261 | $ | 185 | $ | 778 | $ | 583 | |||||||
Amounts attributable to Tyson: | |||||||||||||||
Net Income from Continuing Operations | 261 | 207 | 848 | 621 | |||||||||||
Net Loss from Discontinued Operation | — | (22 | ) | (70 | ) | (38 | ) | ||||||||
Net Income Attributable to Tyson | $ | 261 | $ | 185 | $ | 778 | $ | 583 | |||||||
Weighted Average Shares Outstanding: | |||||||||||||||
Class A Basic | 277 | 288 | 282 | 293 | |||||||||||
Class B Basic | 70 | 70 | 70 | 70 | |||||||||||
Diluted | 370 | 363 | 367 | 370 | |||||||||||
Net Income Per Share from Continuing Operations Attributable to Tyson: | |||||||||||||||
Class A Basic | $ | 0.77 | $ | 0.59 | $ | 2.46 | $ | 1.75 | |||||||
Class B Basic | $ | 0.70 | $ | 0.53 | $ | 2.22 | $ | 1.57 | |||||||
Diluted | $ | 0.70 | $ | 0.57 | $ | 2.31 | $ | 1.68 | |||||||
Net Loss Per Share from Discontinued Operation Attributable to Tyson: | |||||||||||||||
Class A Basic | $ | — | $ | (0.06 | ) | $ | (0.20 | ) | $ | (0.11 | ) | ||||
Class B Basic | $ | — | $ | (0.05 | ) | $ | (0.18 | ) | $ | (0.09 | ) | ||||
Diluted | $ | — | $ | (0.06 | ) | $ | (0.19 | ) | $ | (0.10 | ) | ||||
Net Income Per Share Attributable to Tyson: | |||||||||||||||
Class A Basic | $ | 0.77 | $ | 0.53 | $ | 2.26 | $ | 1.64 | |||||||
Class B Basic | $ | 0.70 | $ | 0.48 | $ | 2.04 | $ | 1.48 | |||||||
Diluted | $ | 0.70 | $ | 0.51 | $ | 2.12 | $ | 1.58 | |||||||
Dividends Declared Per Share: | |||||||||||||||
Class A | $ | 0.050 | $ | 0.040 | $ | 0.310 | $ | 0.160 | |||||||
Class B | $ | 0.045 | $ | 0.036 | $ | 0.279 | $ | 0.144 | |||||||
Sales Growth | 7.0 | % | 4.0 | % | |||||||||||
Margins: (Percent of Sales) | |||||||||||||||
Gross Profit | 7.5 | % | 7.1 | % | 6.9 | % | 6.6 | % | |||||||
Operating Income | 4.7 | % | 4.3 | % | 4.0 | % | 3.9 | % | |||||||
Income from Continuing Operations | 2.9 | % | 2.4 | % | 2.5 | % | 1.9 | % | |||||||
Effective Tax Rate for Continuing Operations | 32.5 | % | 37.2 | % | 32.6 | % | 36.4 | % |
September 28, 2013 | September 29, 2012 | ||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 1,145 | $ | 1,071 | |||
Accounts receivable, net | 1,497 | 1,378 | |||||
Inventories | 2,817 | 2,809 | |||||
Other current assets | 145 | 145 | |||||
Total Current Assets | 5,604 | 5,403 | |||||
Net Property, Plant and Equipment | 4,053 | 4,022 | |||||
Goodwill | 1,902 | 1,891 | |||||
Intangible Assets | 138 | 129 | |||||
Other Assets | 480 | 451 | |||||
Total Assets | $ | 12,177 | $ | 11,896 | |||
Liabilities and Shareholders’ Equity | |||||||
Current Liabilities: | |||||||
Current debt | $ | 513 | $ | 515 | |||
Accounts payable | 1,359 | 1,372 | |||||
Other current liabilities | 1,138 | 943 | |||||
Total Current Liabilities | 3,010 | 2,830 | |||||
Long-Term Debt | 1,895 | 1,917 | |||||
Deferred Income Taxes | 479 | 558 | |||||
Other Liabilities | 560 | 549 | |||||
Total Tyson Shareholders’ Equity | 6,201 | 6,012 | |||||
Noncontrolling Interests | 32 | 30 | |||||
Total Shareholders’ Equity | 6,233 | 6,042 | |||||
Total Liabilities and Shareholders’ Equity | $ | 12,177 | $ | 11,896 |
12 Months Ended | |||||||
September 28, 2013 | September 29, 2012 | ||||||
Cash Flows From Operating Activities: | |||||||
Net income | $ | 778 | $ | 576 | |||
Depreciation and amortization | 519 | 499 | |||||
Deferred income taxes | (12 | ) | 140 | ||||
Loss on early extinguishment of debt | — | 167 | |||||
Other, net | 100 | 52 | |||||
Net change in other current assets and liabilities | (71 | ) | (247 | ) | |||
Cash Provided by Operating Activities | 1,314 | 1,187 | |||||
Cash Flows From Investing Activities: | |||||||
Additions to property, plant and equipment | (558 | ) | (690 | ) | |||
Purchases of marketable securities | (135 | ) | (58 | ) | |||
Proceeds from sale of marketable securities | 117 | 47 | |||||
Acquisitions, net of cash acquired | (106 | ) | — | ||||
Other, net | 39 | 41 | |||||
Cash Used for Investing Activities | (643 | ) | (660 | ) | |||
Cash Flows From Financing Activities: | |||||||
Payments on debt | (91 | ) | (993 | ) | |||
Net proceeds from borrowings | 68 | 1,116 | |||||
Purchases of Tyson Class A common stock | (614 | ) | (264 | ) | |||
Dividends | (104 | ) | (57 | ) | |||
Stock options exercised | 123 | 34 | |||||
Other, net | 18 | (7 | ) | ||||
Cash Used for Financing Activities | (600 | ) | (171 | ) | |||
Effect of Exchange Rate Changes on Cash | 3 | (1 | ) | ||||
Increase (Decrease) in Cash and Cash Equivalents | 74 | 355 | |||||
Cash and Cash Equivalents at Beginning of Year | 1,071 | 716 | |||||
Cash and Cash Equivalents at End of Period | $ | 1,145 | $ | 1,071 |
12 Months Ended | |||||||
September 28, 2013 | September 29, 2012 | ||||||
Net income | $ | 778 | $ | 576 | |||
Less: Interest income | (7 | ) | (12 | ) | |||
Add: Interest expense | 145 | 356 | |||||
Add: Income tax expense (a) | 409 | 351 | |||||
Add: Depreciation | 474 | 443 | |||||
Add: Amortization (b) | 17 | 17 | |||||
EBITDA | $ | 1,816 | $ | 1,731 | |||
Total gross debt | $ | 2,408 | $ | 2,432 | |||
Less: Cash and cash equivalents | (1,145 | ) | (1,071 | ) | |||
Less: Short-term investments | (1 | ) | (3 | ) | |||
Total net debt | $ | 1,262 | $ | 1,358 | |||
Ratio Calculations: | |||||||
Gross debt/EBITDA | 1.3x | 1.4x | |||||
Net debt/EBITDA | 0.7x | 0.8x |
(a) | Includes income tax expense of discontinued operation |
(b) | Excludes the amortization of debt discount expense of $28 million and $39 million for the 12 months ended September 28, 2013, and September 29, 2012, respectively, as it is included in Interest expense. |
Three Months Ended | 12 Months Ended | ||||||||||||||
September 28, 2013 | September 29, 2012 | September 28, 2013 | September 29, 2012 | ||||||||||||
Reported net income from continuing operations per share attributable to Tyson | $ | 0.70 | $ | 0.57 | $ | 2.31 | $ | 1.68 | |||||||
Less: $19 million recognized currency translation adjustment gain | — | — | (0.05 | ) | — | ||||||||||
Add: $167 million early extinguishment of debt charge | — | — | — | 0.29 | |||||||||||
Adjusted net income from continuing operations per share attributable to Tyson | $ | 0.70 | $ | 0.57 | $ | 2.26 | $ | 1.97 |
Three Months Ended | 12 Months Ended | ||||||||||||||
September 28, 2013 | September 29, 2012 | September 28, 2013 | September 29, 2012 | ||||||||||||
Reported net income per share attributable to Tyson | $ | 0.70 | $ | 0.51 | $ | 2.12 | $ | 1.58 | |||||||
Less: $19 million recognized currency translation adjustment gain | — | — | (0.05 | ) | — | ||||||||||
Add: $56 million impairment of non-core assets in China | — | — | 0.15 | — | |||||||||||
Add: $167 million early extinguishment of debt charge | — | — | — | 0.29 | |||||||||||
Add: $15 million impairment of non-core assets in China | — | 0.04 | — | 0.04 | |||||||||||
Adjusted net income per share attributable to Tyson | $ | 0.70 | $ | 0.55 | $ | 2.22 | $ | 1.91 |