* 4th quarter EPS of $0.28 as compared to $0.19 last year
* Chicken 4th quarter operating income increased 40% year over year
* Pork 4th quarter operating income increased 39% year over year
* Cash flows from operations for the year continue to be strong
SPRINGDALE, Ark., Nov. 14 /PRNewswire-FirstCall/ -- Tyson Foods, Inc.
(NYSE: TSN), today reported $0.28 diluted earnings per share for the fourth
fiscal quarter ended October 1, 2005, compared to $0.19 diluted earnings per
share in the same quarter last year. Fourth quarter 2005 sales were
$6.5 billion compared to $7.1 billion for the same period last year. Operating
income was $190 million compared to $178 million and net income was
$98 million compared to $66 million for the same period last year.
The Company's accounting cycle resulted in a 13-week fourth quarter and
52-week year in fiscal 2005, as compared to a 14-week fourth quarter and
53-week year in fiscal 2004.
Earnings for the fourth quarter of fiscal 2005 included a non-recurring
income tax net benefit of $15 million. The net benefit includes the reversal
of tax reserves, partially offset by an income tax charge related to the
repatriation of foreign income. Additionally, the fourth quarter of fiscal
2005 included $8 million of pretax losses related to Hurricane Katrina.
Combined, these items increased diluted earnings per share by $0.03. The
Company anticipates additional Hurricane Katrina related costs in the first
quarter of fiscal 2006.
Pretax earnings for the fourth quarter of fiscal 2004 included costs of
$46 million, or $0.08 per diluted share, related to fixed asset write-downs
and intangible asset impairments.
Diluted earnings per share for fiscal year 2005 were $0.99 compared to
$1.13 in the same period last year. Sales for fiscal year 2005 were $26.0
billion compared to $26.4 billion for the same period last year. Operating
income for fiscal year 2005 was $765 million compared to $925 million and net
income was $353 million compared to $403 million for the same period last
year.
Pretax earnings for fiscal year 2005 included $33 million of costs related
to a legal settlement involving the Company's live swine operations,
$14 million of costs for plant closings, $8 million of losses related to
Hurricane Katrina, $12 million received in connection with vitamin antitrust
litigation and a gain of $8 million from the sale of the Company's remaining
interest in Specialty Brands, Inc. Additionally, earnings included a
non-recurring income tax net benefit of $15 million. Combined, these items
decreased diluted earnings per share by $0.02.
Pretax earnings for fiscal year 2004 included $40 million of costs for
plant closings, $61 million of BSE-related charges and $46 million of fixed
asset write-downs and intangible asset impairments. Combined, these items
decreased diluted earnings per share by $0.26.
"I am proud of the way our people executed our business strategy during
the challenging circumstances we faced in fiscal 2005," John Tyson, chairman
and CEO, said. "Our cash flow remains strong, and our debt-to-capital ratio
improved to 39.2%, surpassing our goal of 40% for fiscal 2005. Our chicken
business performed well, and our pork business improved in the fourth quarter.
However, with export markets closed throughout the year and Canadian import
issues, our beef business was difficult.
"We are encouraged by recent developments in export market access, but
fiscal 2006 will present only gradual recovery in beef as those markets begin
to open and cattle supplies improve. As domestic hog supplies continue to
improve, the pork segment should generate more normal returns. We expect our
chicken business to remain solid, and our Prepared Foods' segment market share
to improve."
Outlook
Based upon the Company's outlook for fiscal year 2006, including its view
of all the applicable markets, the Company is estimating its fiscal 2006 GAAP
diluted earnings per share to be in the range of $0.95 to $1.25.
Segment Performance Review (in millions)
Sales
(for the fourth quarter and 12 months ended October 1, 2005, and
October 2, 2004)
Fourth Quarter 12 Months
Avg. Avg.
(13 wks) (14 wks) Sales (52 wks) (53 wks) Sales
Sales Sales Volume Price Sales Sales Volume Price
2005 2004 Change Change 2005 2004 Change Change
Chicken $2,088 $2,309 (11.2)% 1.8% $8,295 $8,363 (2.6)% 1.8%
Beef 2,947 3,148 (1.5)% (4.9)% 11,618 11,951 (0.0)% (2.8)%
Pork 763 889 (9.4)% (5.4)% 3,247 3,185 (4.6)% 6.9%
Prepared
Foods 682 794 (11.6)% (2.8)% 2,801 2,891 (6.7)% 3.8%
Other 15 9 n/a n/a 53 51 n/a n/a
Total $6,495 $7,149 (7.4)% (1.9)% $26,014 $26,441 (2.3)% 0.7%
Operating Income (Loss)
(for the fourth quarter and 12 months ended October 1, 2005, and
October 2, 2004)
Fourth Quarter 12 Months
Operating Margin Operating Margin
2005 2004 2005 2004 2005 2004 2005 2004
Chicken $137 $98 6.6% 4.2% $582 $548 7.0% 6.6%
Beef (13) 40 (0.4)% 1.3% (12) 127 (0.1)% 1.1%
Pork 32 23 4.2% 2.6% 47 140 1.4% 4.4%
Prepared
Foods 18 (5) 2.6% (0.6)% 78 28 2.8% 1.0%
Other 16 22 n/a n/a 70 82 n/a n/a
Total $190 $178 2.9% 2.5% $765 $925 2.9% 3.5%
Chicken (32.1% of Net Sales, 72.1% of Total Operating Income -
4th Quarter 2005)
(31.9% of Net Sales, 76.1% of Total Operating Income -
12 Months 2005)
* Operating margins increased, primarily due to higher average sales
prices and decreased net grain costs.
Chicken segment sales decreased 9.6% and 0.8% in the fourth quarter and 12
months of fiscal 2005, respectively, compared to the same periods last year.
Sales declines were primarily due to lower volumes, caused largely by one less
week of sales, partially offset by higher average sales prices and improved
product mix.
Chicken segment operating income increased $39 million and $34 million in
the fourth quarter and 12 months of fiscal 2005, respectively, as compared to
the same periods last year. Excluding fiscal 2005 charges of $12 million
related to plant closing accruals and $8 million of hurricane losses, and
fiscal 2004 charges of $13 million related to fixed asset write-downs and $13
million of plant closing related accruals, operating income increased $28
million. Operating income for the 12 months of fiscal 2005 was positively
impacted by decreased grain costs of $312 million. However, the current year
benefits from decreased grain costs were partially offset by the effect of the
Company realizing a loss of $27 million in fiscal 2005 as compared to a gain
of $127 million in fiscal 2004 from the Company's commodity risk management
activities. Additionally, fiscal 2005 operating income was negatively
impacted by higher energy costs.
Beef (45.4% of Net Sales, (6.8)% of Total Operating Income -
4th Quarter 2005)
(44.7% of Net Sales, (1.6)% of Total Operating Income -
12 Months 2005)
* Lower live costs were more than offset by decreased average sales
prices, lower production volumes and higher per head operating costs.
Beef segment sales decreased 6.4% and 2.8% in the fourth quarter and 12
months of fiscal 2005, respectively, compared to the same periods last year.
Sales declines primarily resulted from the effects of import and export
restrictions. Those restrictions contributed to lower international sales
volumes and lower average domestic sales prices due in part to the mix of
products allowed for export. Additionally the current year had one less week
of sales.
Operating income for the fourth quarter of fiscal 2005 decreased $58
million as compared to the same period last year, excluding $5 million of
charges recorded in the fourth quarter of fiscal 2004 related to fixed asset
write-downs and intangible asset impairments. Operating income was negatively
impacted by decreased volumes and margins at the Company's Lakeside operation
in Canada.
Fiscal 2005 operating income decreased $215 million as compared to the
prior year, excluding $10 million received in connection with vitamin
antitrust litigation in fiscal 2005, prior year BSE-related charges of $61
million and $5 million of charges related to fixed asset write-downs and
intangible asset impairments recorded in fiscal 2004. The decrease in
operating income was primarily due to lower domestic cattle supplies and
restrictions on imports of Canadian cattle for most of the year which resulted
in lower production volumes and raised the operating cost per head.
Additionally, operating income was negatively impacted by decreased volumes
and margins at the Company's Lakeside operation in Canada.
Pork (11.7% of Net Sales, 16.8% of Total Operating Income -
4th Quarter 2005)
(12.5% of Net Sales, 6.1% of Total Operating Income -
12 Months 2005)
* Higher average sales prices for the fiscal year were offset by higher
live prices and legal settlement costs resulting in decreased operating
margins.
Pork segment sales decreased 14.2% and increased 1.9% for the fourth
quarter and 12 months of fiscal 2005, respectively, compared to the same
periods last year. Sales declines in the fourth quarter of fiscal 2005 were
primarily due to decreased sales volumes, lower average domestic sales prices
and one less week of sales. Sales increases for the 12 months of fiscal 2005
resulted primarily from higher average sales prices, both domestically and
internationally, as compared to the same period last year. The higher average
sales prices, driven primarily by higher average live hog prices, were
partially offset by a decrease in volumes, caused largely by one less week of
sales.
Operating income for the fourth quarter of fiscal 2005 increased
$8 million as compared to the same period last year, excluding $1 million of
charges related to fixed asset write-downs recorded in the fourth quarter of
fiscal 2004. The increase in operating income was primarily due to lower
average live hog prices.
Fiscal 2005 operating income decreased $63 million as compared to the
prior year, excluding current year costs of $33 million related to a legal
settlement involving the Company's live swine operations, $2 million received
in fiscal 2005 in connection with vitamin antitrust litigation and $1 million
of charges recorded in fiscal 2004 related to fixed asset write-downs. The
decrease in operating income was primarily due to higher average live hog
prices and lower volumes, which increased the operating cost per head and more
than offset the increase in average sales prices.
Prepared Foods (10.5% of Net Sales, 9.5% of Total Operating Income -
4th Quarter 2005)
(10.8% of Net Sales, 10.2% of Total Operating Income -
12 Months 2005)
* Higher average sales prices for the fiscal year were offset by
increased raw material prices.
Prepared Foods segment sales decreased 14.1% and 3.1% for the fourth
quarter and 12 months of fiscal 2005, respectively, compared to the same
periods last year. Fourth quarter fiscal 2005 sales declines were primarily
due to lower average sales prices, the rationalization of lower margin product
lines and decreased sales volumes, caused largely by one less week of sales.
Decreased sales volumes for the 12 months of fiscal 2005 were partially offset
by higher average sales prices.
Fiscal 2005 operating income decreased $2 million as compared to the prior
year, excluding plant closing related accruals of $2 million and $27 million
recorded in fiscal years 2005 and 2004, respectively, and excluding $27
million of fixed asset write-downs and intangible asset impairments recorded
in fiscal 2004. The decrease in the Prepared Foods segment's operating income
was primarily due to increased raw material prices.
TYSON FOODS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In millions, except per share data)
Three Months Ended 12 Months Ended
(Unaudited) (Unaudited) (Unaudited)
October 1, October 2, October 1, October 2,
2005 2004 2005 2004
Sales $6,495 $7,149 $26,014 $26,441
Cost of Sales 6,066 6,687 24,274 24,550
429 462 1,740 1,891
Selling, General
and Administrative 240 238 928 880
Other Charges (1) 46 47 86
Operating Income 190 178 765 925
Other Expenses:
Interest 55 67 227 275
Other 4 11 10 15
Income before
Income Taxes 131 100 528 635
Provision for
Income Taxes 33 34 175 232
Net Income $98 $66 $353 $403
Weighted Average
Shares Outstanding:
Class A Basic 243 243 243 243
Class B Basic 102 102 102 102
Diluted 358 357 357 357
Earnings Per Share:
Class A Basic $0.29 $0.20 $1.05 $1.20
Class B Basic $0.27 $0.18 $0.95 $1.08
Diluted $0.28 $0.19 $0.99 $1.13
Cash Dividends
Per Share:
Class A $0.040 $0.040 $0.160 $0.160
Class B $0.036 $0.036 $0.144 $0.144
Sales Growth (9.1)% 8.8% (1.6)% 7.7%
Margins: (Percent
of Sales)
Gross Profit 6.6% 6.5% 6.7% 7.2%
Operating Income 2.9% 2.5% 2.9% 3.5%
Net Income 1.5% 0.9% 1.4% 1.5%
Effective Tax Rate 24.8% 33.9% 33.1% 36.6%
TYSON FOODS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
(Unaudited)
October 1, October 2,
2005 2004
Assets
Current Assets:
Cash and cash equivalents $40 $33
Accounts receivable, net 1,214 1,240
Inventories 2,062 2,063
Other current assets 169 196
Total Current Assets 3,485 3,532
Net Property, Plant and Equipment 4,007 3,964
Goodwill 2,502 2,558
Other Assets 510 410
Total Assets $10,504 $10,464
Liabilities and Shareholders' Equity
Current Liabilities:
Current debt $126 $338
Trade accounts payable 961 945
Other current liabilities 1,070 1,010
Total Current Liabilities 2,157 2,293
Long-Term Debt 2,869 3,024
Deferred Income Taxes 657 695
Other Liabilities 169 160
Shareholders' Equity 4,652 4,292
Total Liabilities and Shareholders' Equity $10,504 $10,464
TYSON FOODS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In millions)
Three Months Ended 12 Months Ended
(Unaudited) (Unaudited) (Unaudited)
October 1, October 2, October 1, October 2,
2005 2004 2005 2004
Cash Flows From
Operating Activities:
Net income $98 $66 $353 $403
Depreciation and
amortization 124 131 501 490
Plant closing-related
charges (2) --- 10 28
Impairment and
write-down of assets 14 46 25 46
Deferred income
taxes and other (53) 23 (76) 12
Net changes in
working capital (103) (124) 186 (47)
Cash Provided by
Operating Activities 78 142 999 932
Cash Flows From
Investing Activities:
Additions to property,
plant and equipment (176) (140) (571) (486)
Proceeds from sale
of assets 24 7 47 27
Investment in
marketable securities 3 (10) (39) (99)
Net changes in other
assets and liabilities (14) (26) 2 (42)
Cash Used for
Investing Activities (163) (169) (561) (600)
Cash Flows From
Financing Activities:
Net change in debt 100 39 (367) (242)
Purchases of
treasury shares (9) (23) (45) (72)
Dividends (14) (14) (55) (55)
Stock options
exercised and other 8 6 24 43
Cash Provided by
(Used for) Financing
Activities 85 8 (443) (326)
Effect of Exchange Rate
Change on Cash 8 1 12 2
Increase (Decrease) in
Cash and Cash
Equivalents 8 (18) 7 8
Cash and Cash Equivalents
at Beginning of Period 32 51 33 25
Cash and Cash Equivalents
at End of Period $40 $33 $40 $33
Tyson Foods, Inc., founded in 1935 with headquarters in Springdale,
Arkansas, is the world's largest processor and marketer of chicken, beef and
pork and the second-largest food company in the Fortune 500. The company
produces a wide variety of protein-based and prepared food products, which are
marketed under the "Powered by Tyson(TM)" strategy. Tyson is the recognized
market leader in the retail and foodservice markets it serves, providing
products and service to customers throughout the United States and more than
80 countries. Tyson has approximately 114,000 Team Members employed at more
than 300 facilities and offices in the United States and around the world.
A conference call to discuss the Company's financial results will be held
at 9 a.m. Eastern today. To listen live via telephone, call 888-560-8501. A
pass code and the leader's name will be required to join the call. The pass
code is Tyson Foods and the leader's name is Ruth Ann Wisener. International
callers dial 415-228-4834. The call also will be webcast live on the Internet
at http://ir.tysonfoodsinc.com . Financial information, such as this news
release, as well as other supplemental data, including Company distribution
channel information, can be accessed from the Company's web site at
http://ir.tysonfoodsinc.com . A telephone replay will be available until
December 14 at 7:00 p.m. Eastern at 866-447-7319. International callers dial
203-369-1155.
Forward-Looking Statements
The Company and its representatives may from time to time make written or
oral forward-looking statements, including statements related to expected
earnings and results and future market conditions. These forward-looking
statements are subject to a number of factors and uncertainties which could
cause the Company's actual results and experiences to differ materially from
the anticipated results and expectations, expressed in such forward-looking
statements. The Company wishes 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 the
anticipated results and expectations expressed in such forward-looking
statements are the following: (i) fluctuations in the cost and availability of
raw materials, such as live cattle, live swine or feed grains; (ii) market
conditions for finished products, including the supply and pricing of
alternative proteins, and the demand for alternative proteins; (iii) risks
associated with effectively evaluating derivatives and hedging activities;
(iv) access to foreign markets together with foreign economic conditions,
including currency fluctuations and import/export restrictions; (v) outbreak
of a livestock disease (such as avian influenza or bovine spongiform
encephalopathy (BSE)) which could have an effect on livestock owned by the
Company, the availability of livestock for purchase by the Company, consumer
perception of certain protein products, or the Company's ability to access
certain markets; (vi) successful rationalization of existing facilities, and
the operating efficiencies of the facilities; (vii) changes in the
availability and relative costs of labor and contract growers; (viii) issues
related to food safety, including costs resulting from product recalls,
regulatory compliance and any related claims or litigation; (ix) adverse
results from litigation; (x) risks associated with leverage, including cost
increases due to rising interest rates or changes in debt ratings or outlook;
(xi) changes in regulations and laws (both domestic and foreign), including
changes in accounting standards, environmental laws and occupational, health
and safety laws; (xii) the ability of the Company to make effective
acquisitions, and successfully integrate newly acquired businesses into
existing operations; (xiii) effectiveness of advertising and marketing
programs; and (xiv) the effect of, or changes in, general economic conditions.
SOURCE Tyson Foods, Inc.
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Related links:
http://www.tyson.com
http://ir.tysonfoodsinc.com
CONTACT:
media, Gary Mickelson, +1-479-290-6111, or
investors, Ruth Ann Wisener, +1-479-290-4235, both of Tyson
Foods, Inc.
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