Tyson Foods reduces net debt to $1.75 billion in fiscal third quarter

By Jennifer Lanning Drey

Portland, Ore., Aug. 9 - Tyson Foods, Inc. generated more than $600 million of operating cash flow in its fiscal third quarter, which allowed the company to reduce its net debt to $1.75 billion at July 3, Dennis Leatherby, Tyson's chief financial officer, said Monday during the company's quarterly earnings conference call.

The company repurchased more than $400 million of bonds during the fiscal third quarter.

Tyson's only debt maturity coming due in the next two years is $327 million of 8¼% notes due in October 2011, which it expects to retire with cash on hand or cash flow from operations, Leatherby said.

Tyson had more than $834 million of cash and total liquidity of $1.6 billion at July 3.

"The financial health of our company has improved dramatically in a very short period of time and our capital structure reflects this," Leatherby said.

The CFO also said Tyson will continue to use its available cash to repurchase notes when they are available at attractive rates.

During the first nine months of fiscal 2010, Tyson used cash, restricted cash and cash flows from operations to reduce its debt by nearly $900 million and to reinvest more than $400 million back into the business through capital expenditures.

"Continued strong cash flows generated by each of our businesses will strengthen [the balance sheet] further while at the same time allowing us to invest heavily in our operations for even more success in the future," he said.

Tyson reported fiscal third-quarter sales of $7.44 billion, up from sales of $6.66 billion in the comparable period of 2009.

Additionally, the company posted operating income of $507 million in the fiscal third quarter, compared with operating income of $276 million in the same period of 2009.

Tyson Foods is a Springdale, Ark.-based processor and marketer of chicken, beef and pork.

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