01—Abstract
Summary
Summary of the 10-K filed November 14, 2022. Cited figures are marked; the original filing is the authoritative source.
Tyson Foods, Inc. (NYSE: TSN) reported fiscal 2022 (52 weeks ended October 1, 2022) with sales of $53.28 billiona, up from $47.05 billion in fiscal 2021, driven mainly by higher average sales prices amid inflation.
Operating income was $4.41 billionb, roughly flat versus $4.40 billion in fiscal 2021, as Chicken results improved while Beef, Pork and Prepared Foods declined. Net income attributable to Tyson was $3.24 billion, or $8.92 per diluted share, compared with $3.05 billion, or $8.34 per diluted share, in fiscal 2021. Fiscal 2021 included a $626 million legal contingency charge and a $784 million gain on the sale of the pet treats business, so the year-over-year comparison is affected by these items.
The balance sheet shows $1.03 billionc of cash, $3.3 billion of total liquidity, total debt of $8.32 billion and a net debt to EBITDA ratio of 1.3x. The company reported $2.69 billion of operating cash flow and $1.89 billion of capital expenditures, leaving operating cash outflows from working capital changes. Management expects fiscal 2023 capital spending of about $2.5 billion and a net cash outflow from operating assets and liabilities.
The company also launched a restructuring program (the 2022 Program) with estimated cumulative pretax charges of $293 milliond, and a productivity program targeting $1 billion in savings by fiscal 2024, with more than $700 million realized in fiscal 2022. Key risks disclosed include Walmart's 17.7% share of fiscal 2022 sales, control by the Tyson Limited Partnership (about 71.15% of voting power), livestock disease, feed and commodity price volatility, and numerous antitrust and wage-rate lawsuits. A Mexican tax assessment of approximately $411 million is under appeal, with no liability recorded.
02—Key points
Key Highlights
- Sales rose to $53.28 billion in fiscal 2022 from $47.05 billion, with average sales price up 12.3% and sales volume down 0.3%.
- Net income attributable to Tyson was $3.24 billion, or $8.92 per diluted share, versus $8.34 in fiscal 2021.
- Chicken segment operating income improved to $955 million from a loss of $625 million, while Beef operating income fell to $2.50 billion from $3.24 billion.
- Operating income was $4.41 billion, essentially flat versus $4.40 billion, with 8.3% total operating margin.
- Cash provided by operating activities fell to $2.69 billion from $3.84 billion; capital spending rose to $1.89 billion.
- Total liquidity was $3.3 billion at October 1, 2022, with total debt of $8.32 billion and a net debt to EBITDA ratio of 1.3x.
- Annual dividend rate for Class A stock is expected to rise to $1.92 in fiscal 2023, a 4% increase over fiscal 2022.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Tyson Foods kept $0.06.
- Revenue$53.28B100.0%
- Cost of revenue−$46.61B87.5%
- Gross profit$6.67B12.5%
- Operating costs−$2.26B4.2%
- Operating income$4.41B8.3%
- Interest, other & tax−$1.17B2.2%
- Net income$3.24B6.1%
Where FY2022 revenue went
$53.28B- Cost of revenue: $46.61B, 87% of revenue
- Net income: $3.24B, 6.1% of revenue
- R&D: $108.0M, 0.2% of revenue
- SG&A: $2.26B, 4.2% of revenue
- Interest, other & tax: $1.17B, 2.2% of revenue
Kept 6.1% as net incomeNet income $3.24B · 6.1%R&D $108.0M · 0.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed November 14, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $53.28B$47.05B | +13.2% |
| Cost of Revenue | $46.61B$40.52B | +15.0% |
| Gross Profit | $6.67B$6.53B | +2.2% |
| R&D Expenses | $108.00M$114.00M | −5.3% |
| SG&A Expenses | $2.26B$2.13B | +6.0% |
| Operating Income | $4.41B$4.40B | +0.3% |
| Net Income | $3.24B$3.05B | +6.3% |
| EPS (Diluted) | $8.92$8.34 | +7.0% |
| Shares Outstanding (Diluted) | 363.00M365.00M | −0.5% |
05—Questions
Frequently Asked Questions
How did Tyson's profitability change in fiscal 2022?
Sales grew 13.2% to $53.28 billion, mainly from higher average sales prices in an inflationary environment. Operating income was $4.41 billion, slightly up from $4.40 billion, as Chicken improved but Beef, Pork and Prepared Foods declined. Fiscal 2021 included a $784 million gain on the pet treats sale and $626 million of legal contingency charges, which affect the comparison.
How concentrated is Tyson's customer base?
Walmart Inc. accounted for 17.7% of fiscal 2022 consolidated sales and was included in all segments. The filing states that an extended discontinuance of sales to Walmart could, if not replaced, have a material impact on operations. No other customer represented more than 10% of sales.
Who controls Tyson's voting power?
The Tyson Limited Partnership owns 99.985% of Class B stock, and the TLP together with Tyson family members holds 2.27% of Class A stock. Collectively they control approximately 71.15% of total voting power, which the filing notes can delay or prevent a change in control.
What are the main legal exposures disclosed?
The filing describes broiler antitrust civil litigation, a broiler chicken grower litigation, pork and beef antitrust litigation, and wage rate litigation. The legal contingency accrual for the broiler antitrust matter was $122 million at October 1, 2022. A Mexican tax assessment of approximately $411 million is being contested, and no liability has been recorded for it.
What capital allocation and cash plans did management outline?
Management expects fiscal 2023 capital spending of about $2.5 billion, net interest expense of about $320 million, and dividends that increase to $1.92 per Class A share. The company repurchased $587 million of stock under its program in fiscal 2022 and had 12.0 million shares remaining for repurchase at October 1, 2022.
06—Continue