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$TSN 2Q15 10-Q: In 2Q15, as part of its ongoing efforts to increase efficiencies in its Chicken business, Tyson announced the planned closure of its Buena Vista, Georgia plant. Operations are expected to cease in 3Q15. The closure is not expected to have a significant impact on Tyson’s operating results.
$TSN made an additional investment in plant-based protein producer Beyond Meat. Through $TSN's venture capital fund, the company chose to participate in Beyond Meat's most recent fundraising initiative, which is designed to generate additional capital to help the business continue to expand its product portfolio and distribution.
$TSN announced that Amy Tu has been named EVP and General Counsel, effective December 11, 2017. Tu will succeed David L. Van Bebber, and will report directly to President and CEO Tom Hayes. Tu joins $TSN from The Boeing Company, where she most recently served as Chief Counsel for Global Law Affairs.
$TSN expands its production in the City of Humboldt, making this is the second development project in Tennessee this year after the $84MM expansion of its Union City operations. The $300MM project that is expected to create over 1,500 local jobs will begin operations in late 2019.
The Board of Directors of $TSN has raised the dividend for FY18 to an annual rate of $1.20 per share, representing a 33% increase. The company said it if on target to bring its debt to adjusted EBITDA ratio to around two times by 3Q18. Three non-protein businesses will be divested by early 2018, and the proceeds will be used to repay debt.
$TSN is looking for operating margins of more than 5% for the Beef segment and 9% for the Pork segment in fiscal 2018. Operating margin of the Chicken division is anticipated to improve to 11%, helped by a 3% volume growth, while the Prepared Foods segment is forecast to produce returns between 11% and 12%.
$TSN said it completed the integration of synergy capture related to Hillshire in 4Q17. The company expects to achieve about $200MM in savings in fiscal 2018 through a combination of synergies from the acquisition of Advance Pierre and cost savings, under its financial fitness program. The Hillshire synergies will be reinvested to grow the company.
Contributing to $TSN’s robust 4Q17 performance, sales of the Pork segment rose 10% annually to $1.4Bil. Sales of Beef products rose 6% to $3.8Bil, and those of Chicken products advanced 8%. The company reported a 23% increase in sales of Prepared Foods.
$TSN ended the year registering improved performance across all business segments, resulting in a 10% growth in sales to $10Bil in 4Q17. Net income advanced to $394MM or $1.07 per share from $391MM or $1.03 per share last year. Adjusted earnings climbed 49% to $1.43 per share. The Beef and Pork segments of the food company delivered strong returns.
$TSN said through a combination of synergies from the integration of AdvancePierre Foods acquired in June, and additional eliminations of non-value-added costs, it expects cumulative net savings of $200MM, $400MM and $600MM over FY18, FY19 and FY20, respectively. These savings primarily will impact the Prepared Foods and Chicken segments.
$TSN said it is track for another record year for earnings as it nears the end of its FY17. Looking to FY18, the company expects topline sales growth of about 6% to about $41Bil as $TSN grows volume, improve its sales mix to higher value products and benefit from a full year of AdvancePierre Foods in its portfolio.
$TSN received a letter from the Securities and Exchange Commission concerning the investigation of the company related to the allegations in In re Broiler Chicken Antitrust Litigation. The letter stated that the SEC staff has concluded its investigation and that it does not intend to recommend an enforcement action by the SEC against $TSN.
$TSN said it will invest $84MM as part of its commitment to the continued success of its Union City, Tennessee poultry plant. More than 300 jobs will be created by the project, which is expected to be complete by mid-2019. The project, set to begin this fall, will increase capacity to the plant’s existing harvest area.