Tyson Shareholders Defeat PETA Proposal

Beef sales to rise in second half of year, CFO search continues, company reps say

Last updated Friday, February 3, 2006 10:18 PM CST in Business

By Lana F. Flowers
The Morning News

Chickens are mutilated by throat-cutting machines and are scalded "while they are still sentient and able to feel pain," according to PETA spokesman David Benjamin.

E.W. "Spike" Shannon, who owns 50,200 shares of Tyson stock, voted against PETA's proposal. Shannon started with Red Hudson of the former Hudson Foods of Rogers in 1972, and worked for that company until 1984. Tyson later acquired Hudson Foods.

Shannon said while "the do-gooders don't know it," poultry slaughtering methods have come a long way. The modern method of slitting chickens' necks keeps workers 100 feet away and the birds are "definitely dead when they go into the scalding tanks," Shannon said.

Tyson has an Office of Animal Well-Being, managed by a veterinarian with 30 years of experience in the livestock industry. Tyson officials are researching methods of animal handling and care, but there is limited use in the United States of controlled atmosphere killing, a statement said.

John Tyson, chairman and chief executive officer, said continued beef import bans in Japan, Korea and numerous other countries hurt international beef sales. He said beef sales are down and the company processes 600,000 cattle per week, down from 650,000 to 670,000 per week two years ago.

More than 60 countries banned U.S. beef after a December 2003 mad cow discovery in Washington state.

For the quarter ended Dec. 31, Tyson Foods reported net income of $38 million, more than 18 percent lower than the same quarter in fiscal 2005. The beef segment had a loss of $64 million, compared to a $12 million operating loss in the first quarter of 2005. Tyson Foods estimated it lost $800 million in beef exports in 2005.

However, John Tyson said he is optimistic beef sales will go up in the last half of the fiscal year 2006, which ends Sept. 30, as Taiwan and South Korea reopen their borders.

Dick Leatherby, treasurer and interim chief financial officer, said he expects Tyson to earn 50 cents to 80 cents per share in on sales of $26 billion to $27 billion in the rest of fiscal year 2006.

Tyson will have $600 million to $650 million in capital expenditures, including evaluating acquisitions and international expansion. Greg Lee, chief administrative officer and international president, said he foresees acquisitions and joint ventures with companies in China, Mexico and South America.

Dick Bond, president and chief operating officer, said he expects sales of value-added products, like seasoned chicken and steak strips, prepared refrigerated beef dishes and meal kits, to increase to $12 billion in fiscal year 2006. Sales of value added products totaled $10.6 billion in 2004 and $11.1 billion in 2005, Bond said.

In other business, Tyson shareholders:

• Cast 1.1 billion votes, or 90.41 percent, to elect 10 members to the company's board of directors.

• Cast 1.22 billion votes, or 99.72 percent, to continue using Ernst & Young LLP as the company's independent auditor.

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