(in millions, except per share data) | First Quarter | ||||||
2023 | 2022 | ||||||
Sales | $ | 13,260 | $ | 12,933 | |||
Operating Income | $ | 467 | $ | 1,455 | |||
Adjusted1 Operating Income (non-GAAP) | $ | 453 | $ | 1,432 | |||
Net Income Per Share Attributable to | $ | 0.88 | $ | 3.07 | |||
Adjusted1 Net Income Per Share Attributable to | $ | 0.85 | $ | 2.87 |
1 The Company reports its financial results in accordance with
First Quarter Highlights
- Sales of
$13,260 million up 2.5% from prior year - GAAP operating income of
$467 million , down 68% from prior year; Adjusted operating income of$453 million , down 68% from prior year - GAAP EPS of
$0.88 , down 71% from prior year; Adjusted EPS of$0.85 , down 70% from prior year - Total Company GAAP operating margin of 3.5%; Adjusted operating margin (non-GAAP) of 3.4%
- Repurchased 4.9 million shares for
$313 million - Liquidity of
$2.9 billion atDecember 31, 2022
“We executed our strategy in Q1, growing volume, improving staffing levels, investing in automation and building inventory to meet customer demand, all while maintaining a focus on liquidity and financial health,” said
“We faced some challenges in the first quarter. Market dynamics and some operational inefficiencies impacted our profitability. We expect to improve our performance through the back half of fiscal 2023 and into the future, as we strive to execute with excellence and work to become best in class in our industry.”
“We are optimistic about the long-term outlook for
SEGMENT RESULTS (in millions)
Sales | ||||||||||
(for the first quarter ended | ||||||||||
First Quarter | ||||||||||
Volume | Avg. Price | |||||||||
2023 | 2022 | Change | Change | |||||||
Beef | $ | 4,723 | $ | 5,002 | 2.9 | % | (8.5 | )% | ||
Pork | 1,529 | 1,626 | (7.4 | )% | 1.4 | % | ||||
Chicken | 4,263 | 3,890 | 2.5 | % | 7.1 | % | ||||
2,538 | 2,333 | 1.2 | % | 7.6 | % | |||||
International/Other | 612 | 550 | 6.4 | % | 4.9 | % | ||||
Intersegment Sales | (405 | ) | (468 | ) | n/a | n/a | ||||
Total | $ | 13,260 | $ | 12,933 | 0.8 | % | 1.7 | % |
Operating Income (Loss) | ||||||||||
(for the first quarter ended | ||||||||||
First Quarter | ||||||||||
Operating Margin | ||||||||||
2023 | 2022 | 2023 | 2022 | |||||||
Beef | $ | 166 | $ | 956 | 3.5 | % | 19.1 | % | ||
Pork | (21 | ) | 164 | (1.4 | )% | 10.1 | % | |||
Chicken | 69 | 140 | 1.6 | % | 3.6 | % | ||||
258 | 186 | 10.2 | % | 8.0 | % | |||||
International/Other | (5 | ) | 9 | n/a | n/a | |||||
Total | $ | 467 | $ | 1,455 | 3.5 | % | 11.3 | % |
ADJUSTED SEGMENT RESULTS (in millions)
Adjusted Operating Income (Loss) (Non-GAAP)1 | ||||||||||
(for the first quarter ended | ||||||||||
First Quarter | ||||||||||
Adjusted Operating Margin (Non-GAAP) | ||||||||||
2023 | 2022 | 2023 | 2022 | |||||||
Beef | $ | 129 | $ | 956 | 2.7 | % | 19.1 | % | ||
Pork | (19 | ) | 164 | (1.2 | )% | 10.1 | % | |||
Chicken | 77 | 117 | 1.8 | % | 3.0 | % | ||||
266 | 186 | 10.5 | % | 8.0 | % | |||||
International/Other | — | 9 | n/a | n/a | ||||||
Total | $ | 453 | $ | 1,432 | 3.4 | % | 11.1 | % |
OUTLOOK
For fiscal 2023, the
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
Beef
Pork
Chicken
We anticipate an adjusted operating margin of 8% to 10% in fiscal 2023 driven by volume growth, productivity and disciplined revenue management.
International/Other
We anticipate improved results from our foreign operations in fiscal 2023.
Revenue
We expect sales to be
Capital Expenditures
We expect capital expenditures of approximately
Net Interest Expense
We expect net interest expense to approximate
Liquidity
We expect total liquidity, which was approximately
Tax Rate
We currently expect our adjusted effective tax rate to be around 24% for fiscal 2023.
2 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 the amount of 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.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
Three Months Ended | |||||||
Sales | $ | 13,260 | $ | 12,933 | |||
Cost of Sales | 12,292 | 10,918 | |||||
Gross Profit | 968 | 2,015 | |||||
Selling, General and Administrative | 501 | 560 | |||||
Operating Income | 467 | 1,455 | |||||
Other (Income) Expense: | |||||||
Interest income | (9 | ) | (3 | ) | |||
Interest expense | 84 | 100 | |||||
Other, net | (42 | ) | (52 | ) | |||
Total Other (Income) Expense | 33 | 45 | |||||
Income before Income Taxes | 434 | 1,410 | |||||
Income Tax Expense | 114 | 284 | |||||
Net Income | 320 | 1,126 | |||||
Less: Net Income Attributable to Noncontrolling Interests | 4 | 5 | |||||
Net Income Attributable to | $ | 316 | $ | 1,121 | |||
Weighted Average Shares Outstanding: | |||||||
Class A Basic | 286 | 292 | |||||
Class | 70 | 70 | |||||
Diluted | 358 | 365 | |||||
Net Income Per Share Attributable to | |||||||
Class A Basic | $ | 0.91 | $ | 3.16 | |||
Class | $ | 0.81 | $ | 2.84 | |||
Diluted | $ | 0.88 | $ | 3.07 | |||
Dividends Declared Per Share: | |||||||
Class A | $ | 0.500 | $ | 0.475 | |||
Class B | $ | 0.450 | $ | 0.428 | |||
Sales Growth | 2.5 | % | |||||
Margins: (Percent of Sales) | |||||||
Gross Profit | 7.3 | % | 15.6 | % | |||
Operating Income | 3.5 | % | 11.3 | % | |||
Net Income Attributable to | 2.4 | % | 8.7 | % | |||
Effective Tax Rate | 26.1 | % | 20.2 | % |
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
(Unaudited)
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 654 | $ | 1,031 | |||
Accounts receivable, net | 2,295 | 2,577 | |||||
Inventories | 5,596 | 5,514 | |||||
Other current assets | 408 | 508 | |||||
Total Current Assets | 8,953 | 9,630 | |||||
Net Property, Plant and Equipment | 9,120 | 8,685 | |||||
10,550 | 10,513 | ||||||
Intangible Assets, net | 6,213 | 6,252 | |||||
Other Assets | 1,842 | 1,741 | |||||
Total Assets | $ | 36,678 | $ | 36,821 | |||
Liabilities and Shareholders’ Equity | |||||||
Current Liabilities: | |||||||
Current debt | $ | 490 | $ | 459 | |||
Accounts payable | 2,530 | 2,483 | |||||
Other current liabilities | 2,094 | 2,371 | |||||
Total Current Liabilities | 5,114 | 5,313 | |||||
Long-Term Debt | 7,859 | 7,862 | |||||
Deferred Income Taxes | 2,473 | 2,458 | |||||
Other Liabilities | 1,445 | 1,377 | |||||
Total | 19,635 | 19,702 | |||||
Noncontrolling Interests | 152 | 109 | |||||
Total Shareholders’ Equity | 19,787 | 19,811 | |||||
Total Liabilities and Shareholders’ Equity | $ | 36,678 | $ | 36,821 |
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended | |||||||
Cash Flows From Operating Activities: | |||||||
Net income | $ | 320 | $ | 1,126 | |||
Depreciation and amortization | 303 | 300 | |||||
Deferred income taxes | 8 | 77 | |||||
Other, net | 68 | 11 | |||||
Net changes in operating assets and liabilities | 63 | (82 | ) | ||||
Cash Provided by Operating Activities | 762 | 1,432 | |||||
Cash Flows From Investing Activities: | |||||||
Additions to property, plant and equipment | (589 | ) | (408 | ) | |||
Purchases of marketable securities | (7 | ) | (7 | ) | |||
Proceeds from sale of marketable securities | 7 | 7 | |||||
Acquisition, net of cash acquired | (39 | ) | — | ||||
Acquisition of equity investments | (36 | ) | (45 | ) | |||
Other, net | (5 | ) | (6 | ) | |||
Cash Used for Investing Activities | (669 | ) | (459 | ) | |||
Cash Flows From Financing Activities: | |||||||
Proceeds from issuance of debt | 54 | 26 | |||||
Payments on debt | (58 | ) | (43 | ) | |||
Purchases of | (313 | ) | (348 | ) | |||
Dividends | (169 | ) | (164 | ) | |||
Stock options exercised | 4 | 46 | |||||
Other, net | — | (1 | ) | ||||
Cash Used for Financing Activities | (482 | ) | (484 | ) | |||
Effect of Exchange Rate Changes on Cash | 12 | 2 | |||||
(Decrease) Increase in Cash and Cash Equivalents and Restricted Cash | (377 | ) | 491 | ||||
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 | 654 | 3,128 | |||||
Less: Restricted Cash at End of Period | — | 172 | |||||
Cash and Cash Equivalents at End of Period | $ | 654 | $ | 2,956 |
EBITDA and Adjusted EBITDA Non-GAAP Reconciliations
(In millions)
(Unaudited)
Three Months Ended | Fiscal Year Ended | Twelve Months Ended | |||||||||||||
Net income | $ | 320 | $ | 1,126 | $ | 3,249 | $ | 2,443 | |||||||
Less: Interest income | (9 | ) | (3 | ) | (17 | ) | (23 | ) | |||||||
Add: Interest expense | 84 | 100 | 365 | 349 | |||||||||||
Add: Income tax expense | 114 | 284 | 900 | 730 | |||||||||||
Add: Depreciation | 243 | 236 | 945 | 952 | |||||||||||
Add: Amortization 3 | 58 | 62 | 246 | 242 | |||||||||||
EBITDA | $ | 810 | $ | 1,805 | $ | 5,688 | $ | 4,693 | |||||||
Adjustments to EBITDA: | |||||||||||||||
Less: Production facilities fire insurance proceeds, net of costs 4 | $ | (35 | ) | $ | (45 | ) | $ | (114 | ) | $ | (104 | ) | |||
Add: Restructuring and related charges | 21 | — | 66 | 87 | |||||||||||
Total Adjusted EBITDA | $ | 796 | $ | 1,760 | $ | 5,640 | $ | 4,676 | |||||||
Total gross debt | $ | 8,321 | $ | 8,349 | |||||||||||
Less: Cash and cash equivalents | (1,031 | ) | (654 | ) | |||||||||||
Less: Short-term investments | (1 | ) | (2 | ) | |||||||||||
Total net debt | $ | 7,289 | $ | 7,693 | |||||||||||
Ratio Calculations: | |||||||||||||||
Gross debt/EBITDA | 1.5x | 1.8x | |||||||||||||
Net debt/EBITDA | 1.3x | 1.6x | |||||||||||||
Gross debt/Adjusted EBITDA | 1.5x | 1.8x | |||||||||||||
Net debt/Adjusted EBITDA | 1.3x | 1.6x |
3 Excludes the amortization of debt issuance and debt discount expense of
4 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
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.
Adjusted EPS Non-GAAP Reconciliation
(In millions, except per share data)
(Unaudited)
First Quarter | |||||||||||||||
Pretax Impact | EPS Impact | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Reported net income per share attributable to | $ | 0.88 | $ | 3.07 | |||||||||||
Less: Production facilities fire insurance proceeds, net of costs 4 | $ | (35 | ) | $ | (45 | ) | (0.07 | ) | (0.10 | ) | |||||
Add: Restructuring and related charges | $ | 21 | $ | — | 0.04 | — | |||||||||
Less: Remeasurement of net deferred tax liabilities at lower enacted state tax rates | $ | — | $ | — | — | (0.10 | ) | ||||||||
Adjusted net income per share attributable to | $ | 0.85 | $ | 2.87 |
Adjusted net income per share attributable to
TYSON FOODS, INC.
Adjusted Operating Income (Loss) Non-GAAP Reconciliations
(In millions)
(Unaudited)
Adjusted Operating Income (Loss) | ||||||||||||||||||
(for the first quarter ended | ||||||||||||||||||
Beef | Pork | Chicken | Prepared Foods | International /Other | Total | |||||||||||||
Reported operating income (loss) | $ | 166 | $ | (21 | ) | $ | 69 | $ | 258 | $ | (5 | ) | $ | 467 | ||||
(Less)/Add: Production facilities fire insurance proceeds, net of costs 4 | (42 | ) | — | 7 | — | — | (35 | ) | ||||||||||
Add: Restructuring and related charges | 5 | 2 | 1 | 8 | 5 | 21 | ||||||||||||
Adjusted operating income (loss) | $ | 129 | $ | (19 | ) | $ | 77 | $ | 266 | $ | — | $ | 453 |
Adjusted Operating Income | ||||||||||||||||||
(for the first quarter ended | ||||||||||||||||||
Beef | Pork | Chicken | Prepared Foods | International /Other | Total | |||||||||||||
Reported operating income | $ | 956 | $ | 164 | $ | 140 | $ | 186 | $ | 9 | $ | 1,455 | ||||||
Less: Production facilities fire insurance proceeds, net of costs4 | — | — | (23 | ) | — | — | (23 | ) | ||||||||||
Adjusted operating income | $ | 956 | $ | 164 | $ | 117 | $ | 186 | $ | 9 | $ | 1,432 |
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
Conference Call Information and Other Selected Data
A conference call to discuss the Company's financial results will be held at
Forward-Looking Statements
Certain 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
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