First Quarter 1998
Operating Results
January 26, 1998
Mary Rush
TYSON FOODS, INC. REPORTS FIRST QUARTER RESULTS
Springdale, Arkansas--Tyson Foods, Inc. (NYSE:TSN), today announced
operating results for the first quarter of fiscal year 1998 for the period
ended December 27, 1997.
Earnings per share for the first quarter of fiscal 1998 were $.21 compared
to $.20, up 5.0 percent from the same period last year. Gross profits
increased 5.0 percent to $260.7 million from last year's $248.4 million and
gross margin increased 80 basis points to 17.1 percent from last year's
16.3 percent.
Sales for the first quarter of fiscal 1998 were $1.52 billion compared to
$1.53 billion last year, a decrease of 0.5 percent. The decrease in sales
is mainly due to a 4.6% decrease in average sales prices mostly offset by a
4.3% increase in total volume. Included in general and administrative
expense is a charge of $6 million for penalties and costs associated with
the January 12, 1998 settlement with the Office of Independent Counsel in
connection with the former Secretary of Agriculture Michael Espy
investigation.
"We are encouraged by the continued improvements on the cost side of our
business, particularly with the decline in feed prices," Tollett added.
"There will continue to be challenges in the marketplace, at least through
our second quarter, due to an abundant supply of all meat proteins. We also
anticipate continued soft pricing in the international markets in the near
term, but remain optimistic about the balance of fiscal year 1998."
Tyson completed the merger with Hudson Foods on January 9, 1998, and is in
the process of integrating the two companies. "The transition is
progressing as expected; however, as with any acquisition, there are some
areas that will need more attention than others. We expect the assimilation
to command most of our attention for the remainder of the year. Our
challenge and our goal is to manage this process in a manner that will
allow us to quickly capitalize on the synergistic opportunities offered by
the combined companies," Tollett said.
Tyson Foods, Inc. is the world's largest fully-integrated producer,
processor and marketer of chicken and poultry-based food products.
TYSON FOODS, INC.
News Release January 26,1998
Page 2 of 4
The unaudited results are as follows:
(In millions except per share data)
Three Months Ended December 27, 1997 December 28,1996
Sales $1,520.8 $1,527.9
Cost of Sales 1,260.1 1,279.5
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Gross Profit 260.7 248.4
Expenses:
Selling 125.6 125.1
General and Administrative 31.3 23.5
Amortization 5.9 6.8
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Operating Income 97.9 93.0
Other Expense (Income):
Interest 27.2 28.9
Other (0.6) (41.5)
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Income Before Taxes on Income 71.3 105.6
Provision for Income Taxes 26.4 61.0
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Net Income $ 44.9 $ 44.6
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Diluted Earnings Per Share $0.21 $0.20
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Diluted Average Shares Outstanding 215.0 219.4
Dividends Per Share: Class A $0.0250 $0.020
Class B $0.0225 $0.018
________________________________________________________________________
Sales Growth (Decline) (0.5%) (1.2%)
Margins: (Percent of Sales)
Gross Profit 17.1% 16.3%
Operating Income 6.4% 6.1%
Income Before Taxes on Income 4.7% 6.9%
Net Income 3.0% 2.9%
________________________________________________________________________
TYSON FOODS, INC.
News Release CONSOLIDATED CONDENSED
January 26, 1998 BALANCE SHEETS
Page 3 of 4 (In millions except per share amounts)
Assets December 27, 1997 September 27, 1997
Current Assets:
Cash and cash equivalents $ 24.2 $ 23.6
Accounts receivable 589.7 617.8
Inventories 914.5 886.1
Assets held for sale 6.2 6.2
Other current assets 30.7 38.8
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Total Current Assets 1,565.3 1,572.5
Net Property, Plant and Equipment 1,920.5 1,924.8
Excess of Investments over Net
Assets Acquired 725.3 731.1
Investments and Other Assets 193.1 182.6
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Total Assets $4,404.2 $4,411.0
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Liabilities and Shareholders' Equity
Current Liabilities:
Notes payable $ 138.8 $ 37.3
Current portion of long-term debt 60.3 94.6
Trade accounts payable 269.0 290.3
Other accrued liabilities 280.8 298.8
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Total Current Liabilities 748.9 721.0
Long-Term Debt 1,491.7 1,558.2
Deferred Income Taxes 502.7 506.1
Other Liabilities 4.2 4.2
Shareholders' Equity:
Common stock ($.10 par value)
Class A-authorized 900 million shares:
Issued 119.5 million shares at
12-27-97 and 9-27-97 11.9 11.9
Class B-authorized 900 million shares:
Issued 102.7 million shares at
12-27-97 and 9-27-97 10.3 10.3
Capital in excess of par value 379.1 379.1
Retained earnings 1,430.6 1,390.8
Currency translation adjustment (2.2) (2.5)
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1,829.7 1,789.6
Less class A treasury stock, at cost-
9.0 million shares at 12-27-97
and 8.8 million shares at 9-27-97 170.6 165.6
Less unamortized deferred compensation 2.4 2.5
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Total Shareholders' Equity 1,656.7 1,621.5
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Total Liabilities and Shareholders'
Equity $4,404.2 $4,411.0
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TYSON FOODS, INC. CONSOLIDATED CONDENSED
News Release STATEMENTS OF CASH FLOWS
January 26, 1998 For the Three Months Ended
Page 4 of 4 (In millions)
December 27, 1997 December 28, 1996
Cash Flows from Operating Activities:
Net Income $ 44.9 $ 44.6
Adjustments to Reconcile Net Income
to Cash Provided by Operating Activities:
Depreciation 51.7 51.1
Amortization 5.9 6.8
Deferred Income Taxes (3.4) (0.1)
(Gain) Loss on Dispositions of Assets 0.6 (41.4)
Decrease in accounts receivable 28.1 52.0
(Increase) decrease in inventories (28.4) 38.9
(Decrease) in trade accounts payable (21.3) (33.1)
Net change in other current assets
And other current liabilities (9.9) 63.8
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Cash Provided by Operating Activities 68.2 182.6
Cash Flows from Investing Activities:
Additions to Property, Plant and
Equipment (50.3) (44.6)
Proceeds from the sale of property,
Plant and equipment 2.4 186.5
Net change in other assets and
Liabilities (10.6) (5.5)
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Cash Used for Investing Activities (58.5) 136.4
Cash Flows from Financing Activities:
Net change in notes payable 101.5 (34.3)
Proceeds from long-term debt 20.4 19.4
Repayments of long-term debt (121.2) (221.1)
Purchase of treasury shares (5.5)
Other (4.2) (2.9)
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Cash (Used for) Provided by Financing
Activities (9.0) (238.9)
Effect of Exchange Rate Change on Cash (0.1) (0.3)
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(Decrease) Increase in Cash and Cash
Equivalents 0.6 79.8
Cash and Cash Equivalents at Beginning
of Period 23.6 36.6
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Cash and Cash Equivalents at End of
Period $ 24.2 $ 116.4
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<FN>
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.
For a copy of this release, call fax-on-demand at (800) 758-5804, ext.113769.
</FN>