(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||
Par Value | $ |
(d) | Exhibits |
Exhibit Number | Description |
99.1 | |
104 | Cover Page Interactive Data File formatted in iXBRL. |
TYSON FOODS, INC. | |||
Date: February 6, 2020 | By: | /s/ Stewart Glendinning | |
Name: | Stewart Glendinning | ||
Title: | Executive Vice President and Chief Financial Officer | ||
(in millions, except per share data) | First Quarter | ||||||
2020 | 2019 | ||||||
Sales | $ | 10,815 | $ | 10,193 | |||
Operating Income | 826 | 807 | |||||
Net Income | 561 | 552 | |||||
Less: Net Income Attributable to Noncontrolling Interests | 4 | 1 | |||||
Net Income Attributable to Tyson | $ | 557 | $ | 551 | |||
Net Income Per Share Attributable to Tyson | $ | 1.52 | $ | 1.50 | |||
Adjusted¹ Operating Income | $ | 894 | $ | 841 | |||
Adjusted¹ Net Income Per Share Attributable to Tyson | $ | 1.66 | $ | 1.58 |
• | GAAP EPS of $1.52, up 1% from prior year; Adjusted EPS of $1.66, up 5% from prior year |
• | GAAP operating income of $826 million, up 2% from prior year |
• | Adjusted operating income of $894 million, up 6% from prior year |
• | Total Company GAAP operating margin of 7.6%; Adjusted operating margin of 8.3% |
• | Record Beef GAAP operating margin of 10.7% and record Adjusted operating margin of 11.2% |
• | Sales growth of 6% |
Sales | ||||||||||
(for the first quarter ended December 28, 2019, and December 29, 2018) | ||||||||||
First Quarter | ||||||||||
Volume | Avg. Price | |||||||||
2020 | 2019 | Change | Change | |||||||
Beef | $ | 3,838 | $ | 3,926 | (8.0 | )% | 5.8 | % | ||
Pork | 1,379 | 1,179 | 7.3 | % | 9.7 | % | ||||
Chicken | 3,292 | 3,115 | 4.5 | % | 1.2 | % | ||||
Prepared Foods | 2,140 | 2,149 | (3.1 | )% | 2.7 | % | ||||
International/Other | 498 | 143 | 220.2 | % | 27.2 | % | ||||
Intersegment Sales | (332 | ) | (319 | ) | n/a | n/a | ||||
Total | $ | 10,815 | $ | 10,193 | 4.7 | % | 1.4 | % |
Operating Income (Loss) | ||||||||||
(for the first quarter ended December 28, 2019, and December 29, 2018) | ||||||||||
First Quarter | ||||||||||
Operating Margin | ||||||||||
2020 | 2019 | 2020 | 2019 | |||||||
Beef | $ | 410 | $ | 305 | 10.7 | % | 7.8 | % | ||
Pork | 191 | 95 | 13.9 | % | 8.1 | % | ||||
Chicken | 57 | 160 | 1.7 | % | 5.1 | % | ||||
Prepared Foods | 158 | 265 | 7.4 | % | 12.3 | % | ||||
International/Other | 10 | (18 | ) | n/a | n/a | |||||
Total | $ | 826 | $ | 807 | 7.6 | % | 7.9 | % |
Adjusted Operating Income (Non-GAAP) | ||||||||||
(for the first quarter ended December 28, 2019, and December 29, 2018) | ||||||||||
First Quarter | ||||||||||
Adjusted Operating Margin (Non-GAAP) | ||||||||||
2020 | 2019 | 2020 | 2019 | |||||||
Beef | $ | 431 | $ | 305 | 11.2 | % | 7.8 | % | ||
Pork | 193 | 95 | 14.0 | % | 8.1 | % | ||||
Chicken | 78 | 173 | 2.4 | % | 5.6 | % | ||||
Prepared Foods | 180 | 268 | 8.4 | % | 12.5 | % | ||||
International/Other | 12 | — | n/a | n/a | ||||||
Total | $ | 894 | $ | 841 | 8.3 | % | 8.3 | % |
• | Beef - Sales volume decreased due to a reduction in live cattle harvest capacity as a result of a fire that caused the temporary closure of a production facility for the majority of the first quarter of fiscal 2020. Average sales price increased as beef demand remained strong. Operating income increased as we continued to maximize our revenues relative to live fed cattle costs, partially offset by increased operating costs and $16 million of net incremental costs from a production facility fire. |
• | Pork - Sales volume increased due to increased domestic availability of live hogs and strong demand for our pork products. Average sales price increased associated with higher livestock costs and stronger export markets. Operating income increased as we maximized our revenues relative to the live hog markets, partially attributable to favorable export markets and improved operational performance, which were slightly offset by higher operating costs. |
• | Chicken - Sales volume increased primarily due to incremental volume from a business acquisition, partially offset by lower volume from our rendering and blending business. Average sales price increased due to lower rendering and blending sales, which carry a lower average sales price, largely offset by broadly weaker chicken pricing as a result of market conditions. Operating income decreased primarily from challenging pricing conditions. Additionally, operating income in the first quarter of fiscal 2020 was impacted by $21 million in restructuring costs. |
• | Prepared Foods - Sales volume decreased as growth in volume across the consumer products business was offset by other intersegment sales channel shifts. Average sales price increased due to favorable product mix and the pass through of increased raw material costs. Operating income decreased primarily due to increased operating costs, including an $80 million increase in raw material costs. Additionally, operating income in the first quarter of fiscal 2020 was impacted by $22 million in restructuring costs. |
• | Beef – We expect industry fed cattle supplies to increase approximately 1% in fiscal 2020 as compared to fiscal 2019. We expect ample supplies in regions where we operate our plants. For fiscal 2020, we believe our Beef segment's adjusted operating margin will be toward the upper end of 6.5% to 7.5%, absent additional impacts from ASF. |
• | Pork – We expect industry hog supplies to increase approximately 4% in fiscal 2020 as compared to fiscal 2019. We expect increased livestock costs in fiscal 2020 as compared to fiscal 2019. For fiscal 2020, we believe our Pork segment's adjusted operating margin will be 6% to 8%, absent additional impacts from ASF. |
• | Chicken – USDA projects a 4% increase in chicken production in fiscal 2020 as compared to fiscal 2019. For fiscal 2020, we believe our Chicken segment's adjusted operating margin will be 4% to 6%, absent additional impacts from ASF. |
• | Prepared Foods – We expect raw material costs to increase throughout fiscal 2020 as compared to fiscal 2019, but we expect to recover these costs through pricing over time. Given the timing lag on passing these prices through, we may not fully recover these costs within the fiscal year. For fiscal 2020, we believe our Prepared Foods segment's adjusted operating margin will be 10% to 12%. |
• | International/Other – International/Other primarily includes our foreign operations in Asia-Pacific, China-Korea and Europe, third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC. We expect improved results in fiscal 2020 from improvement in our foreign operations as well as the impact of a full year of our recently acquired operations. |
• | Capital Expenditures – For fiscal 2020, we expect capital expenditures to be approximately $1.3 billion. Capital expenditures will include spending for production growth, safety, animal well-being, infrastructure replacements and upgrades, and operational improvements that are expected to result in production and labor efficiencies, yield improvements and sales channel flexibility. |
• | Net Interest Expense – We expect net interest expense to approximate $450 million for fiscal 2020. |
• | Liquidity – We expect total liquidity, which was approximately $1.4 billion at December 28, 2019, to remain above our minimum liquidity target of $1.0 billion. |
• | Tax Rate – We expect our adjusted effective tax rate to be around 23.5% in fiscal 2020. |
Three Months Ended | |||||||
December 28, 2019 | December 29, 2018 | ||||||
Sales | $ | 10,815 | $ | 10,193 | |||
Cost of Sales | 9,375 | 8,838 | |||||
Gross Profit | 1,440 | 1,355 | |||||
Selling, General and Administrative | 614 | 548 | |||||
Operating Income | 826 | 807 | |||||
Other (Income) Expense: | |||||||
Interest income | (3 | ) | (2 | ) | |||
Interest expense | 120 | 99 | |||||
Other, net | (16 | ) | (3 | ) | |||
Total Other (Income) Expense | 101 | 94 | |||||
Income before Income Taxes | 725 | 713 | |||||
Income Tax Expense (Benefit) | 164 | 161 | |||||
Net Income | 561 | 552 | |||||
Less: Net Income Attributable to Noncontrolling Interests | 4 | 1 | |||||
Net Income Attributable to Tyson | $ | 557 | $ | 551 | |||
Weighted Average Shares Outstanding: | |||||||
Class A Basic | 293 | 294 | |||||
Class B Basic | 70 | 70 | |||||
Diluted | 367 | 366 | |||||
Net Income Per Share Attributable to Tyson: | |||||||
Class A Basic | $ | 1.56 | $ | 1.54 | |||
Class B Basic | $ | 1.40 | $ | 1.39 | |||
Diluted | $ | 1.52 | $ | 1.50 | |||
Dividends Declared Per Share: | |||||||
Class A | $ | 0.465 | $ | 0.450 | |||
Class B | $ | 0.419 | $ | 0.405 | |||
Sales Growth | 6.1 | % | |||||
Margins: (Percent of Sales) | |||||||
Gross Profit | 13.3 | % | 13.3 | % | |||
Operating Income | 7.6 | % | 7.9 | % | |||
Net Income Attributable to Tyson | 5.2 | % | 5.4 | % | |||
Effective Tax Rate | 22.7 | % | 22.6 | % |
December 28, 2019 | September 28, 2019 | ||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 497 | $ | 484 | |||
Accounts receivable, net | 2,063 | 2,173 | |||||
Inventories | 4,304 | 4,108 | |||||
Other current assets | 329 | 404 | |||||
Total Current Assets | 7,193 | 7,169 | |||||
Net Property, Plant and Equipment | 7,384 | 7,282 | |||||
Goodwill | 10,862 | 10,844 | |||||
Intangible Assets, net | 6,975 | 7,037 | |||||
Other Assets | 1,397 | 765 | |||||
Total Assets | $ | 33,811 | $ | 33,097 | |||
Liabilities and Shareholders’ Equity | |||||||
Current Liabilities: | |||||||
Current debt | $ | 1,947 | $ | 2,102 | |||
Accounts payable | 1,916 | 1,926 | |||||
Other current liabilities | 1,673 | 1,485 | |||||
Total Current Liabilities | 5,536 | 5,513 | |||||
Long-Term Debt | 9,772 | 9,830 | |||||
Deferred Income Taxes | 2,369 | 2,356 | |||||
Other Liabilities | 1,568 | 1,172 | |||||
Total Tyson Shareholders’ Equity | 14,419 | 14,082 | |||||
Noncontrolling Interests | 147 | 144 | |||||
Total Shareholders’ Equity | 14,566 | 14,226 | |||||
Total Liabilities and Shareholders’ Equity | $ | 33,811 | $ | 33,097 |
Three Months Ended | |||||||
December 28, 2019 | December 29, 2018 | ||||||
Cash Flows From Operating Activities: | |||||||
Net income | $ | 561 | $ | 552 | |||
Depreciation and amortization | 288 | 250 | |||||
Deferred income taxes | 3 | 18 | |||||
Other, net | 27 | 64 | |||||
Net changes in operating assets and liabilities | 15 | (16 | ) | ||||
Cash Provided by Operating Activities | 894 | 868 | |||||
Cash Flows From Investing Activities: | |||||||
Additions to property, plant and equipment | (312 | ) | (318 | ) | |||
Purchases of marketable securities | (35 | ) | (15 | ) | |||
Proceeds from sale of marketable securities | 19 | 15 | |||||
Acquisitions, net of cash acquired | — | (2,141 | ) | ||||
Proceeds from sale of business | 29 | — | |||||
Other, net | (82 | ) | 10 | ||||
Cash Used for Investing Activities | (381 | ) | (2,449 | ) | |||
Cash Flows From Financing Activities: | |||||||
Proceeds from issuance of debt | 38 | 1,807 | |||||
Payments on debt | (31 | ) | (12 | ) | |||
Borrowings on revolving credit facility | 180 | — | |||||
Payments on revolving credit facility | (250 | ) | — | ||||
Proceeds from issuance of commercial paper | 4,675 | 5,538 | |||||
Repayments of commercial paper | (4,855 | ) | (5,406 | ) | |||
Purchases of Tyson Class A common stock | (132 | ) | (83 | ) | |||
Dividends | (150 | ) | (134 | ) | |||
Stock options exercised | 20 | 3 | |||||
Other, net | (2 | ) | (2 | ) | |||
Cash (Used for) Provided by Financing Activities | (507 | ) | 1,711 | ||||
Effect of Exchange Rate Changes on Cash | 7 | — | |||||
Increase in Cash and Cash Equivalents | 13 | 130 | |||||
Cash and Cash Equivalents at Beginning of Year | 484 | 270 | |||||
Cash and Cash Equivalents at End of Period | $ | 497 | $ | 400 |
Three Months Ended | Fiscal Year Ended | Twelve Months Ended | ||||||||||||
December 28, 2019 | December 29, 2018 | September 28, 2019 | December 28, 2019 | |||||||||||
Net income | $ | 561 | $ | 552 | $ | 2,035 | $ | 2,044 | ||||||
Less: Interest income | (3 | ) | (2 | ) | (11 | ) | (12 | ) | ||||||
Add: Interest expense | 120 | 99 | 462 | 483 | ||||||||||
Add: Income tax expense | 164 | 161 | 396 | 399 | ||||||||||
Add: Depreciation | 217 | 184 | 819 | 852 | ||||||||||
Add: Amortization (a) | 68 | 63 | 267 | 272 | ||||||||||
EBITDA | $ | 1,127 | $ | 1,057 | $ | 3,968 | $ | 4,038 | ||||||
Adjustments to EBITDA: | ||||||||||||||
Add: Keystone purchase accounting and acquisition related costs (b) | — | 26 | 37 | 11 | ||||||||||
Add: Impairments net of realized gains associated with the divestiture of businesses (c) | — | — | 41 | 41 | ||||||||||
Add: Restructuring and related charges | 52 | 8 | 41 | 85 | ||||||||||
Add: Beef production facility fire costs, net of insurance proceeds | 16 | — | 31 | 47 | ||||||||||
Add: Pension plan termination charge | — | — | 15 | 15 | ||||||||||
Less: Gain on sale of investment | — | — | (55 | ) | (55 | ) | ||||||||
Total Adjusted EBITDA | $ | 1,195 | $ | 1,091 | $ | 4,078 | $ | 4,182 | ||||||
Total gross debt | $ | 11,932 | $ | 11,719 | ||||||||||
Less: Cash and cash equivalents | (484 | ) | (497 | ) | ||||||||||
Less: Short-term investments | (1 | ) | (1 | ) | ||||||||||
Total net debt | $ | 11,447 | $ | 11,221 | ||||||||||
Ratio Calculations: | ||||||||||||||
Gross debt/EBITDA | 3.0x | 2.9x | ||||||||||||
Net debt/EBITDA | 2.9x | 2.8x | ||||||||||||
Gross debt/Adjusted EBITDA | 2.9x | 2.8x | ||||||||||||
Net debt/Adjusted EBITDA | 2.8x | 2.7x |
(a) | Excludes the amortization of debt issuance and debt discount expense of $3 million for the three months ended December 28, 2019, and December 29, 2018, $12 million for the fiscal year ended September 28, 2019 and $12 million for the twelve months ended December 28, 2019 as it is included in interest expense. |
(b) | Keystone acquisition and integration costs included $11 million of purchase accounting adjustments and $15 million of acquisition related costs for the three months ended December 29, 2018 and included $11 million of purchase accounting adjustments and $26 million acquisition related costs for the fiscal year ended September 28, 2019. |
(c) | The fiscal year ended September 28, 2019 included a $41 million impairment associated with the planned divestiture of a business. |
First Quarter | |||||||||||||||
Pretax Impact | EPS Impact | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Reported net income per share attributable to Tyson | $ | 1.52 | $ | 1.50 | |||||||||||
Add: Restructuring and related charges | $ | 52 | $ | 8 | 0.11 | 0.02 | |||||||||
Add: Beef production facility fire costs, net of insurance proceeds | $ | 16 | $ | — | 0.03 | — | |||||||||
Add: Keystone purchase accounting and acquisition related costs (a) | $ | — | $ | 26 | — | 0.06 | |||||||||
Adjusted net income per share attributable to Tyson | $ | 1.66 | $ | 1.58 |
(a) | Keystone purchase accounting and acquisition related costs for the first quarter of fiscal 2019 included an $11 million purchase accounting adjustment for the fair value step-up of inventory and $15 million of acquisition related costs. |
Adjusted Operating Income (Loss) | ||||||||||||||||||
(for the first quarter ended December 28, 2019) | ||||||||||||||||||
Beef | Pork | Chicken | Prepared Foods | International/Other | Total | |||||||||||||
Reported operating income (loss) | $ | 410 | $ | 191 | $ | 57 | $ | 158 | $ | 10 | $ | 826 | ||||||
Add: Restructuring and related charges | 5 | 2 | 21 | 22 | 2 | 52 | ||||||||||||
Add: Beef production facility fire costs, net of insurance proceeds | 16 | — | — | — | — | 16 | ||||||||||||
Adjusted operating income (loss) | $ | 431 | $ | 193 | $ | 78 | $ | 180 | $ | 12 | $ | 894 |
Adjusted Operating Income (Loss) | ||||||||||||||||||
(for the first quarter ended December 29, 2018) | ||||||||||||||||||
Beef | Pork | Chicken | Prepared Foods | International/Other | Total | |||||||||||||
Reported operating income (loss) | $ | 305 | $ | 95 | $ | 160 | $ | 265 | $ | (18 | ) | $ | 807 | |||||
Add: Restructuring and related charges | — | — | 5 | 3 | — | 8 | ||||||||||||
Add: Keystone purchase accounting and acquisition related costs | — | — | 8 | — | 18 | 26 | ||||||||||||
Adjusted operating income (loss) | $ | 305 | $ | 95 | $ | 173 | $ | 268 | $ | — | $ | 841 |
Media Contact: Gary Mickelson, 479-290-6111 Investor Contact: Jon Kathol, 479-290-4235 | Source: Tyson Foods, Inc. Category: IR, Newsroom |
Document and Entity Information Document |
Feb. 06, 2020
$ / shares
|
---|---|
Entity Central Index Key | 0000100493 |
Document Type | 8-K |
Document Period End Date | Feb. 06, 2020 |
Title of 12(b) Security | Class A Common Stock |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 001-14704 |
Entity Tax Identification Number | 71-0225165 |
Entity Address, Address Line One | 2200 West Don Tyson Parkway, |
Entity Address, City or Town | Springdale, |
Entity Address, State or Province | AR |
Entity Address, Postal Zip Code | 72762-6999 |
City Area Code | (479) |
Local Phone Number | 290-4000 |
Entity Listing, Par Value Per Share | $ 0.10 |
Trading Symbol | TSN |
Security Exchange Name | NYSE |
Entity Registrant Name | TYSON FOODS, INC. |
Amendment Flag | false |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Entity Emerging Growth Company | false |
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