Tyson Foods reports third quarter 2021 results

Springdale, Arkansas – August 9, 2021 – Tyson Foods, Inc. (NYSE: TSN), one of the world’s largest food companies and a recognized leader in protein with leading brands including Tyson, Jimmy Dean, Hillshire Farm, Ball Park, Wright, Aidells, ibp and State Fair, today reported the following results:First Nine Months Highlights

•GAAP EPS of $4.63, up 20% from prior year; Adjusted EPS of $5.98, up 61% from prior year

•GAAP operating income of $2,487 million, up 22% from prior year; Adjusted operating income of $3,136 million, up 49% from prior year

•Total Company GAAP operating margin of 7.3%; Adjusted operating margin of 9.0%

•Generated approximately $2.7 billion of operating cash flows

•Results impacted by approximately $270 million of direct incremental expenses related to COVID-19

•Reduced total debt by approximately $1 billion

Third Quarter Highlights

•GAAP EPS of $2.05, up 42% from prior year; Adjusted EPS of $2.70, up 93% from prior year

•GAAP operating income of $1,062 million, up 37% from prior year; Adjusted operating income of $1,372 million, up 81% from prior year

•Total Company GAAP operating margin of 8.5%; Adjusted operating margin of 10.8%

•Liquidity of $3.4 billion at July 3, 2021

•Entered into an agreement to sell our Pet Treats business for $1.2 billion; closed in the fourth quarter of fiscal 2021

•Team member safety remains top priority; requiring vaccination for U.S. team members; nearly 50% vaccinated so far

“We delivered a strong performance in a strong protein market,” said Tyson Foods President & CEO Donnie King. “With trusted brands that met strong consumer demand, we have delivered 12 consecutive quarters of share gains in core business lines at retail. Our foodservice volume improved as the restaurant industry began to reopen and recover. Our beef business increased production to meet strong U.S. and international demand for higher-quality products. And we continued to build financial strength, reducing our debt and investing in future growth by laying out plans to expand our business, both to address capacity constraints and meet growing demand.”

COVID-19 EXPENSES

We incurred direct incremental expenses associated with the impact of COVID-19 totaling approximately $55 million and $270 million for the third quarter and first nine months of fiscal 2021, respectively. These direct incremental expenses primarily included team member costs associated with worker health and availability including direct costs for personal protection equipment, production facility sanitization, COVID-19 testing, donations, product downgrades, rendered product and certain professional fees, partially offset by CARES Act credits. Other indirect costs associated with COVID-19 are not reflected in this amount, including costs associated with raw materials, distribution and transportation, plant underutilization and reconfiguration, premiums paid to cattle producers and pricing discounts.