SPRINGDALE -- Springdale-based Tyson Foods, Inc., one of the world's largest meat processors, reported record earnings in 2013, acquired several small companies as part of its overall growth plan, and made changes to its animal welfare guidelines.
The company surpassed analysts estimates in fiscal 2013, which ended in October, and ended strong with reported record earnings of $34.37 billion despite lower than expected revenue in its second quarter.
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Tyson pledged a $1 million donation in February to the Jones Center for Families in Springdale that will be dispursed over the next five years in $200,000 increments. The donation will be used to cover general operating costs.
In the first quarter of fiscal 2014, Tyson reported $8.8 billion in sales, up 4.7 percent from the same time last year. It also reported a record profit of $254 million, or 72 cents a share.
Its international performance did not meet its expectations in 2013 in part because of avian flu in China and a weak fourth quarter in Mexico, said Donnie Smith, Tyson president and chief executive officer. The company had product sales in more than 130 countries during 2013.
The company also experienced a loss for the first quarter of 2014 in the international sector, with the largest negative return in China. Tyson plans to slow down the building of chicken farms until market conditions improve because of the loss, Smith said.
The company has acquired three small food companies, as part of the its growth plan. The businesses were Utah-based Don Julio Foods, maker of corn and flour tortillas, and potato chips and pretzels; California-based Circle Foods, maker of tortillas and flatbreads; and Michigan-based Bosco's Pizza Co., maker of frozen pizza crust and breadsticks.
The primary benefit to purchasing these companies is to have more products to sell, said Worth Sparkman, Tyson public relations manager. "Although they were relatively small companies, we see strong potential with them all."
Tyson also launched a line of breakfast items as part of the company's prepared foods segment called Tyson Day Starts which has seven products, including biscuit sandwiches, flat breads and wrapped omelets.
"Day Starts is a great example of our push for innovation, as we set a goal to have 20 percent of our domestic poultry and prepared food sales coming from new product innovation," Smith said during the fourth quarter earnings call in January.
Jim Lochner, chief operating officer, announced during the earnings call that he would retire at the end of the fiscal 2014. Lochner will continue in an advisory role during his retirement, Smith said.
Tyson employs approximately 115,000, with about 99,000 in the U.S. and 16,000 internationally, according to the company's annual report issued in September. The company has 7,900 workers in Benton and Washington counties.
In 2012, Tyson implemented a new audit program to ensure responsible on-farm treatment of animals. The company received an "A" rating last year for its high level of disclosure and transparency from The Global Reporting Initiative, an international monitoring group.
In January, the company released new animal welfare guidelines for its hog suppliers as part of the FarmCheck. The guidelines include increased third-party audits, on-farm video monitoring, improvement on current housing systems and new anesthesia and euthanasia rules.
The new guidelines came two months after a video surfaced of alleged abuse of hogs at a contract farm in Oklahoma. Tyson immediately terminated its contract with the hog producer and retrieved all of its hogs from the farm.
Gary Mickelson, director of public relations for Tyson, said the guidelines were not because of any particular incident, but as part of the company's continuing effort to reflect the expectations of consumers.
NW News on 03/23/2014