01—Abstract
Summary
Summary of the 10-K filed November 18, 2013. Cited figures are marked; the original filing is the authoritative source.
Tyson Foods, Inc. reported fiscal 2013 (year ended September 28, 2013) as one of the world's largest meat protein companies and the second-largest food production company in the Fortune 500.
Sales rose to a record $34.4 billiona, up from $33.1 billion in fiscal 2012, driven mainly by higher average sales prices, while sales volume declined slightly. Operating income increased to $1.375 billion from $1.286 billion, led by record earnings in the Chicken segment ($646 million operating income, a 5.3% margin), while Beef ($296 million, 2.1%), Pork ($332 million, 6.1%) and Prepared Foods ($101 million, 3.0%) results varied. Net income attributable to Tyson was $778 million, or $2.12 per diluted share, compared with $583 million, or $1.58 per diluted share, in fiscal 2012.
Cash provided by operating activities was $1.314 billionb. Balance sheet and capital allocation items were also notable. Total debt was $2.408 billion, total liquidity was $2.1 billion, and the company repurchased 21.1 million shares under its program for $550 million during the year.
The Board raised the quarterly dividend to $0.075c per Class A share in November 2013. Fiscal 2014 outlook calls for sales of approximately $36 billion, capital expenditures of about $700 million, and expected lower feed costs of roughly $500 million in the Chicken segment. Investors should also weigh the risks disclosed in the filing.
Tyson Limited Partnership controls approximately 72.46% of total voting power, Wal-Mart Stores, Inc. accounted for 13.0% of consolidated sales, and the company faces ongoing wage-and-hour litigation, a pending Oklahoma environmental suit seeking compensatory damages in excess of $800 milliond, and a Department of Justice Clean Water Act complaint. Goodwill of $1.9 billion represents approximately 16% of total assets.
02—Key points
Key Highlights
- Record sales of $34.4 billion, up from $33.1 billion, with growth driven primarily by average sales price increases of 4.6% while sales volume decreased 0.2%.
- Operating income rose to $1.375 billion from $1.286 billion, with the Chicken segment delivering record operating income of $646 million at a 5.3% operating margin.
- Net income attributable to Tyson was $778 million, or $2.12 per diluted share, versus $583 million, or $1.58 per diluted share, in fiscal 2012.
- Beef segment operating margin was 2.1% and Prepared Foods fell to $101 million (3.0% margin) due to higher raw material and input costs.
- Cash flow from operations was $1.314 billion; the company repurchased 21.1 million Class A shares for $550 million under its repurchase program.
- Fiscal 2014 outlook projects sales of approximately $36 billion, capital expenditures near $700 million, and net interest expense of about $100 million.
- Tyson Limited Partnership controls approximately 72.46% of total voting power, and Wal-Mart Stores, Inc. accounted for 13.0% of fiscal 2013 consolidated sales.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Tyson Foods kept $0.02.
- Revenue$34.37B100.0%
- Cost of revenue−$32.02B93.1%
- Gross profit$2.36B6.9%
- Operating costs−$983.0M2.9%
- Operating income$1.38B4.0%
- Interest, other & tax−$597.0M1.7%
- Net income$778.0M2.3%
Where FY2013 revenue went
$34.37B- Cost of revenue: $32.02B, 93% of revenue
- Net income: $778.0M, 2.3% of revenue
- R&D: $50.0M, 0.1% of revenue
- SG&A: $983.0M, 2.9% of revenue
- Interest, other & tax: $597.0M, 1.7% of revenue
Kept 2.3% as net incomeNet income $778.0M · 2.3%R&D $50.0M · 0.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed November 18, 2013Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $34.37B$33.05B | +4.0% |
| Cost of Revenue | $32.02B$30.86B | +3.7% |
| Gross Profit | $2.36B$2.19B | +7.7% |
| R&D Expenses | $50.00M$43.00M | +16.3% |
| SG&A Expenses | $983.00M$904.00M | +8.7% |
| Operating Income | $1.38B$1.29B | +6.9% |
| Net Income | $778.00M$583.00M | +33.4% |
| EPS (Diluted) | $2.12$1.58 | +34.2% |
| Shares Outstanding (Diluted) | 367.00M370.00M | −0.8% |
05—Questions
Frequently Asked Questions
How did Tyson Foods perform financially in fiscal 2013?
Sales increased to a record $34.374 billion from $33.055 billion, and operating income rose to $1.375 billion from $1.286 billion. Net income attributable to Tyson was $778 million, or $2.12 per diluted share, compared with $583 million, or $1.58 per diluted share, in fiscal 2012.
Which segments drove results in fiscal 2013?
The Chicken segment delivered record results, with sales of $12.296 billion and operating income of $646 million, up from $484 million. The Beef segment's operating income rose to $296 million, while the Pork segment declined to $332 million from $417 million and Prepared Foods declined to $101 million from $181 million.
What are the main risks identified in the filing?
Key risks include fluctuations in feed grain, live cattle and live swine costs, livestock disease outbreaks, dependence on Wal-Mart Stores, Inc. (13.0% of sales), concentration of voting control with Tyson Limited Partnership, goodwill impairment risk, and litigation including wage-and-hour actions and a Oklahoma Illinois River Watershed suit seeking compensatory damages in excess of $800 million.
What is the company's capital return and debt position?
The company repurchased 21.1 million Class A shares for $550 million under its program and paid dividends, and the quarterly dividend was increased to $0.075 per Class A share. Total debt was $2.408 billion at September 28, 2013, and total liquidity was $2.1 billion, which included $1.145 billion of cash and cash equivalents.
What does management expect for fiscal 2014?
Management expects fiscal 2014 sales of approximately $36 billion, capital expenditures of about $700 million, and net interest expense of approximately $100 million. The Chicken segment is expected to be in or above its normalized operating margin range of 5.0%-7.0%, and lower feed costs of approximately $500 million are anticipated.
06—Continue