Tyson Foods, Inc. (NYSE: TSN) yesterday reported $0.09 diluted earnings per share for the third fiscal quarter ended June 30, 2001, compared to $0.18 diluted earnings per share in the same quarter last year.

Third quarter sales were $1.89 billion compared to $1.81 billion last year, an increase of 4.8 percent with a 1.8 percent increase in volume. Gross profits for the third quarter were $279.6 million compared to $268.8 million in the same quarter last year with gross margin at 14.8 percent compared to 14.9 percent last year. Earnings for the third quarter of fiscal 2001 were $19.4 million compared to $40.5 million for the same period last year.

Sales for the nine months of fiscal 2001 were $5.46 billion compared to $5.38 billion last year, an increase of 1.6 percent. Gross profits for the nine months were $756.7 million compared to $879.2 million in the same period last year with gross margin at 13.8 percent compared to 16.4 percent last year. Earnings for the nine months of fiscal 2001 were $40.3 million compared to $133.2 million for the same period last year. Diluted earnings per share for the nine months of fiscal 2001 were $0.18 compared to $0.59 last year.

John Tyson, chairman, president, and CEO, said, “While our performance was at the high end of our previous guidance, we clearly did not perform to our potential. Our focus is on improving our operational execution and expense management to more fully benefit from our improving sales mix. We simply have to get more money to the bottom line.”

The Company presently identifies segments based on the products offered and the nature of customers. This results in the following reported business segments: Food Service, Consumer Products, International, Swine and Other. The Company measures segment profit as gross profit less selling expenses. Information on segments is as follows (in millions):

    Third Quarter Segment Review

Sales by Segment Segment Profit

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Three Months Ended Three Months Ended

June 30, July 1, June 30, July 1,
2001 2000 2001 2000

Food Service $853.6 $836.8 $ 42.6 $48.9
Consumer Products 579.7 580.0 22.2 31.7
International 219.9 141.9 15.4 (1.0)
Swine 32.4 47.9 1.9 9.6
Other 208.4 200.5 35.3 40.7
Total $1,894.0 $1,807.1 $117.4 $129.9

Food Service third quarter sales increased 2.0 percent compared to the same period last year, with an 8.1 percent increase in average sales prices primarily due to a change in product mix partially offset by a 5.6 percent decrease in volume. Segment profit for Food Service decreased $6.3 million from the same period last year primarily due to increased sales promotional expenditures.

Consumer Products third quarter sales were comparable to the same period last year, with a 0.7 percent increase in average sales prices offset by a 0.7 percent decrease in volume. Segment profit for Consumer Products decreased $9.5 million from the same period last year primarily due to product mix changes.

International third quarter sales increased 55.0 percent compared to the same period last year, with a 37.1 percent increase in average sales prices and a 13.1 percent increase in volume. Both the increase in average sales prices and volume were primarily due to bulk leg quarters as well as the outbreak of Exotic Newcastle disease in the third quarter of last year at Tyson de Mexico, which reduced sales and volume compared to the current year. The majority of the $16.4 million increase in the segment profit was due to the improvement at Tyson de Mexico.

Swine third quarter sales decreased 32.4 percent from the same period last year, with an 18.5 percent decrease in volume and a 17.1 percent decrease in average sales prices. The decrease in volume is primarily due to the sale in the second quarter of fiscal 2001 of the North Carolina swine operations and decreased head marketed. Segment profit for Swine decreased $7.7 million from the same period last year.

Other third quarter sales increased 3.9 percent over the same period last year primarily due to an increase in Prepared Foods sales. Other consists primarily of the Specialty Products group, the Prepared Foods group, the chicken breeding stock subsidiary and other corporate operating activities.

    Nine Months Segment Review

Sales by Segment Segment Profit

Nine Months Ended Nine Months Ended

June 30, July 1, June 30, July 1,
2001 2000 2001 2000

Food Service $2,475.5 $2,474.7 $97.4 $168.4
Consumer Products 1,690.5 1,680.4 74.3 124.1
International 589.0 500.6 17.5 43.1
Swine 110.0 118.3 3.8 15.1
Other 599.8 602.6 121.7 102.7
Total $5,464.8 $5,376.6 $314.7 $453.4

Food Service nine months sales were comparable to the same period last year, with a 7.7 percent increase in average sales prices offset by a 7.1 percent decrease in volume primarily due to a change in product mix. Segment profit for Food Service decreased $71.0 million from the same period last year primarily due to increased production costs and sales promotional expenditures.

Consumer Products nine months sales increased 0.6 percent compared to the same period last year, with a 0.6 percent increase in volume and a slight increase in average sales prices. Segment profit for Consumer Products decreased $49.8 million from the same period last year primarily due to increased production costs and product mix changes as well as operating inefficiencies and inventory losses related to the previously announced product recall.

International nine months sales increased 17.7 percent compared to the same period last year, with a 15.0 percent increase in average sales prices and a 2.3 percent increase in volume. Both the increase in average sales prices and volume were primarily due to bulk leg quarters and Tyson de Mexico. Segment profit for International decreased $25.6 million from the same period last year.

Swine nine months sales decreased 7.0 percent over the same period last year, with a 2.7 percent decrease in average sales prices and a 4.4 percent decrease in volume. The decrease in volume is primarily due to the sale in the second quarter of fiscal 2001 of the North Carolina swine operations and decreased head marketed. Segment profit for Swine decreased $11.3 million from the same period last year.

Other nine months sales decreased 0.5 percent from the same period last year. Other consists primarily of the Specialty Products group, the Prepared Foods group, the chicken breeding stock subsidiary and other corporate operating activities.

                            CONSOLIDATED CONDENSED
STATEMENTS OF INCOME
(In millions except per share data)
(Unaudited)

Three Months Ended Nine Months Ended
June 30, July 1, June 30, July 1,
2001 2000 2001 2000

Sales $1,894.0 $1,807.1 $5,464.8 $5,376.6
Cost of Sales 1,614.4 1,538.3 4,708.1 4,497.4
Gross Profit 279.6 268.8 756.7 879.2
Operating Expenses:
Selling 162.2 138.9 442.0 425.8
General and
administrative 51.6 33.7 140.9 125.9
Amortization 8.4 8.4 25.3 25.5
Operating Income 57.4 87.8 148.5 302.0
Other Expense (Income):
Interest 25.8 28.8 81.1 87.3
Foreign currency
exchange (1.4) 1.8 (0.5) 1.6
Other 0.1 2.8 4.2 5.5
Income Before Income Taxes
and Minority Interest 32.9 54.4 63.7 207.6
Provision for
Income Taxes 11.6 19.6 22.3 74.2
Minority Interest 1.9 (5.7) 1.1 0.2
Net Income $19.4 $40.5 $40.3 $ 133.2

Diluted Earnings Per
Share $0.09 $0.18 $0.18 $ 0.59
Diluted Average Shares
Outstanding 221.7 225.0 222.3 226.4
Dividends Per Share:
Class A $0.040 $0.040 $0.1200 $0.1200
Class B $0.036 $0.036 $0.1080 $0.1080

Sales Growth (Decline) 4.8% (3.9%) 1.6% (3.1%)
Margins: (Percent of Sales)
Gross Profit 14.8% 14.9% 13.8% 16.4%
Operating Income 3.0% 4.9% 2.7% 5.6%
Income Before Income Taxes
and Minority Interest 1.7% 3.0% 1.2% 3.9%
Net Income 1.0% 2.2% 0.7% 2.5%

Effective Tax Rate 35.3% 36.0% 35.0% 35.7%

CONSOLIDATED CONDENSED
BALANCE SHEETS
(In millions except per share amounts)
(Unaudited)

Assets June 30, 2001 September 30, 2000
Current Assets:
Cash and cash equivalents $ 71.2 $42.9
Accounts receivable, net of allowance 527.8 508.0
Inventories 972.4 965.1
Other current assets 48.9 47.3
Total Current Assets 1,620.3 1,563.3
Net Property, Plant and Equipment 2,127.7 2,140.9
Excess of Investments over
Net Assets Acquired 930.2 936.8
Investments and Other Assets 311.2 200.0
Total Assets $4,989.4 $4,841.0

Liabilities and Shareholders’ Equity
Current Liabilities:
Notes payable $29.5 $61.6
Current portion of long-term debt 16.4 122.7
Trade accounts payable 331.4 333.3
Accrued compensation and benefits 144.1 106.3
Other accrued liabilities 263.1 248.9
Total Current Liabilities 784.5 872.8
Long-Term Debt 1,614.0 1,356.8
Deferred Income Taxes 367.8 384.8
Other Liabilities 78.6 51.1
Shareholders’ Equity:
Common stock ($.10 par value)
Class A-authorized 900 million shares:
Issued 138 million shares at 6-30-01
and 9-30-00 13.8 13.8
Class B-authorized 900 million shares:
Issued 103 million shares at 6-30-01
and 9-30-00 10.3 10.3
Capital in excess of par value 734.8 734.6
Retained earnings 1,730.5 1,715.7
Accumulated other comprehensive loss (8.2) (4.7)
2,481.2 2,469.7
Less treasury stock, at cost — 20 million
shares at 6-30-01 and 16 million shares
at 9-30-00 330.3 284.5
Less unamortized deferred compensation 6.4 9.7
Total Shareholders’ Equity 2,144.5 2,175.5

Total Liabilities and Shareholders’ Equity $4,989.4 $4,841.0

CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS

For the Periods Ended
(In millions)
(Unaudited)

Three Months Ended Nine Months Ended
June 30, July 1, June 30, July 1,
2001 2000 2001 2000
Cash Flows from Operating Activities:
Net income $19.4 $40.5 $40.3 $133.2
Adjustments to reconcile
net income to cash
Provided by operating
activities:
Depreciation 66.0 65.4 196.8 192.1
Amortization 8.4 8.4 25.3 25.5
Provision for doubtful
accounts (1.4) (4.2) (0.7) 24.2
Minority interest 1.9 (5.7) 1.1 0.2
Deferred income taxes (8.8) 51.0 (24.7) 32.6
Other (1.5) 2.2 5.6 5.0
Net changes in
working capital 19.8 (18.3) 31.7 25.4
Cash Provided by
Operating Activities 103.8 139.3 275.4 438.2
Cash Flows from
Investing Activities:
Additions to property,
plant and equipment (50.7) (47.0) (157.5) (141.3)
Proceeds from
disposition of assets 3.2 1.3 27.5 3.0
Acquisitions of property,
plant and equipment (33.0) (13.9) (33.0) (13.9)
Investment in IBP,
inc. stock and
note receivable — — (79.4) —
Purchase of Tyson de
Mexico minority
interest (14.5) — (14.5) —
Net changes in investment
in commercial paper (32.6) (1.7) (9.4) (0.9)
Net changes in other
assets and other
liabilities (20.4) (1.5) (26.5) (6.4)
Cash Used for
Investing Activities (148.0) (62.8) (292.8) (159.5)
Cash Flows from
Financing Activities:
Net changes in notes
payable (52.3) 4.4 (32.1) (39.5)
Proceeds from long-term
debt 178.0 7.3 287.2 150.3
Repayments of long-term
debt (66.8) (75.5) (135.8) (307.8)
Purchases of treasury
shares (16.5) (11.9) (45.6) (62.4)
Dividends (8.5) (8.5) (25.5) (25.9)
Other 0.9 — (0.1) 1.0
Cash Provided by
(Used for) Financing
Activities 34.8 (84.2) 48.1 (284.3)
Effect of Exchange Rate
Change on Cash (2.9) (0.7) (2.4) (1.8)
Increase (Decrease)
in Cash and Cash
Equivalents (12.3) (8.4) 28.3 (7.4)
Cash and Cash
Equivalents at
Beginning of Period 83.5 31.3 42.9 30.3
Cash and Cash Equivalents
at End of Period $71.2 $22.9 $71.2 $22.9

Tyson is a party to a definitive merger agreement with IBP, inc. For more information, please refer to Tyson’s Schedule TO, as amended, filed with the Securities and Exchange Commission.

Tyson Foods, Inc., headquartered in Springdale, Arkansas, is the world’s largest fully integrated producer, processor and marketer of chicken and chicken-based convenience foods, with 68,000 team members and 7,000 family farmers in more than 100 communities. Tyson has operations in 18 states and 16 countries and exports to 79 countries worldwide. Tyson is the recognized market leader in almost every retail and foodservice market it serves. Tyson’s Cobb-Vantress subsidiary is a leading chicken breeding stock supplier. In addition, Tyson is the nation’s third largest maker of corn and flour tortillas under the Mexican Original® brand, as well as a leading provider of live swine.

Forward-Looking Statements

Certain statements contained in this communication are “forward-looking statements.” These forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Among the factors that may cause actual results to differ materially from those expressed in, or implied by, the statements are the following: (i) fluctuations in the cost and availability of raw materials, such as feed grain costs; (ii) changes in the availability and relative costs of labor and contract growers; (iii) market conditions for finished products, including the supply and pricing of alternative proteins; (iv) effectiveness of advertising and marketing programs; (v) the ability of the Company to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; (vi) risks associated with leverage, including cost increases due to rising interest rates; (vii) risks associated with effectively evaluating derivatives and hedging activities; (viii) changes in regulations and laws, including changes in accounting standards, environmental laws, occupational, health and safety laws; (ix) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation; (x) adverse results from ongoing litigation; (xi) access to foreign markets together with foreign economic conditions, including currency fluctuations; and (xii) the effect of, or changes in, general economic conditions. The Company wishes to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. Tyson undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Financial information, such as this news release, as well as other historical data and current Company information, can now be accessed from the Company’s web site on the internet at http://www.tyson.com.







To view related research reports, please follow the links below:-


The 2000-2005 World Outlook for Poultry


Meat and Poultry in the USA


The 2000-2005 World Outlook for Poultry Slaughtering and Processing