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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended October 1, 1994
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[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File No. 0-3400
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TYSON FOODS, INC.
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(Exact Name of Registrant as specified in its Charter)
Delaware 71-0225265
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2210 West Oaklawn, Springdale, Arkansas 72762-6999
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(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code (501) 290-4000
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Securities registered pursuant to Section 12(b) of the Act:
Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, Par Value $.10
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-K or any
amendment to this Form 10-K. [X]
On October 1, 1994, the aggregate market value of the Class A
Common and Class B Common voting stock held by non-affiliates of the
registrant was $1,671,325,608 and $1,353,552 respectively.
On October 1, 1994, there were outstanding 76,745,002 shares of the
registrants Class A Common Stock, $.10 par value, and 68,455,438
shares of its Class B Common Stock, $.10 par value.
Page 1 of 102 Pages
The Exhibit Index appears on pages 22 through 26
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
The following documents or the indicated portions thereof are incorporated
herein by reference into the indicated portions of the Form 10-K: (i) pages
19-44 of registrant's Annual Report to Shareholders for fiscal year ended
October 1, 1994, (the "Annual Report") which are filed as exhibit 13 to
this Form 10-K and (ii) the registrant's definitive Proxy Statement for the
registrant's Annual Meeting of Shareholders to be held January 13, 1995, as
filed with the Commission on December 6, 1994 (the "Proxy Statement").
PART I
Item 1. Business
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Pages 22-26 of registrant's Annual Report under the caption
"Management Discussion and Analysis."
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
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Matters
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Page 42 of the Annual Report under the caption "Price of
Company's Common Stock."
Item 6. Selected Financial Data
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Pages 20-21 of the Annual Report under the caption "Eleven-Year
Financial Summary."
Item 7. Management's Discussion and Analysis of Financial Condition
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and Results of Operations
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Pages 22-26 of the Annual Report under the caption "Management
Discussion and Analysis."
Item 8. Financial Statements and Supplementary Data
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Pages 27-44 of the Annual Report under the captions "Consolidated
Statements of Operations," "Consolidated Balance Sheets,"
"Consolidated Statements of Shareholders' Equity," "Consolidated
Statements of Cash Flows," "Notes to Consolidated Financial
Statements," and "Report of Independent Auditors."
2
Part III
Item 10. Directors and Executive Officers of the Registrant
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The information set forth under the caption "Election of
Directors" and "Compliance with Section 16 (a) of the Securities
Exchange Act of 1934" in the Proxy Statement.
Item 11. Executive Compensation
----------------------
The information set forth under the caption "Executive
Compensation and Other Information" in the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and
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Management
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The information set forth under the captions "Principal
Shareholders" and "Security Ownership of Management" in the
Proxy Statement.
Item 13. Certain Relationships and Related Transactions
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The information set forth under the caption "Certain
Transactions" in the Proxy Statement.
3
PART I
ITEM 1. BUSINESS
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General
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Tyson Foods, Inc. and its various subsidiaries (collectively, the
"Company" or "Tyson") produce, market and distribute a variety of food
products consisting of value-enhanced poultry; fresh and frozen poultry;
value-enhanced beef and pork products; fresh and frozen pork products;
value-enhanced seafood products; fresh and frozen seafood products; and
flour and corn tortillas, chips and other Mexican food-based products.
Additionally, the Company has live swine, animal feed and pet food
operations. The Company's integrated operations consists of breeding and
rearing chickens and hogs, harvesting seafood, as well as the processing,
further processing and marketing of these food products. Additionally, the
Company processes and markets beef products. The Company's products are
marketed and sold to national and regional grocery chains, regional grocery
wholesalers, clubs and warehouse stores, military commissaries, industrial
food processing companies, national and regional chain restaurants or their
distributors, international export companies and domestic distributors who
service restaurants, foodservice operations such as plant and school
cafeterias, convenience stores, hospitals and other vendors. Sales are made
by the Company's sales staffs located in Springdale, Arkansas, in regions
throughout the United States and in several foreign countries.
Additionally, sales to the military and a portion of sales to international
markets are made through independent brokers and trading companies. The
Company conducts the major portion of its business activities on a
vertically integrated basis and considers its business to be one industry
segment, that of "food products." The Company commenced business in 1935,
was incorporated in Arkansas in 1947, and was reincorporated in Delaware in
1986.
Description
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Originally, the Company was a producer and distributor of fresh
chicken. The Company developed a strategy to insulate itself from the
commodity nature of the fresh chicken business through value-enhancement.
As the industry leader in value-enhanced poultry products, the Company
utilizes national and regional advertising, special promotions and brand
identification, and meets the varying demands of its customers through
capital expenditures and strategic acquisitions. With further-processed
poultry products, grain costs, as a percentage of total product costs, are
reduced because of the value added to the products by cutting, deboning,
cooking, packaging or freezing the poultry. As a result, management
believes the Company's profitability is more dependent upon product
quality, marketing and service than on grain and broiler prices.
The Company's integrated poultry processes include genetic research,
breeding, hatching, rearing, ingredient procurement, feed milling,
veterinary and other technical services, and related transportation and
delivery services. The Company contracts with independent growers to
maintain the Company's flocks of breeder chicks which, when grown, lay the
eggs which the Company transfers to its hatcheries and hatches into broiler
chicks. Newly hatched broiler chicks are vaccinated and are then delivered
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to independent contract growers who care for and feed the broiler chicks
until they reach processing weight, usually from the end of the fourth to
the eighth week. During the broiler growout period, the Company provides
growers with feed, vitamins and medication for the broilers, if needed, as
well as supervisory and technical services. The broilers are then
transported by the Company to its nearby processing plants. The Company
processed approximately 3.9 billion pounds of consumer poultry during
fiscal 1994.
The Company's farrow-to-finish swine operations, which include genetic
and nutritional research, breeding, farrowing and feeder pig finishing and
the marketing of live swine to regional and national packers, are conducted
in Alabama, Arkansas, Missouri, North Carolina, and Oklahoma. The Company
sold approximately 884,000 head of market weight live swine in fiscal 1994.
With the addition of pork slaughtering facilities more of the Company's
live swine are being processed. The Company utilizes dedicated processing
facilities to produce a variety of value-enhanced beef, pork and Mexican
food-based products. The Company processed approximately 518 million pounds
of consumer beef and pork during fiscal 1994.
The Company's by-products operations converts inedible poultry by-
products into high-grade pet food and animal feed.
In the first quarter of fiscal 1993, the Company acquired Arctic
Alaska Fisheries Corporation ("Arctic"), a seafood processing company and
certain assets of Oscar Mayer Foods Corporation known as Louis Kemp Seafood
Company ("Louis Kemp"), a seafood further-processing company.
With the acquisition of Arctic, the Company acquired the largest
catching and at-sea processing fleet in the North Pacific. These vessels
harvest a wide range of species of bottomfish and shellfish year-round off
the coasts of Alaska, Washington and Oregon. The catch is either processed
at sea or in shore-based processing facilities into a variety of product
forms, which are marketed in the Far East, primarily in Japan, and in the
United States under the Arctic Ice trademark. Arctic's primary products are
cleaned whole fish, crab, surimi paste, cod fillets and pollock fillets.
The Company's long-term strategy for seafood products continues to be a
plan of using its marketing and distribution channels to expand sales
opportunities while using its research and development resources to create
additional value-enhanced seafood products. The Company has integrated
Arctic and Louis Kemp by supplying Louis Kemp with Arctic's products as
needed.
Recent Acquisitions
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On January 6, 1994, the Company acquired Gorges Foodservice, Inc.
("Gorges") and certain related assets. Gorges is a beef further-processing
company with annual sales of approximately $55 million. The purchase of
Gorges strengthens the Company's market share in beef by expanding further-
processed categories with particular emphasis on school products.
On April 19, 1994, the Company increased its 18% ownership to 50.1% in
Trasgo, S.A. de C.V.("Trasgo"). With annual sales of approximately
$140 million, Trasgo is the third largest poultry producer and processor in
Mexico, serving both retail and foodservice markets. Trasgo is one of the
most modern poultry operations in Mexico with significant expansion
capabilities.
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Effective July 3, 1994, the Company acquired certain assets of
Culinary Foods, Inc.("Culinary"), a manufacturer and processor of high
quality, value-added specialty frozen foods with annual sales of
approximately $70 million. Its customers include business and industry,
restaurants, hotels, airlines, club stores, hospitals and caterers. The
acquisition of Culinary, and its Lady Aster line of products, gives the
Company capabilities for fully-prepared meat products, entrees, sauces and
gravies to complement its Signature Specialties line.
On August 18, 1994, the Company increased its 50% ownership interest
to 100% in Cobb-Vantress, Inc. ("CVI"), one of the world's leading
suppliers of breeding stock to the broiler industry, with annual sales of
approximately $35 million, excluding sales to Tyson. Ninety percent of CVI
sales, excluding sales to Tyson, are outside the United States and CVI has
a major distribution outlet in the United Kingdom.
Sources of Revenue
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During the past fiscal year the principal revenue sources of the
Company included value-enhanced poultry products, fresh and frozen poultry
products, value-enhanced beef and pork products, Mexican food-based
products, frozen dinner products, seafood products, live swine and related
operations, animal foods, by-products, and other miscellaneous products.
The following table sets forth the relative sources of the Company's
revenues for the last three fiscal years.
For Fiscal Year Ended
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1994 1993 1992
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Consumer poultry products:
Value-enhanced poultry (1) 65% 67% 73%
Basic poultry (2) 10 8 8
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Total consumer poultry 75 75 81
Beef, pork, Mexican food-based
products, live swine and
other prepared foods (3) 18 17 17
Seafood 5 5 0
Animal foods, by-products
and other 2 3 2
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Total 100% 100% 100%
(1) Includes products such as chicken patties and nuggets, pre-cooked
chicken, individually-quick-frozen chicken segments, pre-packaged and
pre-priced poultry, Cornish game hens and other poultry products
to which certain processes are added to enhance its value to the
Company's customers.
(2) Includes fresh and frozen poultry products sold without value
enhancements. The increase in this category for fiscal 1994 results
from the acquisition of a controlling interest in Trasgo, which
currently does not have a significant amount of value-enhanced
products.
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(3) Includes value-enhanced beef and pork products such as portion
controlled steaks, chops and roasts, ground beef, chicken-fried
steaks, meatloaf, hams, bacon and sausages; flour and corn tortillas,
corn chips, taco shells and filled tortilla specialty items; premium
frozen dinners and other specialty items.
Marketing and Distribution
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The Company seeks to develop and increase the demand for and market
share of a product or product line through concentrated national and local
advertising and other promotional efforts stressing product quality, brand
identification and meeting specific customer requirements. The Company's
principal marketing strategy is to identify target markets for value-
enhanced food products consisting primarily of poultry, beef, pork, Mexican
food-based products and seafood. The Company concentrates production, sales
and marketing efforts in order to appeal to and enhance the demand from
those markets. The Company utilizes its national distribution system and
customer support services to achieve a dominant market position for its
products. The Company identifies distinct markets through trade and
consumer research.
The Company's nationwide distribution system utilizes a network of
food distributors which is supported by cold storage warehouses owned or
leased by the Company, by public cold storage facilities and by the
Company's transportation system. The Company ships products from two
Company-owned major frozen food distribution centers having a storage
capacity of approximately 58 million pounds, from a network of public cold
storages, from other owned or leased facilities or directly from plants.
The Company has a total frozen storage capacity in excess of 125 million
pounds, excluding public or outside cold storage. The Company's
distribution centers facilitate accumulating frozen products so that the
Company can fill and consolidate less than truckload orders into full
truckloads, thereby decreasing shipping costs while increasing customer
service. In addition, customers are provided with a selection of products
that do not require large volume orders. The Company's distribution system
enables it to supply large or small quantities of products to meet customer
requirements anywhere in the continental United States.
The Company's food products are sold primarily in three broad domestic
markets consisting of foodservice, retail and wholesale club. The
foodservice, retail and wholesale club markets may, in some cases, overlap.
The Company's food products are also sold internationally.
In the foodservice market, the Company sells poultry, beef, pork,
seafood and tortilla products. Operators serving these products include
full-service restaurants, fast-food restaurants, hotels, motels, retail,
recreation, healthcare, schools, colleges, business and industry and other
foodservice accounts. The Company's products are sold through foodservice
and specialty distributors who deliver to the above listed operators.
Foodservice products are sold under the following brands and
trademarks: Tyson, Holly Farms, Weaver, Tastybird, Tastybasted, Honey
Stung, Tyson's Pride, HoneyBest, Wing Stingers, W.W. Flyers,
Signature Specialties, Flavor-Redi, Tyson To Go, Mexican Original,
7
Tyson beef, Quick-to-Fix, Tyson pork, Louis Kemp, Arctic Ice,
Enterprise, Crab Delights, Lobster Delights, Ocean Master and Sure Salad.
These products include: (a) poultry items such as individually-quick-
frozen (IQF) segments, ready-to-cook and fully-cooked fried chicken, fully-
cooked, breaded and glazed wings, cooked and ready-to-cook breaded and
unbreaded tenderloins, cooked and ready-to-cook breaded and unbreaded
patties and chunks, oven roasted chicken, stuffed breast specialties, split
broilers, Cornish hens, commodity breast, flavor marinated breasts, fully-
cooked diced chicken products and breaded breast and thigh pieces and
strips; (b) beef items such as chicken-fried steaks, portion controlled
steaks, prime rib and roasts, charbroiled beef patties, ground beef, and
beef specialties such as meatballs, Salisbury steak and meatloaf; (c) pork
items such as hams, ham loaf and ham patties, sausages including polish,
knockwurst and bratwurst, frankfurters, bulk and pre-sliced deli-meats,
fully-cooked pork specialties including rib and loin products, pork chops,
pork roasts and pork ribs; (d) Mexican food-based items such as flour and
corn tortillas and chips; and (e) seafood items such as surimi, snow crab,
king crab, pollock, cod, and several species of flatfish.
In the retail market the Company sells a wide variety of food products
to customers that sell food products for at-home consumption. These
customers include grocery store chains, independent grocery stores and
grocery wholesalers.
Retail products include: (a) frozen prepared foods consisting of
separate lines of Tyson breaded chicken patties, chunks, fillets and
tenders; Weaver breaded chicken tenders, nuggets, patties and fillets;
Tyson premium plated dinners; Tyson flavored chicken wings; Tyson complete
meal kits; Tyson premium pot pies; Tyson Healthy Portion meals; Tyson
individually-quick-frozen chicken parts and breaded chicken patties and
chunks; Weaver fried chicken; and Tyson pork rib and beef rib patties;(b)
refrigerated prepared foods consisting of separate lines of Tyson Holly
Farms roasted ready-to-eat chicken; Tyson and Weaver sliced lunch meat;
Tyson, Weaver and Holly Farms hot dogs; Tyson and Weaver deli meats;
Mexican Original tortillas, chips, and taco shells; and Tyson ham and
specialty meats;(c) refrigerated Tyson Holly Farms chill pack poultry; (d)
refrigerated Tyson case-ready pork products; (e) frozen and refrigerated
Tyson Cornish game hens; and (f) seafood products which are marketed under
the Louis Kemp brand of Crab Delights and Lobster Delights.
In the wholesale club market the Company designs and markets a variety
of products targeted to small foodservice operators and large families who
frequent club stores. These products are aimed at both foodservice
operators who buy in small quantities and want to cut costs of storage and
final distribution, as well as retail consumers willing to buy larger than
normal quantities to realize cost savings. The Company sells several
categories of products including: IQF chicken, fresh chicken, refrigerated
roasted ready-to-eat chicken, frozen value-added chicken, canned chicken;
frozen value-added beef and pork products, fresh pork products; surimi,
frozen pollock, cod and crab legs.
8
The Company's international division markets and sells the full line
of Tyson products, including beef, pork, seafood and Mexican food-based
products, throughout the world. The international division exported to 43
countries in fiscal 1994. Major markets include Japan, Russia, Hong Kong,
Singapore, and China. The Company also exported to Canada, Mexico, certain
Middle Eastern countries, and many countries in the Caribbean. The
Company's foreign sales for fiscal 1994, 1993, and 1992 totaled
$537.9 million, $352 million and $192.5 million, respectively. The increase
in 1994 foreign sales was due primarily to sales on leg quarter contracts
to Russia, increased sales to national foodservice accounts, primarily
large U.S. chain accounts expanding in foreign markets and sales of chicken
paws or feet to China and Hong Kong. Additionally, approximately 31% of the
increase was due to the acquisition of Trasgo. The majority of the
Company's export sales consists of commodity dark meat and wings.
The Company has targeted China as a potential operational base in
which to develop fully-integrated poultry and pork facilities. These
facilities would not only service the needs of the local markets in China
but will also be an export supplier to other Asian countries in conjunction
with the Company's exports from the United States. CVI recently entered
into a joint venture agreement with a Hong Kong company to build a 180,000
capacity breeder farm in China. The Company also has a seafood processing
joint venture in Shanghai, China. This joint venture is engaged in value-
added processing of seafood items.
Financial Instruments
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The Company has entered into foreign exchange forward contracts to
hedge some of its foreign currency exposure. Foreign exchange forward
contracts are legal agreements between two parties to purchase and sell a
foreign currency, for a price specified at the contract date, with delivery
and settlement in the future. The Company uses such contracts to hedge
exposure to changes in foreign currency exchange rates associated with
certain assets and obligations denominated in foreign currency. Gains and
losses on these contracts are recognized concurrently with the transaction
gains and losses from the associated exposure. At October 1, 1994, the
Company had outstanding forward exchange contracts, maturing on October 31,
1994, to sell $9.1 million of foreign currency (principally Japanese yen).
These forward exchange contracts hedge balance sheet and operating income
currency exposures.
The Company's financial instruments that are exposed to concentrations
of credit risk consist primarily of cash equivalents and trade receivables.
The Company's cash equivalents are in high quality securities placed with
major banks and financial institutions. Concentrations of credit risk with
respect to receivables are limited due to the large number of customers and
their dispersion across geographic areas. The Company performs periodic
credit evaluations of its customers' financial condition and generally does
not require collateral. At October 1, 1994, the Company does not have
significant credit risk concentrations. No single group or customer
represents greater than 10% of total accounts receivable.
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Raw Materials and Sources of Supply
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The major raw materials used by the Company in its poultry operations
consists of feed ingredients, cooking ingredients, packaging materials
and cryogenic agents. The Company believes that its sources of supply
for these materials are adequate for its present needs and the Company
does not anticipate any difficulty in acquiring these materials in the
the future. While the Company produces substantially all of its inventory
of breeder chickens, live broilers and swine, it has the capability to
purchase live, ice-packed or deboned poultry to meet poultry production
requirements. Raw materials for the Company's beef operations are purchased
through the open market. While a substantial amount of the raw material
requirements for the Company's pork operations are provided by live swine
rearing operations, some requirements may be met by purchasing from other
suppliers.
In addition, raw material requirements for the Company's seafood
operations are met by Arctic's vessels harvesting a wide range of species
of bottomfish and shellfish year-round off the coasts of Alaska, Washington
and Oregon. A large supply of bottomfish, one of the principal groups
of fish harvested for human consumption, is found in the 200-mile
U.S. exclusive economic zone off the coast of Alaska. This area also
provides a significant quantity of crab for commercial harvesting.
Following passage of the Magnuson Fishery Conservation and Management Act
of 1976, the United States extended control over the management of offshore
fishing resources from a 12-mile to a 200-mile exclusive economic zone by,
among other things, establishing annual catch limits and allocating
the available resources between U.S. and foreign catchers and processors.
As a result of these government actions the Company's ability to harvest
seafood is subject to these limitations.
Patents and Trademarks
- ----------------------
The Company has registered a number of trademarks relating to its
products which either have been approved or are in the process of
application. Because the Company does a significant amount of brand name
and product line advertising to promote its products, it considers the
protection of such trademarks to be important to its marketing efforts. The
Company has also developed non-public propriety information regarding its
production processes and other product-related matters. While the Company
utilizes internal procedures and safeguards to protect the confidentiality
of such information, it does not generally seek patent protection for the
technology it utilizes.
Seasonal Demand
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The demand for the Company's products generally increases during the
spring and summer months and generally decreases during the winter months.
Because of the somewhat seasonal character of the Company's business, the
Company may increase its finished product inventories during the winter
months in anticipation of increased spring and summer demands.
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Industry Practices
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Due primarily to the perishable nature of its products, industry
practice and the fluctuation in demand and price for such products the
Company's agreements with its customers are generally short-term, verbal
agreements.
Customer Relations
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No single customer of the Company accounts for more than 10% of the
Company's consolidated revenues, and the loss of any single customer
would not have a material adverse effect on the Company's business.
Although any extended discontinuance of sales to any major customer which
is not replaced could have an impact on the Company's operations, the
Company does not anticipate any such occurrences due to the demand for its
products and its ability to obtain new customers.
Backlog of Orders
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There is no significant backlog of unfilled orders for the Company's
products.
Competition
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The Company's food products compete with those of other national and
regional food producers and processors and certain prepared food
manufacturers. Additionally, the Company's food products compete in
international markets in Europe, South America, Central America and
the Far East. The Company's principal marketing and competitive
strategy is to identify target markets for value-enhanced products, to
concentrate production, sales and marketing efforts in order to appeal to
and enhance the demand from those markets and, utilizing its national
distribution system and customer support services, to achieve a dominant
market position for its products. Past efforts have indicated that customer
demand generally can be increased and sustained through application of the
Company's marketing strategy, as supported by its distribution system.
Research and Development
- ------------------------
The Company conducts continuous research and development activities to
improve the strains of primary poultry breeding stock, the genetic
qualities of swine, finished product development and developing further-
processed seafood products. Additionally, a separate staff of research and
development personnel is maintained to develop and provide for product
needs. The annual cost of such research and development programs is less
than 1% of total annual sales.
Regulation
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The Company's facilities for processing poultry and for housing live
poultry and swine are subject to a variety of federal, state and local
11
environmental protection laws and regulations, including provisions
relating to the discharge of materials into the environment. The Company's
poultry, beef, pork and Mexican food-based processing facilities are also
subject to extensive inspection and regulation by the United States
Department of Agriculture. The cost of compliance with such laws and
regulations has not had a material adverse effect upon the Company's
capital expenditures, earnings or competitive position and it is not
anticipated to have a material adverse effect in the future.
Fishing activities and seafood processing activities of the Company's
seafood operations are closely regulated by the United States Department of
Commerce and various other state and governmental agencies. These agencies
establish, among other things, fishing seasons and resource depletion
restrictions and regulate legal gear types. Violations of the Magnuson Act
and state laws can result in substantial penalties, ranging from fines and
seizure of catch and vessels. See "Legal Proceedings" under Item 3. In
addition, the seafood operations are subject to various federal, state and
local laws relating to protection of the environment and the health and
safety of employees.
To provide consumer reassurance of product integrity and safety, to
create a quality point of difference with the competition, and to assume a
position of measured industry leadership in production standards, Louis
Kemp voluntarily complies with certain United States Department of Commerce
regulations which enable it to show the United States Department of
Commerce seal of approval (PUFI) on its primary products. Both Louis Kemp
Seafood manufacturing facilities are United States Department of Commerce
inspected and are participants in the government's pilot Hazard Analysis
Critical Control Point (HACCP) program.
Employees and Labor Relations
- -----------------------------
As of October 1, 1994, the Company employed approximately 55,800
persons. The Company believes that its relations with it workforce are
good.
ITEM 2. PROPERTIES
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The Company currently has production and distribution operations in
the following states: Alabama, Alaska, Arkansas, Georgia, Illinois, Iowa,
Maryland, Michigan, Minnesota, Mississippi, Missouri, North Carolina,
Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia
and Washington. Additionally, the Company has facilities or participates in
joint venture operations in Argentina, Brazil, China, Denmark, Hong Kong,
India, Indonesia, Japan, Mexico, Philippines, South Africa, Spain, United
Kingdom and Venezuela. This increase in international operations and joint
ventures is principally due to the Company's increased ownership in Trasgo
and CVI.
The principal poultry operations of the Company consists of 48
processing plants. These plants are devoted to various phases of
slaughtering, dressing, cutting, packaging, deboning or further-processing.
The total slaughter capacity is approximately 30 million head per week.
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To support the above facilities the Company operates 26 feed mills, 56
broiler hatcheries, 466 breeder farms, 38 pullet farms and 372 broiler farms
with sufficient capacity to meet the needs of the poultry operations. In
addition, the Company has poultry cold storage facilities owned or leased
with a capacity of approximately 106.7 million pounds.
The Company's beef and pork operations consist of eight plants with a
capacity to process 15.3 million pounds per week, supported by eight
freezer storage facilities. The Company's swine slaughtering and processing
plant processes approximately 33,000 hogs per week.
The Company's Mexican food-based product and prepared food operations
consist of five processing plants supported by four additional freezer
storage facilities.
The Company's swine operations consists of 101 swine farrowing and
nursery units and 508 swine finishing units. These swine growout operations
are supported by two dedicated feed mills supplemented by the production
from the poultry operations' feed mills. In addition, the Company operates
a grain drying and two storage facilities in support of its swine feed mill
operations.
The Company's seafood operations consist of 34 catching and at-sea
processing vessels along with two freighters. The at-sea processing is
supported by six shore-based processing plants, three of which are
dedicated to surimi processing.
The Company's animal feed and pet food processing operations consist
of seven rendering plants with the capacity to produce 15.8 million pounds
of animal protein products per week and ground pet food operations capable
of producing 7.9 million pounds of product per week.
The Company owns its major operating facilities and sea vessels with the
following exceptions: three processing plants are leased under agreements
expiring in 1995, 1996, and 1999, four broiler hatcheries are leased under
month-to-month leases and one is leased under an agreement expiring in 1995,
254 breeder farms are leased under agreements expiring at various dates
through 1999, 38 pullet farms and 21 broiler farms are leased under
year-to-year renewable lease agreements, two freezer storage facilities are
leased under month-to-month leases and two are leased under agreements
expiring in 1996 and 1999, 52 swine farrowing and nursery units and 312 swine
finishing units are leased under one to ten year renewable lease agreements.
Management believes that the Company's present facilities are
generally adequate and suitable for its current purposes. In general,
the Company's facilities are fully utilized. However, seasonal fluctuations
in inventories and production may occur as a reaction to market demands for
certain products. The Company regularly engages in construction and other
capital improvement projects intended to expand capacity and improve the
efficiency of its processing and support facilities. In January 1994, the
Company announced plans to build four new poultry-processing complexes to
be completed over the next three years. This increase will enable the
Company to meet forthcoming demand over the next three years. The first of
the four complexes is being built and should be ready to start production
in mid-1995. The Company is also constructing another plant for production
of Mexican food-based products. At fiscal year-end, the Company had
construction projects in progress that will require approximately
$151.5 million to complete.
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ITEM 3. LEGAL PROCEEDINGS
-----------------
The Company is involved in various lawsuits and claims made by third
parties on an ongoing basis as a result of its day-to-day operations,
including the following two matters relating to Arctic. In April 1994,
after investigations beginning as early as 1990, a Federal Grand Jury in
Seattle, Washington indicted former officers, directors and employees of
Arctic as well as Arctic on criminal charges stemming from the sinking of
the fishing vessel Aleutian Enterprise in 1990 and other matters relating
to the overall operation of Arctic. In September 1994, the Federal Grand
Jury issued superseding indictments against the former officers, directors
and employees as well as Arctic on substantially identical criminal charges
with two prior indictees being dismissed. The factual allegations giving
rise to the fifty-three (53) count multiple indictments now pending in the
United States District Court, Western District of Washington at Seattle,
occurred prior to the Company's acquisition of Arctic on October 5, 1992.
Conviction of the individuals, as well as Arctic, carries penalties and
fines ranging from a maximum fine or penalty per count of $500,000 and 10
years in prison. The Company anticipates that a trial of a portion of the
defendants on the indictments will begin in June of 1995. Also, on
September 8, 1993, the State of Alaska, after conducting investigations,
filed a Complaint for Forfeiture and Damages alleging that certain Arctic
vessels participated in the use of certain fishing gear during 1990, 1991,
and 1992. While management is not able at the present time to determine the
outcome of these matters, based upon information currently available,
management presently does not believe that any of these lawsuits or claims
by third parties will have a material adverse effect on the Company's
financial position.
On or about November 8, 1993, Arctic Fisheries, Inc. ("AFI"), an
indirect wholly owned subsidiary of the Company, agreed to settle a civil
suit filed by the Environmental Protection Agency alleging various
violations of the Clean Water Act from 1987 to 1990, prior to the
Company's acquisition of Arctic. Under the terms of the settlement, which
will be final after the applicable public comment period has expired, AFI
agreed to pay $725,000, conduct additional sampling and monitoring not
otherwise required by AFI's discharge permit, and stop discharging fish
processing wastes in certain areas.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
Not applicable.
14
Executive Officers of the Company
- ---------------------------------
Officers of the Company serve one year terms from the date of their
election, or until their successors are appointed and qualified. The name,
title, age and year of initial election of the Company's executive
officers are listed below:
Name Title Age Year Elected
- ---- ----- --- ------------
Don Tyson Chairman of the Board of Directors 64 1963
Leland Tollett Vice Chairman of the Board of 57 1966
Directors, Chief Executive Officer
and President
Wayne Britt Senior Vice President, 45 1977
International Sales and Marketing
Roy Brown Senior Vice President, 42 1993
Seafood Division
Ellis Brunton Group Vice President, 52 1993
Research and Quality Assurance
William Jaycox Group Vice President, 48 1990
Human Resources
Gary Johnson Corporate Controller 50 1982
Gerald Johnston Executive Vice President, Finance 52 1972
Dennis Leatherby Treasurer 34 1994
Greg Lee Senior Vice President, 47 1993
Sales and Marketing
Bill Moeller Group Vice President, 44 1981
Swine Division
David Purtle Senior Vice President, Operations 50 1985
Mary Rush Secretary and 60 1982
Director of Investor Relations
John H. Tyson President, 41 1984
Beef and Pork Division
Donald E. Wray Chief Operating Officer 57 1979
15
John H. Tyson is the son of Don Tyson. No other family relationships
exist among the above officers. Messrs. Don Tyson, Johnson, Johnston, and
Moeller have served the Company in essentially the indicated capacities for
more than the past five years. Mr. Tollett was appointed Chief Executive
Officer and President in 1991 and Vice Chairman of the Board of Directors
in 1994 after serving as President and Chief Operating Officer since 1983.
Mr. Britt was appointed Senior Vice President, International Sales and
Marketing in 1994 after serving as Vice President, Wholesale Club Division
since 1992 and Vice President, Secretary/Treasurer since 1982. Mr. Brown
was appointed Senior Vice President, Seafood Division in 1993 after serving
as Vice President, Sales and Marketing, International Division since 1992
and Director of Retail Sales since 1983. Mr. Brunton was appointed Group
Vice President, Research and Quality Assurance in 1993 after serving as
Director of Technical Services since 1989. Mr. Brunton joined the Company
in July 1989 upon the acquisition of Holly for which he served as Vice
President, Technical Services since 1986. Mr. Jaycox was appointed Group
Vice President, Human Resources in 1990 after joining the Company in July
1989 upon the acquisition of Holly for which he served as Vice President of
Personnel for Harker's, Inc. since 1986. Mr. Leatherby was appointed
Treasurer in 1994 after serving as Assistant Treasurer since 1990. Mr. Lee
was appointed Senior Vice President, Sales and Marketing in 1993 after
serving as Division Vice President of Foodservice Sales and Marketing since
1988. Mr. Purtle was appointed Senior Vice President, Operations in 1991
after serving as Group Vice President, Operations since 1985. Ms. Rush was
appointed Secretary and Director of Investor Relations in 1992 after
serving as Assistant Secretary/Treasurer since 1982. Mr. John H. Tyson was
appointed President, Beef and Pork Division in 1993 after serving as Vice
President since 1987. Mr. Wray was appointed Chief Operating Officer in
1991 after serving as Senior Vice President, Sales and Marketing Division
since 1985.
16
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
-------------------------------------------------------------
MATTERS
-------
The Company currently has issued and outstanding two classes of
capital stock, Class A Common Stock (the "Class A Stock") and Class B
Common Stock (the "Class B Stock"). The holders of Class A Stock are
entitled to one vote per share and the holders of Class B Stock are
entitled to ten votes per share on matters submitted to shareholders for
approval. No cash dividend may be paid to the holders of Class B Stock
unless a cash dividend is simultaneously paid to the holders of Class A
Stock, and the per share amount of the dividend paid to the holders of
Class B Stock cannot exceed 90% of the cash dividend simultaneously paid to
the holders of Class A Stock. Transfer of the Class B Stock is restricted
except in limited circumstances. Holders of Class B Stock may convert such
stock into Class A Stock on a share for share basis.
On October 1, 1994, there were approximately 36,030 holders of record
of the Company's Class A Stock and 25 holders of record of the Company's
Class B Stock, excluding holders in the security positions listings held by
nominees. The Company's Class A Stock is traded on the Nasdaq stock
market's National Market under the symbol "TYSNA." No public trading market
currently exists for the Class B Stock. Information regarding the high and
low sales prices of the Company's Class A Stock is set forth in the table
on page 42 of the Annual Report under the caption "Price of Company's
Common Stock," which information is incorporated herein by reference.
The Company has paid uninterrupted quarterly dividends on its common
stock each year since 1977. On January 14, 1994, the Board of Directors
increased the annual dividend rate on Class A Stock to $.08 per share and
fixed an annual dividend rate of $.0666 per share for the Class B Stock,
effective with the quarterly dividend paid on March 15, 1994. Prior to
that, quarterly dividends were paid at an annual rate of $.04 for Class A
Stock and $.0333 for Class B Stock.
During 1994, the Company initiated an open market stock repurchase
program which authorized the purchase of up to 15 million shares of the
Company's Class A common stock. The Company intends to utilize shares
repurchased to fund existing employee benefit plans and increase treasury
stock. No timetable has been set for completion of the repurchase program.
As of October 1, 1994, the Company had purchased approximately 2.5 million
shares under the repurchase program.
17
ITEM 6. SELECTED FINANCIAL DATA
-----------------------
See the information reflected under the caption "Eleven-Year Financial
Summary" on pages 20-21 of the Annual Report, which information is
incorporated herein by reference.
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
-------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
See the information reflected under the caption "Management Discussion
and Analysis" on pages 22-26 of the Annual Report, which information is
incorporated herein by reference.
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------
See the information on pages 27-44 of the Annual Report under the
caption "Consolidated Statements of Operations," "Consolidated Balance
Sheets," "Consolidated Statements of Shareholders' Equity," "Consolidated
Statements of Cash Flows," "Notes to Consolidated Financial Statements,"
and "Report of Independent Auditors," which information is incorporated
herein by reference. Other financial information is filed under Item 14 of
Part IV of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
---------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
Not applicable.
18
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------
The information set forth under the captions "Election of Directors"
and "Compliance with Section 16(a) of the Securities Exchange Act of 1934"
in the Proxy Statement, which information is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
----------------------
Pursuant to general instruction G(3) of the instructions to Form 10-K,
certain information concerning the Company's executive officers is included
under the caption "Executive Officers of the Company" in Part I of this
Report. See the information set forth under the caption "Executive
Compensation" in the Proxy Statement, which information is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
See the information included under the caption "Principal
Shareholders" and "Security Ownership of Management" in the Proxy
Statement, which information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
See the information included under the caption "Certain Transactions"
in the Proxy Statement, which information is incorporated herein by
reference.
19
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
------------------------------------------------------------------
(a) The following documents are filed as a part of this report:
1. The following consolidated financial statements of the
registrant included on pages 27-42 in the Company's Annual
Report for the fiscal year ended October 1, 1994 and the
Report of Independent Auditors, on page 44 of such Annual
Report are incorporated herein by reference. Page references
are to page numbers in the Annual Report.
Pages
Consolidated Statements of Operations 27
for the three years ended
October 1, 1994
Consolidated Balance Sheets at 28-29
October 1, 1994 And October 2, 1993
Consolidated Statements of Shareholders' 30-31
Equity for the three years ended
October 1, 1994
Consolidated Statements of Cash Flows for 32
the three years ended October 1, 1994
Notes to Consolidated Financial 33-42
Statements
Report of Independent Auditors 44
2. The following additional information for the years
1994, 1993 and 1992 is submitted herewith. Page
references are to the consecutively numbered pages
of this report on Form 10-K:
Pages
Report of Independent Auditors 30
Schedule V - Property, Plant and 31
Equipment for the three years ended
October 1, 1994
Schedule VI - Accumulated Depreciation 32
of Property, Plant and Equipment for the
three years ended October 1, 1994
Schedule VIII - Valuation and Qualifying 33
Accounts and Reserves for the three
years ended October 1, 1994
Schedule IX - Short-Term Borrowings for 34
the three years ended October 1, 1994
Schedule X - Supplementary Income 35
Statement Information for the three
years ended October 1, 1994
20
All other schedules are omitted because they are neither applicable nor
required. Separate parent company financial statements have been
omitted since the registrant is primarily an operating company.
3. The exhibits filed with this report are listed in the Exhibit
Index at the end of this Item 14.
4. The Company did not file any reports on Form 8-K during the
quarter ended October 1, 1994.
21
EXHIBIT INDEX
-------------
The following exhibits are filed with this report or are incorporated
by reference to previously filed material. Page references are to the
consecutively numbered pages of each attached Exhibit.
Exhibit No. Page
- ---------- ----
3(a) Certificate of Incorporation of the Company as
amended (previously filed as Exhibit 3(a) to the
Company's Registration Statement on Form S-4
filed with the Commission on July 8, 1992,
Commission file No. 33-49368, and incorporated
herein by reference).
3(b) Amended and Restated Bylaws of the Company 36-47
4(a) Amended and Restated Note Purchase Agreement,
dated June 30, 1993, by and between the Company
and various Purchasers as listed in the Purchaser
Schedule attached to said agreement, together
with the following related documents:
(i) Form of Series A Note
(ii) Form of Series D Note
(previously filed as Exhibit 4(a) to the
Company's Quarterly Report on Form 10-Q for the
period ended July 3, 1993, Commission File No.
0-3400, and incorporated herein by (reference).
4(b) Amended and Restated Note Agreement, dated
June 30, 1993, by and between the Company and
various Purchasers as listed in the Purchaser
Schedule attached to said agreement, together
with the following related documents:
(i) Form of Series E Note
(ii) Form of Series F Note
(iii) Form of Series G Note
(previously filed as Exhibit 4(b) to the
Company's Quarterly Report on Form 10-Q for the
period ended July 3, 1993, Commission File No.
0-3400, and incorporated herein by reference).
10(a) Credit Agreement, dated June 30, 1993, by and
among the Company, as Borrower, Banque Nationale
De Paris, The Chase Manhattan Bank, N.A.,
Chemical Bank, Continental Bank, N.A., Credit
Lyonnais, NationsBank of Texas, N.A., Cooperative
Centrale Raiffeisen-Boerenleenbank, B.A.,
(Rabobank Nederland), Societe Generale and
22
The Toronto-Dominion bank as Co-Agents and Bank
of America National Trust and Savings
Association, as Agent (previously filed as
Exhibit 10(a) to the Company's Quarterly Report
on Form 10-Q for the period ended July 3, 1993,
Commission File No.0-3400, and incorporated
herein by reference).
10(b) Amendment No. 1 to Credit Agreement dated
June 8, 1994, by and among the Company, as
Borrower, The Chase Manhattan Bank, N.A.,
Chemical Bank, Continental Bank N.A., Cooperative
Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank
Nederland), Morgan Guaranty Trust Company of New
York, National Westminister Bank Plc, NationsBank
of Texas, N.A., and Societe Generale as Co-Agents
and Bank of America National Trust and Savings
Association, as Agent (previously filed as
Exhibit 10(c) to the Company's Amendment No. 19
to the Tender Offer Statement on Schedule 14D-1
for all outstanding shares of common stock for
WLR Foods, Inc. and Amendment No. 20 to the
Schedule 13D by WLR Acquisition Corp. and Tyson
Foods, Inc. previously filed on June 9, 1994,
Commission File No. 0-3400, and incorporated
herein by reference).
10(c) Third Amended and Restated Credit Agreement,
including all exhibits thereto, dated as of
June 8, 1994, by and among the Company, as
Borrower, The Chase Manhattan Bank, N.A.,
Chemical Bank, Continental Bank N.A., Cooperative
Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank
Nederland), Morgan Guaranty Trust Company of New
York, National Westminister Bank Plc, NationsBank
of Texas, N.A., and Societe Generale as Co-Agents
and Bank of America National Trust and Savings
Association, as Agent (previously filed as
Exhibit 10(b) to the Company's Amendment No. 19
to the Tender Offer Statement on Schedule 14D-1
for all outstanding shares of common stock for
WLR Foods, Inc. and Amendment No. 20 to the
Schedule 13D by WLR Acquisition Corp. and Tyson
Foods, Inc. previously filed on June 9, 1994,
Commission File No. 0-3400, and incorporated
herein by reference).
10(d) Issuing and Paying Agency Agreement dated
July 1, 1993, between the Company and Morgan
Guaranty Trust Company of New York, (previously
filed as Exhibit 10(d) to the Quarterly Report on
Form 10-Q for the period ended July 3, 1993,
Commission File No. 0-3400, and incorporated
herein by reference).
10(e) Commercial Paper Dealer Agreement dated
July 1, 1993, between the Company and Merrill
23
Lynch Money Markets Inc. (previously filed as
Exhibit 10(e) to the Quarterly Report on
Form 10-Q for the period ended July 3, 1993,
Commission File No. 0-3400, and incorporated
herein by reference).
10(f) Commercial Paper Dealer Agreement dated
July 1, 1993, between the Company and Toronto
Dominion Securities (U.S.A.) Inc. (previously
filed as Exhibit 10(f) to the Quarterly Report on
Form 10-Q for the period ended July 3, 1993,
Commission File No. 0-3400, and incorporated
herein by reference).
10(g) Commercial Paper Dealer Agreement dated
July 1, 1993, between the Company and the First
Boston Corporation (previously filed as Exhibit
10(g)to the Quarterly Report on Form 10-Q for the
period ended July 3, 1993, Commission File No.
0-3400, and incorporated herein by reference).
10(h) Commercial Paper Dealer Agreement dated
July 1, 1993, between the Company and J.P. Morgan
Securities, Inc. (previously filed as Exhibit
10(h) to the Quarterly Report on Form 10-Q for
the period ended July 3, 1993, Commission File
No. 0-3400, and incorporated herein by
reference).
10(i) Commercial Paper Dealer Agreement dated
July 1, 1993, between the Company and Bank of
America National Trust and Savings Association
(previously filed as Exhibit 10(i) to the
Quarterly Report on Form 10-Q for the period
ended July 3, 1993, Commission File No. 0-3400,
and incorporated herein by reference).
10(j) Commercial Paper Dealer Agreement dated 48-51
September 1, 1994, between the Company and Chase
Securities, Inc.
10(k) Tyson Foods, Inc. Senior Executive Performance 52-53
Bonus Plan adopted November 18, 1994.
10(l) Tyson Foods, Inc. Restricted Stock Bonus Plan, 54-60
effective August 21, 1989, as amended and
restated on April 15, 1994,; and Amendment No. 2
to Restricted Stock Bonus Plan effective
November 18, 1994.
10(m) Profit Sharing Plan and Trust of Tyson Foods,
Inc., as amended and restated effective
April 1, 1987, (previously filed as Exhibit 10(a)
to the Company's Annual Report on Form 10-K for
the fiscal year ended October 3, 1987, Commission
File No. 0-3400, and incorporated herein by
reference).
24
10(n) Tyson Foods, Inc. Employee Stock Purchase Plan,
effective April 1, 1979, as amended and restated
effective November 1, 1986, (previously filed as
Exhibit 10(b) to the Company's Annual Report on
Form 10-K for the fiscal year ended
October 3, 1987, Commission File No. 0-3400, and
incorporated herein by reference).
10(o) Tyson Foods, Inc. Incentive Stock Option Plan of
1982, as amended and restated on
September 5, 1987, (previously filed as Exhibit
10(c) to the Company's Annual Report on Form 10-K
for the fiscal year ended October 3, 1987,
Commission File No. 0-3400, and incorporated
herein by reference).
10(p) Tyson Foods, Inc. Amended and Restated 61-69
Nonstatutory Stock Option Plan, as amended and
restated on November 18, 1994.
10(q) Tyson Foods, Inc. Employee Stock Ownership Plan
as amended and restated on September 5, 1987,
(previously filed as Exhibit 10(e) to the
Company's Annual Report on Form 10-K for the
fiscal year ended October 3, 1987, Commission
File No. 0-3400, and incorporated herein by
reference).
10(r) Amended and Restated Employment Agreement dated 70-72
as of July 1, 1994, between the Company and Don
Tyson, Chairman of the Board of Directors of the
Company.
10(s) Retirement Savings Plan of Tyson Foods, Inc.,
qualified under Section 401(k) of the Internal
Revenue Code, effective October 1, 1987, and
Trust Agreement related thereto (previously filed
as Exhibit 10(g) to the Company's Annual Report
on Form 10-K for the fiscal year ended
October 3, 1987, Commission File No. 0-3400, and
incorporated herein by reference).
10(t) Tyson Employee Retirement Income Savings Plan, as
amended and restated effective April 1, 1987,
(previously filed as Exhibit 10(h) to the
Company's Annual Report on Form 10-K for the fiscal
year ended October 3, 1987, Commission File No.
0-3400, and incorporated herein by reference).
10(u) Indemnity Agreements dated February 27, 1987,
between Tyson Foods, Inc. and certain of its
officers and directors (previously filed as
Exhibit 10(i) to the Company's Annual Report on
Form 10-K for the fiscal year ended
October 3, 1987, Commission File No. 0-3400, and
incorporated herein by reference).
25
10(v) Plan of Reorganization and Merger, dated as of
June 15, 1992, among Arctic Alaska Fisheries
Corporation, the Company and Tyson Acquisition,
Inc. (previously filed as Appendix I to the
Company's Amendment No. 1 to Registration
Statement on Form S-4 filed with the Commission
on July 27, 1992, Commission File No. 33-49368,
and incorporated herein by reference).
11 Statement Regarding Computation of Earnings Per 73
Share.
13 Pages 19-44 of the Annual Report to Shareholders 74-99
for the fiscal year ended October 1, 1994.
22 Subsidiaries of the Company. 100
23 Consent of Independent Auditors. 101
27 Financial Data Schedule. 102
26
SIGNATURES
Pursuant to requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
TYSON FOODS, INC.
By /s/ Gerald Johnston November 18, 1994
-------------------
Gerald Johnston
Executive Vice President,
Finance
27
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
/s/Neely Cassady Private Investor and November 18, 1994
- -------------------- Arkansas State Senator
Neely Cassady
/s/ Lloyd V. Hackley Chancellor, Fayetteville November 18, 1994
- -------------------- State University
Lloyd V. Hackley
/s/ Gary Johnson Corporate Controller November 18, 1994
- -------------------- (Principal Accounting
Gary Johnson Officer)
/s/Gerald Johnston Executive Vice President, November 18, 1994
- -------------------- Finance (Principal
Gerald Johnston Financial Officer)
/s/ Shelby D. Massey Private Investor November 18, 1994
- --------------------
Shelby D. Massey
/s/ Joe F. Starr Vice President November 18, 1994
- --------------------
Joe F. Starr
/s/ Leland E. Tollett Vice Chairman of the Board, November 18, 1994
- --------------------- Chief Executive Officer and
Leland E. Tollett President
/s/ Barbara Tyson Vice President November 18, 1994
- ---------------------
Barbara Tyson
/s/ Don Tyson Chairman of the Board November 18, 1994
- ---------------------
Don Tyson
/s/ John H. Tyson President, November 18, 1994
- --------------------- Beef and Pork Division
John H. Tyson
/s/ Fred S. Vorsanger Vice President(Emeritus) November 18, 1994
- --------------------- University of Arkansas
Fred S. Vorsanger and Private Investor
/s/ Donald E. Wray Chief Operating Officer November 18, 1994
- ---------------------
Donald E. Wray
28
FINANCIAL STATEMENT SCHEDULES
29
REPORT OF INDEPENDENT AUDITORS
We have audited the consolidated financial statements of Tyson Foods, Inc.
as of October 1, 1994 and October 2, 1993, and for each of the three years
in the period ended October 1, 1994, and have issued our report thereon
dated November 14, 1994. Our audits also included the financial statement
schedules listed in Item 14(a) in this annual report (Form 10-K). These
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
/s/ ERNST & YOUNG LLP
- ---------------------
ERNST & YOUNG LLP
November 14, 1994
Little Rock, Arkansas
30
TYSON FOODS, INC.
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
THREE YEARS ENDED OCTOBER 1, 1994
(Dollars in Thousands)
Balance at (2) Changes Balance at
Beginning Additions Add End
Classification of Period at Cost Retirements (Deduct) of Period
- -------------- ---------- --------- ----------- -------- ---------
1994
- ----
Land $ 40,144 $ 16,279 $ 295 $ 0 $ 56,128
Buildings & Leasehold
Improvements 562,526 116,133 2,539 0 676,120
Machinery & Equipment 1,277,956 210,292 36,092 0 1,452,156
Vessels 119,654 4,726 12,636 0 111,744
Land Improvements
and Other 62,669 8,033 157 0 70,545
Buildings & Equipment
Under Construction 123,195 19,955 0 0 143,150
--------- ------- ------- ----- ---------
Total $2,186,144 $ 375,418 $ 51,719 $ 0 $2,509,843
1993 ========= ======= ======= ===== =========
- ----
Land $ 38,180 $ 2,006 $ 42 $ 0 $ 40,144
Buildings & Leasehold
Improvements 525,704 39,111 2,289 0 562,526
Machinery & Equipment 1,080,644 214,056 16,744 0 1,277,956
Vessels 0 119,654 0 0 119,654
Land Improvements
and Other 59,949 3,152 432 0 62,669
Buildings & Equipment
Under Construction 53,980 69,215 0 0 123,195
--------- ------- ------ ---- ---------
Total $1,758,457 $ 447,194 $ 19,507 $ 0 $2,186,144
1992 ========= ======= ====== ==== =========
- ----
Land $ 37,519 $ 711 $ 50 $ 0 $ 38,180
Buildings & Leasehold
Improvements 510,382 19,463 203 (3,938)(1) 525,704
Machinery & Equipment 998,310 104,140 25,744 3,938 (1)1,080,644
Land Improvements
and Other 54,594 5,869 513 0 59,949
Buildings & Equipment
Under Construction 76,173 (22,193) 0 0 53,980
--------- -------- ------ ---- ---------
Total $1,676,978 $ 107,990 $ 26,510 $ 0 $1,758,457
========= ======== ====== ==== =========
(1) Reclassification.
(2) Includes $143.3 million during 1994 for the acquisition of Gorges
Foodservice, Inc., Culinary Foods, Inc., Cobb-Vantress International, and
Trasgo S.A. de C.V. Includes $221.9 million during 1993 for the acquisition
of Arctic Alaska Fisheries Corporation and Brandywine Foods, Inc.
31
TYSON FOODS, INC.
SCHEDULE VI
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT, AND EQUIPMENT
Three Years Ended October 1, 1994
(Dollars in Thousands)
Additions Other
Balance at Charged Changes Balance at
Beginning of to Costs Add End
Description Period and Expenses Retirements (Deduct) of Period
- ----------- ------------ ------------ ----------- -------- ----------
1994
- ----
Buildings &
Leasehold
Improvements $ 140,533 $ 19,955 $ 1,663 $4,230 (2) $ 163,055
Machinery &
Equipment 583,682 130,924 17,681 5,635 (2) 702,560
Vessels 4,866 4,925 57 0 9,734
Land
Improvements &
Other 21,765 2,807 93 18 (2) 24,497
------- ------- ------ ----- -------
Total $ 750,846 $ 158,611 $ 19,494 $9,883 $ 899,846
======= ======= ====== ===== =======
1993
- ----
Buildings &
Leasehold
Improvements $ 122,350 $ 18,012 $ 29 $200 (1) $ 140,533
Machinery &
Equipment 474,433 120,412 10,963 (200)(1) 583,682
Vessels 0 4,866 0 0 4,866
Land
Improvements &
and Other 19,487 2,466 188 0 21,765
------- ------- ------ ----- -------
Total $ 616,270 $ 145,756 $ 11,180 $ 0 $ 750,846
======= ======= ====== ===== =======
1992
- ----
Buildings &
Leasehold
Improvements $ 106,169 $ 16,598 $ 129 $(288)(1) $ 122,350
Machinery &
Equipment 391,460 100,410 17,725 288 (1) 474,433
Land
Improvements
and Other 17,397 2,355 265 0 19,487
------- ------- ------ ----- -------
Total $ 515,026 $ 119,363 $ 18,119 $ 0 $ 616,270
======= ======= ====== ===== =======
(1) Reclassification.
(2) Other Adjustments.
32
TYSON FOODS, INC.
SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Three Years Ended October 1, 1994
(Dollars in Thousands)
Balance at Charged to Charged Balance
Beginning Costs and to Other Additions at End
Description of Period Expenses Accounts (Deductions) of Period
- ----------- ---------- --------- -------- ----------- ---------
Allowance for
Doubtful Accounts
1994 2,597 1,120 0 (453) 3,264
1993 2,512 952 0 (867) 2,597
1992 3,224 1,669 0 (2,381) 2,512
(1) Uncollectible accounts written-off.
33
TYSON FOODS, INC.
SCHEDULE IX
SHORT-TERM BORROWINGS
Three Years Ended October 1, 1994
(Dollars in Thousands)
Category of Balance Weighted Maximum Average Weighted
Aggregate End of Average Amount Amount Average
Short-term Period Interest Outstanding Outstanding Interest
Borrowings Rate During the During the During the
Period Period Period
- ----------- ------- -------- ------------ ----------- ----------
1994
Banks $ 49,360 5.03% $ 212,000 $ 66,970 3.66%
Other - - - - -
All Categories $ 49,360 5.03% $ 212,000 $ 66,970 3.66%
1993
Banks $ 29,800 3.11% $ 140,000 $ 74,637 3.54%
Other - - - - -
All Categories $ 29,800 3.11% $ 140,000 $ 74,637 3.54%
1992
Banks - - $ 92,800 $ 27,270 4.30%
Other - - - - -
All Categories $ 92,800 $ 27,270 4.30%
(1) The average borrowings were determined based on the daily amounts
outstanding.
(2) The weighted average interest rate during the period was computed
by dividing actual interest expense by weighted average short-term
borrowings.
34
TYSON FOODS, INC.
SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
Three Years Ended October 1, 1994
(Dollars in Thousands)
Charged to Costs and Expenses
-----------------------------
Item 1994 1993 1992
- ---- ---- ---- ----
Advertising Costs and Sales
Promotion Expenses $ 183,564 $ 193,491 $ 155,757
Repairs and Maintenance $ 125,352 $ 115,697 $ 90,984
Amortization of intangible assets and amounts expended for taxes other than
payroll and income taxes, and royalties were less than 1% of total sales
and revenues and are not presented.
35