FAYETTEVILLE, Ark., Feb. 3 /PRNewswire-FirstCall/ -- With a "renewed sense
of determination," Tyson Foods (NYSE: TSN) will continue its strategy to
create more value-added products, improve operational efficiencies and expand
its international business, Chairman and CEO John Tyson told shareholders
today at the company's annual meeting.
"Without a doubt, we faced our share of challenges in 2005, but we've also
seen strong indicators that show our strategy is working," he said. "We're
optimistic because we have the right strategy and the right people coming
together."
Shareholders elected 10 members to the Tyson Board of Directors, including
five independent directors, and voted on two other items during the meeting at
the Walton Arts Center in Fayetteville, Arkansas. Workplace safety and
environmental stewardship award winners were honored and the company also
recognized 20 Team Members as "Tyson Heroes."
In a presentation to shareholders, John Tyson noted company
accomplishments, such as the addition of Tyson to the S&P 500 Index and the
company's ability to generate operating cash flow of nearly one billion
dollars while also exceeding a 40% debt-to-capital target ahead of schedule.
Interim Chief Financial Officer Dennis Leatherby reported the company
continues to exercise "financial discipline" and maintain a "solid balance
sheet." He said capital expenditures in fiscal 2006 are expected to be $600
million to $650 million. "Our future use of cash will first be to reinvest in
our business," he said. "The next use of cash will be to evaluate
acquisitions, with an emphasis on international expansion."
President and Chief Operating Officer Dick Bond said, "Innovation drove
our value-added sales growth of $500 million in 2005 and we are expecting
growth of $900 million for a total of $12 billion in 2006." Aiding this
effort will be the opening of Tyson's new research and development facility
known as The Discovery Center, the February start of the company's third major
case-ready meats plant and the continued expansion of Tyson's growing bacon
business.
The Discovery Center will open in several phases in 2006 and will allow
the company to further expand its multiple protein product research and
development. The new plant in Sherman, Texas, will increase Tyson's case-
ready capacity by 30%, once fully operational. Meanwhile, a $30 million
investment at Cherokee, Iowa, will enable the company to add new capacity to
its growing bacon business.
Bond also reported how the company is managing improvement programs to
make plants and products safer and increase efficiencies to control operating
costs. The company identified $302 million worth of projects in 2005 expected
to generate $84 million per year in cost savings or income and expects to
spend $232 million in 2006 to generate $72 million per year in cost savings or
income.
Chief Administrative Officer and International President Greg Lee reported
how export sales for chicken and pork both improved in 2005. Tyson further
diversified chicken exports by increasing sales volumes to Africa, the Middle
East and Latin America. Pork export volumes were at record levels in fiscal
2005, driven largely by increased demand for hams to Mexico and pork picnics
to Japan.
The inability to access major Asian markets resulted in an estimated loss
of $800 million in beef export sales for Tyson Foods in 2005. "We are
encouraged by recent developments in export market access," Lee said. "We
expect export sales to improve in the last two quarters of 2006."
Tyson increased production capacity in 2005 at its international
facilities in Canada, China and Mexico. The company also hopes to "establish
in-country presence" in at least one additional foreign market in 2006,
according to Lee. The company is actively engaged in due diligence with a
poultry company in China, as well as a beef processing company and a chicken
processing company in South America.
Lee noted the company's "Powered by Tyson" marketing campaign, "has met
our expectations in building overall brand awareness as more people now
identify the Tyson brand not only with chicken but with beef and pork
products." Tyson spent $125 million on the campaign in fiscal 2005 and "will
build on our momentum in 2006," he said.
During the business portion of the meeting, current members of the Tyson
Board of Directors, Dick Bond, Scott Ford, Lloyd Hackley, Jim Kever, Jo Ann
Smith, Leland Tollett, Barbara Tyson, Don Tyson, John Tyson and Albert
Zapanta, were elected for the upcoming year. Ernst & Young LLP was ratified
as independent auditor for 2006 and a shareholder proposal by the People for
Ethical Treatment of Animals was defeated.
A major part of the meeting involved the recognition of more than 60 Tyson
Team Members and family farmers who have made a positive difference in their
operations or communities over the past year. (Go to
http://www.tysonfoodsinc.com/PressRoom/pdfs/shareholders06_awards.pdf for a
list of those honored).
Twenty-eight Tyson managers and plant operations were honored for their
workplace safety efforts. The honors included the Chairman's Jacket Award,
Chairman's Gold Coin Award, Excellence in Safety Award and the Chairman's
Award for Best Overall Safety.
There were six national winners of Tyson's Farm Environmental Stewardship
Award. The honor recognizes family farmers who practice sound environmental
practices in their operations. In addition, the first-ever Facility
Environmental Stewardship Awards were presented to managers from 11 Tyson
plant operations.
"Tyson Heroes" were also honored. These are Team Members from all areas
of the company who have gone "above and beyond the call of duty," providing
inspiration for their fellow team members and making a difference in their
communities. Their actions ranged from volunteering in their communities and
helping people in need to saving lives.
Tyson Foods, Inc., founded in 1935 with headquarters in Springdale,
Arkansas, is the world's largest processor and marketer of chicken, beef, and
pork, the second-largest food company in the Fortune 500 and a member of the
S&P 500. The company produces a wide variety of protein-based and prepared
food products, which are marketed under the "Powered by Tyson(TM)" strategy.
Tyson is the recognized market leader in the retail and foodservice markets it
serves, providing products and service to customers throughout the United
States and more than 80 countries. The company has approximately 114,000 Team
Members employed at more than 300 facilities and offices in the United States
and around the world. Through its Core Values, Code of Conduct and Team
Member Bill of Rights, Tyson strives to operate with integrity and trust and
is committed to creating value for its shareholders, customers and Team
Members. The company also strives to be faith-friendly, provide a safe work
environment and serve as stewards of the animals, land and environment
entrusted to it.
Forward Looking Statements
The Company and its representatives may from time to time make written or
oral forward-looking statements, such as statements relating to projections on
future capital expenditures, expectations for new products, those new
products' contribution to incremental sales, the expected start of new
facilities, plans to increase our international presence and the expected
fiscal 2006 investment in the company's marketing campaign. These forward-
looking statements are subject to a number of factors and uncertainties which
could cause the Company's actual results and experiences to differ materially
from the anticipated results and expectations, expressed in such forward-
looking statements. The Company wishes to caution readers not to place undue
reliance on any forward-looking statements, which speak only as of the date
made. Among the factors that may cause actual results and experiences to
differ from the anticipated results and expectations expressed in such
forward-looking statements are the following: (i) fluctuations in the cost and
availability of raw materials, such as live cattle, live swine or feed grains;
(ii) market conditions for finished products, including the supply and pricing
of alternative proteins, and the demand for alternative proteins; (iii) risks
associated with effectively evaluating derivatives and hedging activities;
(iv) access to foreign markets together with foreign economic conditions,
including currency fluctuations and import/export restrictions; (v) outbreak
of a livestock disease (such as avian influenza (AI) or bovine spongiform
encephalopathy (BSE)) which could have an effect on livestock owned by the
Company, the availability of livestock for purchase by the Company, or the
Company's ability to access certain markets; (vi) successful rationalization
of existing facilities, and the operating efficiencies of the facilities;
(vii) changes in the availability and relative costs of labor and contract
growers; (viii) issues related to food safety, including costs resulting from
product recalls, regulatory compliance and any related claims or litigation;
(ix) adverse results from litigation; (x) risks associated with leverage,
including cost increases due to rising interest rates or changes in debt
ratings or outlook; (xi) changes in regulations and laws (both domestic and
foreign), including changes in accounting standards, environmental laws and
occupational, health and safety laws; (xii) the ability of the Company to make
effective acquisitions, and successfully integrate newly acquired businesses
into existing operations; (xiii) effectiveness of advertising and marketing
programs; and (xiv) the effect of, or changes in, general economic conditions
and (xv) the on-going review of the circumstances surrounding the restatement
of previously issued financial statements for the year ended October 1, 2005,
and the consequences thereof.
SOURCE Tyson Foods, Inc.
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Related links:
http://www.tyson.com
CONTACT:
Media, Gary Mickelson, +1-479-290-6111, or
Investors, Ruth Ann Wisener, +1-479-290-4235, both of Tyson
Foods, Inc.
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