Corporate Profiles - 2020 - 110

COMPANY OVERVIEW

Tyson Foods, Inc.
New leadership installed in very challenging environment
he changes taking place at Tyson Foods,
Inc. during 2020 started at the top. Samuel Dean Banks, executive vice president,
was tapped in late August to replace Noel W.
White as chief executive officer. Mr. Banks assumed his new role on Oct. 3.
He joined Tyson Foods as a director in 2017
and became president of the company in 2019.
He will retain the title of president after the
transition. Mr. Banks' background is rooted
in the technology field. Before joining Tyson
Foods, he was a project lead and on the leadership team at X, a business unit of Alphabet Inc.
He was managing partner of SEED Ventures,
a group that invested in and developed early
stage health care technologies, before joining
Alphabet.
Mr. Banks takes over a company struggling
to adapt to conducting business during the
pandemic. When the coronavirus (COVID-19)
began to spread in the United States, Tyson
Foods was forced to start and stop production
at many of its processing plants. The disruptions
led to supply chain issues that weighed on financial results.
Adapting to COVID-19 meant adding an
extra layer of protocols to protect the company's employee health and slow the spread.

T

Investments included walk-through temperature scanners, such plant-floor modifications as
staggered schedules, workspace partitions and
personal protective equipment, and the testing
of tens of thousands of workers every week.
The company spent $340 million on employee bonuses, safety equipment and safety
measures during the third quarter alone, which
ended June 27. The costs weighed on earnings.
Net income for the quarter was $527 million, equal to $1.48 per share on the common
stock, and a decline from the same period of
the previous year when Tyson Foods earned
$676 million, equal to $1.90 per share.
Sales were $10 billion for the quarter, down
from $10.8 billion the year prior.
The shift in consumer demand to retail and
away from foodservice also has proved challenging. The company has been investing in
operational flexibility to adjust.
"We recognize that our level of future

growth is dependent on away-from-home eating occasions, which will be impacted by communities opening up and potentially reclosing,"
Mr. White said on Aug. 3. "We will thus remain
nimble and remain ready to adjust our facilities
as demand picks up or shifts."
Tyson Foods undertook a restructuring effort
prior to the pandemic and eliminated 500 jobs,
mostly at its corporate offices in Springdale,
Ark., and Chicago. The company also formed a
partnership with Jacob Stern & Sons to form
a joint venture called JST Global LLC, which
will process and sell beef- and pork-derived
fats and oils to industries like pharmaceuticals, animal nutrition and the renewable
foods market.
The company also found itself embroiled in
a Department of Justice (DOJ) investigation into
price fixing in the broiler chicken industry. During April 2019, the company was served with
a grand jury subpoena related to the investigation. Management uncovered information in
connection with the investigation, which was
self-reported to the DOJ. For its cooperation,
the company has applied for leniency under the
DOJ's Corporate Leniency Program. If granted,
it would mean neither the company nor its employees will face prosecution. CP

Chief executive officer -
Samuel Dean Banks

Tyson Foods, Inc. net income

Tyson Foods, Inc. net sales

(fiscal years ended in September)

(fiscal years ended in September)

Tyson Foods share price
$100

$1,774

$3,024

$2,022

2017

2018

2019

in millions

in millions

$85
$70
$38,260

$40,052

$42,405

2017

2018

2019

$55
$40

110 \ October 2020

Oct. Dec.
2019

Milling & Baking News * Food Business News * Baking & Snack * Meat+Poultry * Pet Food Processing

Feb.
2020

Apr.

June

Aug.

Corporate Profiles



Corporate Profiles - 2020

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