‘Embarrassed’ Tyson Foods CFO apologizes to investors for arrest

Tyson Foods Inc. reported mixed fourth-quarter results Monday as chicken prices soared while beef slumped — but perhaps the most interesting part of the post-earnings conference call was Chief Financial Officer John Tyson’s comments about being arrested barely a month after starting the job.

“I’m embarrassed, and I want to let you know that I take full responsibility for my actions,” John Tyson said, according to a FactSet transcript. “I also want to apologize to our investors, as I have to our employees.”

Shares of the meat processor
whose brands include Tyson, Jimmy Dean, Ball Park and Hillshire Farms, dropped 2.9% in afternoon trading.

The apology follows the incident in which John Tyson was arrested early on the morning of Nov. 6 after being found sleeping in a house that wasn’t his. Tyson, who took over as CFO Oct. 2, was charged with criminal trespassing and public intoxication.

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“This was an incident inconsistent with our company values as well as my personal values,” Tyson said on the call.

Chief Executive Donnie King also commented, saying that the company takes the matter “seriously.”

“Tyson Foods has a strong, robust corporate governance process,” King said. “Our independent board of directors are overseeing a thorough review of this matter, and I’m confident in this independent process.”

There were no questions from analysts on the call about the incident, and it wasn’t mentioned again by Tyson or King.

Also on Monday, the meat processor reported fiscal fourth-quarter adjusted profit that missed expectations, while sales rose more than forecast. But the growth in cost of sales outpaced sales growth by a wide margin, leading to a sharp contraction in gross margin.

Overall volume for the quarter rose 2.1%, as increases in beef, chicken and prepared foods offset a decline in pork. And average prices rose 5.1% overall, as an 18.2% rise in the price of chicken and an 11.4% increase in prepared foods offset an 8.2% drop in beef prices and a 1.5% decline in pork.

“Our pricing actions, which offset the higher input costs, led to higher sales during the year,” CFO Tyson said on the post-earnings call.

It’s been a rather eventful few months for the producer of processed meats.

In early October, the company announced that it would relocate all of the employees at its corporate offices in downtown Chicago and in suburban Downers Grove, Ill., as well as in Dakota Dunes, S.D., to its world headquarters in Springdale, Ark.

The company said on Monday’s call that it was trying to help about 1,100 employees move to Arkansas, but it was unclear how many would actually make the move.

Also last month, a Washington state rancher was sentenced to 11 years in prison for stealing nearly $250 million from Tyson through a scam in which he sold the company more than 260,000 head of cattle that didn’t exist.

In late September, the company announced a reshuffling of its leadership team, with then-CFO Stewart Glendinning transitioning to group president of prepared foods and John Tyson taking over the CFO role, effective Oct. 2.

And in late August, the company disclosed that Chris Langholz, group president of international, had been terminated effective immediately. The company did not provide any reason for the firing.

Tyson’s stock has fallen 20.0% over the past three months, while the SPDR Consumer Staples Select Sector exchange-traded fund

has slipped 2.4% and the S&P 500 index

has eased 6.7%.

Source: https://www.marketwatch.com/story/embarrassed-tyson-foods-cfo-apologizes-to-investors-for-arrest-11668447501?siteid=yhoof2&yptr=yahoo