Tyson Foods 2000 Annual Report Download - page 25

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MANAGEMENT’S DISCUSSION AND ANALYSIS
TYSON FOODS, INC. 2000 ANNUAL REPORT
The following is an analysis of sales by segment:
dollars in millions
1999 1998 Change
Food Service $3,354 $3,329 $ 25
Consumer Products 2,252 2,074 178
International 645 592 53
Swine 110 161 (51)
Seafood 189 214 (25)
Other 813 1,044 (231)
Total $7,363 $7,414 $ (51)
Segment profit, defined as gross profit less selling
expenses, is as follows:
dollars in millions
1999 1998 Change
Food Service $311 $232 $ 79
Consumer Products 241 179 62
International 68 9 59
Swine (63) (21) (42)
Seafood 22 3 19
Other 155 110 45
Total $734 $512 $222
Food Service sales for 1999 increased $25 million or 0.8%
compared to 1998, with a 2.6% increase in volume primarily
offset by a 1.8% decrease in average sales prices. Segment
profit for Food Service increased $79 million over 1998 primar-
ily due to lower grain prices and a change in product mix.
Consumer Products sales for 1999 increased $178 million
or 8.6% compared to 1998. This increase was primarily due
to a 10.5% increase in volume partially offset by a 1.8%
decrease in average sales prices. Consumer Products segment
profit increased $62 million resulting from the increase in
volume and lower grain costs.
International sales for 1999 increased $53 million or 9%
compared to 1998. This increase is primarily the result of a
29.6% increase in volume partially offset by a 15.9% decrease
in average sales prices. Segment profit for International increased
$59 million. The increase in volume and segment profit for
the International segment is primarily due to the consolidation
of Tyson de Mexico.
Swine sales for 1999 decreased $51 million or 31.7%
compared to 1998. Swine segment loss increased $42 million.
The swine business experienced a significant decrease in mar-
ket prices during 1999 compared to 1998, resulting in a Swine
group net loss of $0.18 per share for 1999.
Seafood sales for 1999 decreased $25 million or 11.7%
compared to 1998. This decrease was primarily due to the
sale of the seafood business at the beginning of the fourth
quarter of 1999. Segment profit for Seafood increased
$19 million.
Other sales for 1999 decreased $231 million or 22.1%
compared to 1998, primarily due to the sale of non-core
businesses at the end of the first quarter of 1999. Other
segment profit increased $45 million.
Cost of sales for 1999 decreased 3.3% compared to 1998.
This decrease was primarily the result of decreased sales and
lower grain costs. As a percent of sales, cost of sales was
82.2% for 1999 compared to 84.4% for 1998 primarily due
to lower grain costs.
Operating expenses for 1999 decreased 13.5% from 1998,
primarily due to impairment and other charges of $77 million
in 1999 compared to $142 million in 1998. As a percent of
sales, selling expense decreased to 7.8% in 1999 compared to
8.7% in 1998, primarily due to the $48 million charge in 1998
for losses in the Company’s export business to Russia. General
and administrative expense, as a percent of sales, was 1.8% in
both 1999 and 1998. Amortization expense, as a percent of
sales, was 0.5% in 1999 compared to 0.4% in 1998.
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