01—Abstract
Summary
Summary of the 10-K filed November 13, 2023. Cited figures are marked; the original filing is the authoritative source.
Tyson Foods, Inc. reported a fiscal 2023 net loss attributable to Tyson of $648 milliona, or $(1.87) per diluted share, compared with net income of $3,238 million in fiscal 2022.
Sales decreased slightly to $52,881 millionb from $53,282 million, while the company recorded an operating loss of $395 million versus operating income of $4,410 million the prior year. The results were driven largely by a $781 million goodwill impairment charge, $322 million of plant closure charges, $156 million of legal contingency accruals, and $124 million of restructuring and related charges, along with lower operating income in every segment except Prepared Foods. Segment operating results were Beef $(91) million, Pork $(139) million, Chicken $(770) million, and Prepared Foods $823 million.
Balance sheet and liquidity metrics weakened during the year. Cash and cash equivalents fell to $573 millionc from $1,031 million, current debt rose to $1,895 million, and the net debt to EBITDA ratio increased to 9.1x from 1.3x. The company stated it had $3.0 billion of liquidity at September 30, 2023, and that it was in compliance with all debt covenants.
Cash provided by operating activities declined to $1,752 milliond from $2,687 million, and capital expenditures were $1,939 million. The company expects fiscal 2024 capital expenditures between $1 billion and $1.5 billion and net interest expense of approximately $400 million.
For shareholders, the Board increased the quarterly dividend to $0.49 per Class A share effective November 10, 2023, and the company noted it has paid uninterrupted quarterly dividends since 1977. The filing also discloses ongoing antitrust and wage-related litigation, including an Oklahoma environmental case where the parties were unable to reach a resolution at mediation, and a $488 million Mexican tax assessment that the company believes has no merit and for which it has not recorded a liability.
02—Key points
Key Highlights
- Net loss attributable to Tyson of $648 million, or $(1.87) per diluted share, versus net income of $3,238 million in fiscal 2022.
- Sales of $52.9 billion, down slightly from $53.3 billion; operating loss of $395 million versus operating income of $4.41 billion in fiscal 2022.
- Goodwill impairment charges totaled $781 million, including $333 million in the Beef segment, and plant closure charges of $322 million were recorded for six Chicken facilities.
- Segment operating income: Prepared Foods $823 million; Beef $(91) million; Pork $(139) million; Chicken $(770) million.
- Net debt to EBITDA rose to 9.1x from 1.3x; cash fell to $573 million and current debt rose to $1,895 million, with $3.0 billion of liquidity at September 30, 2023.
- Walmart Inc. accounted for 18.6% of fiscal 2023 consolidated sales.
- Quarterly Class A dividend increased to $0.49 per share effective November 10, 2023; fiscal 2024 annual Class A dividend rate expected to be $1.96.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2023, Tyson Foods lost $0.01.
- Revenue$52.88B100.0%
- Cost of revenue−$50.25B95.0%
- Gross profit$2.63B5.0%
- Operating costs−$3.03B5.7%
- Operating income−$395.0M0.7%
- Interest, other & tax−$253.0M0.5%
- Net income−$648.0M1.2%
04—Financials
Financial Highlights
Figures from 10-KFY2023filed November 13, 2023Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $52.88B$53.28B | −0.8% |
| Cost of Revenue | $50.25B$46.61B | +7.8% |
| Gross Profit | $2.63B$6.67B | −60.5% |
| R&D Expenses | $114.00M$108.00M | +5.6% |
| SG&A Expenses | $2.25B$2.26B | −0.6% |
| Operating Income | -$395.00M$4.41B | −109.0% |
| Net Income | -$648.00M$3.24B | −120.0% |
| EPS (Diluted) | $-1.87$8.92 | −121.0% |
| Shares Outstanding (Diluted) | 284.00M363.00M | −21.8% |
05—Questions
Frequently Asked Questions
Why did Tyson report a net loss in fiscal 2023?
The filing attributes the loss mainly to a $781 million goodwill impairment, $322 million of plant closure charges, $156 million of legal contingency accruals, and $124 million of restructuring and related charges. Lower operating results in the Beef, Pork and Chicken segments, driven by lower cattle supplies, compressed pork margins and excess domestic chicken supply, also contributed.
How much liquidity does Tyson have and how is its debt structured?
At September 30, 2023, Tyson reported total liquidity of $2,996 million, including cash, short-term investments and availability under its revolving and term loan facilities, net of commercial paper. Total debt was $9,506 million, and most borrowings carry fixed interest rates, according to the filing. The company stated it expects to pay its $1,895 million of current debt with operating cash flow and other liquidity sources.
What is the outlook for capital spending and interest expense in fiscal 2024?
The company expects capital expenditures between $1 billion and $1.5 billion for fiscal 2024 and net interest expense of approximately $400 million. It also expects the remaining fiscal 2024 quarterly dividends to be $0.49 per Class A share and $0.441 per Class B share.
What major legal and tax matters does the filing disclose?
The filing describes Broiler Antitrust Civil Litigation, Broiler Chicken Grower Litigation, Pork and Beef Antitrust Litigation, and Wage Rate Litigation, with accruals recorded for certain matters. It also discloses an Oklahoma environmental lawsuit in which mediation on October 12, 2023 did not produce a resolution, and a Mexican tax assessment of approximately $488 million, for which the company has recorded no liability because it believes the assessment has no merit.
Who controls Tyson's voting power?
The Tyson Limited Partnership and members of the Tyson family together control approximately 71.74% of the total voting power of the company's outstanding voting stock, as of September 30, 2023. Holders of Class B stock are entitled to 10 votes per share, and the company qualifies as a controlled company under New York Stock Exchange rules.
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