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Tyson Foods Annual Report, Year Ended Sep 27, 2003

Filing Date
Filed December 16, 2003
Period End
September 27, 2003
Security
TSN
In the record · 2016–202610-K1110-Q338-K142

TSN filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 142 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Jun ’17Jun ’17
  2. Leadership change8-K · May ’19May ’19
  3. Material agreement8-K · Oct ’21Oct ’21
  4. FY2025 annual report10-K · Nov ’25Nov ’25

01—Abstract

Summary

Summary of the 10-K filed December 16, 2003. Cited figures are marked; the original filing is the authoritative source.

Tyson Foods, Inc. (Class A stock traded on the NYSE as "TSN") reported fiscal 2003 sales of $24.549 billiona, up $1.2 billion or 5.1% from $23.367 billion in fiscal 2002, with a slight volume increase and a 5.0% increase in price.

Net income was $337 millionb, or $0.96 per diluted share, compared with $383 million, or $1.08 per diluted share, in fiscal 2002. Pretax earnings included $167 million received from vitamin antitrust litigation settlements and $76 million of costs tied to closing poultry operations. Operating income fell to $837 million from $887 million, mainly because of higher live cattle prices in Beef, higher grain costs in Chicken, and plant closing costs.

Chicken operating income dropped $270 millionc, while Beef operating income rose $100 million. Cash provided by operations declined to $820 million from $1.174 billion, driven by a $423 million net change in working capital. Total debt decreased to $3.604 billion from $3.987 billion, and shareholders' equity rose to $3.954 billion from $3.662 billion.

The company reported $1.5 billiond in borrowing capacity at year-end and expects fiscal 2004 capital spending of $450 to $500 million. It also announced facility closures in Manchester, New Hampshire, and Augusta, Maine, with pretax charges of approximately $23 to $27 million expected in the first half of fiscal 2004.

The filing also discloses legal exposures, including a Department of Labor wage-and-hour complaint, several wage-and-hour class actions, and a cattle producer class action against IBP, Inc. in which plaintiffs' expert calculated class damages exceeding $2.1 billion (exclusive of pre-judgment interest). Management believes IBP's cattle purchasing practices are lawful and that the company's accruals are adequate, but says an adverse outcome could have a material effect on results.

02—Key points

Key Highlights

  1. Fiscal 2003 sales rose 5.1% to $24.549 billion, with a 5.0% increase in average price and a slight increase in volume.
  2. Net income declined to $337 million ($0.96 diluted EPS) from $383 million ($1.08 diluted EPS) in fiscal 2002.
  3. Pretax results included $167 million of vitamin antitrust litigation settlement gains and $76 million of poultry plant closing costs.
  4. Chicken segment operating income fell $270 million to $158 million on higher grain costs and plant closing costs; Beef operating income rose $100 million to $320 million.
  5. Operating cash flow fell to $820 million from $1.174 billion, mainly due to a $423 million net change in working capital.
  6. Total debt declined to $3.604 billion from $3.987 billion, and shareholders' equity increased to $3.954 billion.
  7. Management expects fiscal 2004 capital spending of $450 to $500 million and anticipates $23 to $27 million in pretax charges from the Manchester, NH and Augusta, ME plant closings.

03—Questions

Frequently Asked Questions

  1. How did Tyson Foods perform in fiscal 2003 compared with fiscal 2002?

    Sales increased 5.1% to $24.549 billion, but net income fell to $337 million ($0.96 per diluted share) from $383 million ($1.08 per diluted share). Operating income declined to $837 million from $887 million.

  2. What drove the change in segment results?

    Beef operating income increased $100 million to $320 million on strong demand in the second half of fiscal 2003, partly tied to the U.S. ban on Canadian beef, though higher live cattle prices partly offset this. Chicken operating income fell $270 million to $158 million, primarily due to increased grain costs and plant closing costs. Prepared Foods operating income fell $101 million to $57 million.

  3. How much did the vitamin antitrust settlements affect results?

    The company received $167 million in fiscal 2003 from vitamin antitrust litigation settlements, recorded as income only upon receipt, compared with $30 million in fiscal 2002. Additional, much smaller settlements were anticipated in fiscal 2004.

  4. What are the main legal risks disclosed?

    The filing describes wage-and-hour class and collective actions, a Department of Labor FLSA complaint, and a cattle producer class action against IBP, Inc. in which plaintiffs' expert calculated class damages exceeding $2.1 billion exclusive of pre-judgment interest. Management believes the claims are defensible and that accruals are adequate, but an adverse outcome could have a material effect on results.

  5. What is the company's financial position and outlook?

    Total debt fell to $3.604 billion from $3.987 billion, and the company had $1.5 billion of borrowing capacity at September 27, 2003. Management expects fiscal 2004 capital spending of $450 to $500 million and believes foreseeable cash needs will be met through operating cash flows.

04—Continue

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