SPRINGDALE, Ark., July 19 /PRNewswire-FirstCall/ -- Tyson Foods, Inc.
(NYSE: TSN) has agreed to settle Michael Archer et al. v. Tyson Foods, Inc. et
al., a lawsuit stemming from the company's decision in 2002 to restructure its
live swine operations in Arkansas and eastern Oklahoma, the company reported
today.
Subject to execution of a definitive settlement agreement and approval by
the court, Tyson will pay $42.5 million to 85 contract swine growing
operations, which had claimed the company improperly failed to renew their
contracts. In accordance with the settlement, the growers will be subject to
a court order requiring them to properly close the environmental waste systems
no longer in use on their farms.
"From the beginning, we've sought to resolve this matter in a way
beneficial to everyone involved, including the contract growers," said Gene
Leman, senior group vice president of Tyson Fresh Meats. "While we had hoped
to avoid litigation, we're pleased a settlement has finally been reached."
Operating losses in Tyson's live swine division prompted the company to
announce a restructuring in 2002 that resulted in the elimination of
approximately 200 jobs, the closure of company-owned and leased hog farms, and
discontinued relationships with about 130 contract growers.
The phase-out of these operations was completed in 2003. It reduced the
total number of sows by 30% in Tyson's live swine business from approximately
100,000 to approximately 70,000 sows, and reduced finishing farms by 83%.
About one-quarter of the affected growers reached agreements with Tyson
without litigation. On September 12, 2002, the contract swine operations
filed suit against the company in the Circuit Court of Pope County, Arkansas.
A trial had been scheduled to begin August 1, 2005.
In connection with the settlement, Tyson accrued charges of approximately
$33 million or $.06 per share in the third fiscal quarter of 2005, the company
reported. No further charges are expected in connection with the settlement.
Tyson still has hog breeding operations in the Holdenville, Oklahoma area
and a limited number of farms in northwest Arkansas. Both provide weaned pigs
to finishing operations in the Midwest. The company also retains some
contract hog finishing operations in north central Missouri, closer to Midwest
processing operations and grain supplies.
About Tyson Foods
Tyson Foods, Inc., founded in 1935 with headquarters in Springdale,
Arkansas, is the world's largest processor and marketer of chicken, beef, and
pork and the second-largest food company in the Fortune 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. Tyson has approximately 114,000 Team Members employed at more
than 300 facilities and offices in the United States and around the world.
Forward-Looking Statements
Certain statements contained in this communication are "forward-looking
statements" such as statements relating to the expected impact on Tyson's
earnings. These forward-looking statements are subject to risks,
uncertainties and other factors, which could cause actual results to differ
materially from historical experience or from future results expressed or
implied by such forward-looking statements. Among the factors that may cause
actual results to differ materially from those expressed in, or implied by,
the 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) successful
rationalization of existing facilities, and the operating efficiencies of the
facilities; (vi) changes in the availability and relative costs of labor and
contract growers; (vii) issues related to food safety, including costs
resulting from product recalls, regulatory compliance and any related claims
or litigation; (viii) adverse results from litigation; (ix) risks associated
with leverage, including cost increases due to rising interest rates or
changes in debt ratings or outlook; (x) changes in regulations and laws (both
domestic and foreign), including changes in accounting standards,
environmental laws and occupational, health and safety laws; (xi) the ability
of the Company to make effective acquisitions, and successfully integrate
newly acquired businesses into existing operations; (xii) effectiveness of
advertising and marketing programs; and (xiii) the effect of, or changes in,
general economic conditions. The Company wishes to caution readers not to
place undue reliance on any forward-looking statements, which speak only as of
the date made. Tyson undertakes no obligation to publicly update any forward-
looking statements, whether as a result of new information, future events or
otherwise.
SOURCE Tyson Foods, Inc.
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Related links:
http://www.tyson.com
CONTACT:
media, Gary Mickelson, +1-479-290-6111, or
investors, Louis Gottsponer, +1-479-290-4826, both of Tyson
Foods, Inc.
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