The local residential building sector continues its steady trek forward in March with the region’s four largest cities reporting new permits valued at $35.795 million, a 22.7% increase from March 2013.

Fayetteville, Springdale, Rogers and Bentonville cumulatively issued 139 permits for new homes last month. That was 28% more home starts than in the same period of 2013. The biggest year-over-year gains were in Springdale. The city issued 29 new home permits valued at $6.73 million, compared to 8 permits worth $2.5 million a year ago.

Bentonville and Fayetteville builders were also busier with $10.36 million and $10.51 million, respectively, in residential permit values last month. Permit values rose 21% and 6.3%, respectively.

Rogers issued 40 permits last month for new homes, which was three less than a year ago. Permits values dipped slightly to $8.16 million from $8.21 million in March 2013.

Builders surveyed by The City Wire in recent months expect steady business this year and several report homes selling so quickly they can’t keep inventory to show potential buyers.

The recent Skyline Report indicated a stable residential market, healthy in terms of the number of homes available and the number of perspective buyers. The report results for the second half of 2013 in Northwest Arkansas noted that the number of new houses that became occupied jumped by 60.7% over the number occupied in the first half of the year.

“The balance between absorption of the existing houses in new subdivisions and the small increase in building permit activity across Benton and Washington counties is exactly right,” said Kathy Deck, lead researcher for the Skyline Report at the Center for Business and Economic Research at the University of Arkansas. “We are seeing the market move forward without undue concern with oversupply that we have seen in the past.”

Tom Reed, analyst and partner in Reed and Associates, said the new home market has been vibrant for two years and there are some new residential developments and later stage developments on tap as many of the lots in the more desirable areas have been absorbed.

Reed agreed there are more builders active in the local market today, and some are those who took time off amid the downturn and a few others have come from outside the immediate area. He cautioned that builders and lenders need to restrain themselves as the economy continues to improve, so that supply does not outpace demand. For now, he said the market is balanced.

The local construction employment numbers have grown by 400 workers since March 2013, according to the Associated General Contractors of America Association.

“Much of the country experienced relatively robust growth in construction employment during the past year,” said Ken Simonson, the association's chief economist. “But the fact construction employment remains below prior peak levels in most areas shows just how hard hit the industry was during the downturn and how vulnerable it is to disruptions, such as a potential lapse in federal highway funding.”

COMMERCIAL SECTOR
The four Northwest Arkansas cities issued new commercial permits totaling $14.71 million, up 32% from a year ago. 

In Bentonville, the city granted permits to Big O Tire and a $3.2 million office technology building for an undisclosed business near the David Glass Technology Center for Wal-Mart Stores.

Rogers issued permits for a new Designer Shoe Warehouse at 2203 Promenade along with retail space for the GAP next door and three additions to medical offices near Mercy Hospital. Those permits totaled $2.254 million, up 16% from a year ago.

There were no sizable commercial permits for Fayetteville last month, but Springdale was active with the NanoMech announcement valued at $1.83 million (initial permit.) Har-Ber High School is getting a new football stadium, with that permit was valued at $1.43 million. A new O’Reilly’s Automotive is slated for 3043 Robinson, according to a permit valued at about $808,000.

The University of Arkansas at Fort Smith's Board of Visitors received an update Wednesday (April 30) on the university's planned new fitness center.

According to Dr. Lee Krehbiel, UAFS vice chancellor for student affairs, the university has narrowed the list of potential architects for the project, which will be funded through a $5 per credit hour fee approved by the University of Arkansas System Board of Trustees earlier this year.

"The committee (in charge of hiring an architecture firm) has been meeting. They've narrowed the proposals and we now have, I think, a top six — the top three of which will go forward in May to the Board for approval."

While the UA System Board has already approved the specific fee increase at its March meeting, which was held on the UAFS campus, it must still approve the UAFS overall tuition and fee structure for the upcoming school year, which Krehbiel called the final "hurdle."

"The one remaining hurdle, if you will, is that this will go to the UA System Board in May as part, again, of our overall tuition and fee request. And so at that point, if it goes through, that will solidify our ability to get the bonds out, hire the architects, begin work on a construction manager and hopefully then within a few months, we'd be looking at another groundbreaking."

UAFS held the groundbreaking for the new $15.5 million visual arts building on April 21. The building will be constructed along Waldron Road and Kinkead Avenue across from the Stubblefield Center.

The new fitness center is also part of the university's 20-year master plan, unveiled in October 2013. UAFS Chancellor Dr. Paul Beran said the master plan's overall price tag "in today's dollars" is around $200 million and calls for a variety of new projects and construction, with the focus of new construction being around the school's iconic bell tower.

As for why the university opted for building a new fitness center at this time, Krehbiel said it came down to the same problem UAFS has been facing for years — lack of space.

"We had a situation where while it functioned and continues to, we had multiple uses. Athletics uses the facility, academics uses the facility and general student population for recreation purposes uses the facility. So (sometimes) we literally had to close the fitness center so we could accommodate the class load in there. So it made it very difficult for students to even plan their workouts. So the need was pretty clear."

While no firm date has been set for a groundbreaking or an opening date and no cost estimates have been formally presented, Krehbiel said students who begin paying the fee during their academic careers at UAFS will be able to come back and use the facility upon its completion. It was a move, he said, that "leveled the playing field" and got more students to buy into the concept of a fee hike to pay for the facility.

In other business, Vice Chancellor for University Advancement Dr. Mary Lackie discussed naming opportunities for the new visual arts building. Naming rights for various rooms and locations throughout the new structure vary in donation to the university, from $5,000 up to $500,000.

Beran also noted that UAFS was in the process of restructuring the College of Education into a School of Education which would be under the university's STEM (Science, Technology, Engineering and Mathematics) programs. He said the move would better prepare the university's students to obtain math and science-based education degrees, with graduates in those fields being highly sought after in the education industry at a national level.

He said it was also part of the university's ongoing evaluations to see which colleges should be collapsed and moved into other colleges. According to Beran, such changes are "imminent in growing the efficiency" at the school.

Efforts to increase the minimum wage aren't just happening – or not happening – in the halls of Congress or the West Wing. A group in Arkansas is working to increase the state's minimum wage above the current federal rate.

The U.S. Senate on Wednesday (April 30) failed to pass a bill that would raise the federal minimum wage from $7.25 an hour to $10.10 an hour. The vote was 54 to 42, with Senate Leader Harry Reid, D-Nev., voting against the bill so he could re-introduce it later. The bill needed 60 votes to overcome a Republican filibuster. Even if the bill passes the Senate, it’s not likely to meet with approval in the GOP controlled U.S. House.

U.S. Sen. Mark Pryor, D-Ark., was not in Washington to vote on the bill because he was in Arkansas working on tornado recovery efforts. However, Pryor is in favor of raising Arkansas’ minimum wage.

“By giving a raise to the nearly 170,000 Arkansans who make minimum wage, our economy will get a much needed shot in the arm,” Pryor noted in a commentary on the issue. “I hear from Arkansas business owners all the time, and one of their main concerns these days is demand for their products. Better wages for workers means increased sales for small business owners as families have a little more each month to plug back into the economy.”

The current Arkansas minimum wage stands at $6.25 per hour, a dollar below the federal minimum wage of $7.25 per hour.

Stephen Copley, chairman of the Give Arkansas a Raise Now Coalition, said his organization is seeking signatures to place a minimum wage of $8.50 per hour on the November ballot.

The reason for moving for a move to $8.50 per hour versus the $10.10 per hour being pushed by President Barack Obama and recently passed by a handful of states, including Maryland, was due to one simple reason.

"It was the feasibility… what we thought might pass," he said. "There was a sense that something like $10.10 was not the sort of proposal Arkansans would pass, so we sat down and looked at what might politically pass in an initiative."

And while many in Arkansas are paid above the state's minimum wage because the federal minimum wage is a higher rate, Copley said a small number of the state's residents are still paid the $6.25 per hour rate, which equals only $13,000 per year based on a 40-hour work week.

"Basically (those workers fall under a) law passed in Arkansas in the 1960s," he said. "Anybody who works at a job that does not involve interstate commerce and the business makes less than $500,000 a year. If they are involved in interstate commerce, it falls under the federal (law) even if they make less money."

Senior Policy Analyst Eleanor Wheeler, who has authored a study for the Arkansas Advocates for Children and Families that supports a rise in the state's minimum wage, said there is a misconception that individuals earning minimum wage are just young high school or college students.

"Actually, 85% of minimum wage workers are at least 20 years old and earn at least half the income for their families," she said. "That's a big reason why it's important in Arkansas. These full-time workers are struggling to support their families and it gets harder each year because of increasing prices."

She said raising the minimum wage would help raise Arkansas families out of poverty, while having no negative impact on job growth and retention.

"For one thing, a lot of businesses who employ low wage workers are the bigger businesses who can absorb the increase in payroll," she said. "Even these small business will see the money coming back to them because if you put the money in the hands of people in the community, they'll spend in that community. It creates a cycle where it is good for business."

But Randy Zook, president and CEO of the Arkansas State Chamber of Commerce, said the opposite would be true.

"It will hurt employees," he said. "It will result in fewer people being hired, but I don't know that it will necessarily, in the long term, hurt employers. Employers will adjust their work teams to compensate for the increased pay and there will be fewer people hired."

And the Congressional Budget Office appears to back Zook's assertion.

According to a February report by the CBO, while a hike in the minimum wage would be a benefit to some employees and their families, it could have the exact opposite effect for others.

"But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly,"the report read in its summary.

And while Copley feels confident his group will successfully get the 62,507 signatures by July 7 to have the minimum wage increase appear on the November ballot, Zook said the State Chamber would likely stay out of the discussion since many of its members have not expressed any opinion one way or another, adding that many of its members pay above the minimum wage.

"At this point, there is so little interest or expression of concern. My guess is that we'll probably not express a position. That's not the final word, but at this point it appears unlikely."

Another bank has joined the growing web of lawsuits, counter complaints and pleas for judgment in the Dennis Smiley fraud saga. 

To date there have been seven banks file counter suits against Smiley, Arvest Bank and the other 20 lenders involved in loaning about $4.5 million to Smiley over the past four years.

First Bank (Hampton) filed its counter/cross complaint in Benton County Circuit Court on Wednesday (April 30). The bank is staking its claim for money loaned to Smiley beginning Oct. 9, 2013. 

The bank said it made a loan of $130,000 to Henry D. Smiley Jr., and nterest was to be paid monthly beginning Nov. 9. with the full balance due October 2014. As a condition of this loan Smiley pledged 4,264.33 shares of common stock in Arvest Bank Group, held in an investment account at Arvest.

First Bank received a signed Security Control Agreement with a power of sale for the collateral should the loan become delinquent. That Control Agreement was signed by Smiley and an Arvest executive vice president Jeb Mills, along with First Bank President Jon Harrell. 

On Oct. 31, 2013, First Bank made a second loan for $50,000 payable in 35 monthly installments with a balloon payment of the balance due October 2016. Smiley again used the Arvest stock as collateral for the loan, tied to the signed Control Agreement.

First Bank declared default under the terms of the two loans due to false or misleading information provided by Smiley during the loan process. Demand for payment was made, but the bank said it is still owed $130,000 on one loan and $49,000 owed on the other loan and interest is accruing on both loans at roughly $25 per day, according to the filing.

The bank asked the court for a judgment against Smiley the unpaid funds. First Bank also answered the Arvest interpleading and filed a claim against Arvest Bank Group noting that the Control Agreements signed by the intermediary for the bank are binding contracts that state Arvest had no knowledge of any other claim to the collateral — Smiley’s stock account. The agreement also states that if any other liens are found against the collateral they will be subordinate to First Bank’s position.

The bank said when Arvest liquidated Smiley’s account without notifying First Bank, it breached the contract signed by its intermediary Jeb Mills. First Bank asked the court to render judgment against Arvest Bank Group for the $180,000 secured by the collateral. They also ask for attorney’s fees and court costs related to this case.

Several of the 19 banks listed in Arvest’s interpleading have filed answers with the court. The exceptions include: Chambers Bank, First Western, Legacy National, Bank of Arkansas, Benefit Bank, Centennial Bank and Bank of the Ozarks.

Benton County Circuit Judge John Scott is expected to call a hearing in the next couple of weeks to begin sorting out the pile of claims against Smiley and his former employer.

Rodney Shepard, a former top officer with Arvest Bank operations in the Fort Smith area, is returning to be the new president and CEO of Arvest Bank of Fort Smith. He is now the head of Arvest Bank operations in Springfield, Mo., and will begin his new role on June 1.

Shepard spent 17 years working in the Fort Smith area banking business prior to his promotion in January 2011 to Springfield.

“We are looking forward to having Rodney back in the Fort Smith community,” Arvest Bank regional executive Cliff Gibbs said in a statement. “He played a vital role during his tenure in Fort Smith prior to leading the team in Springfield. Rodney understands the Arvest culture and will hit the ground running upon his return to the community that he loves and supports.”

Shepard has been busy in Springfield. He has led the growth of Arvest in what is a relatively new market for the bank. The growth included six new branch banks for a total of 13 in the market. Staff at the bank also doubled during his tenure, according to Arvest.

Arvest Bank operates more than 260 bank branches in Arkansas, Oklahoma, Missouri and Kansas through a network of 16 locally managed banks, each with its own board and management team. These banks operate in more than 120 communities.

FAMILY TIES, ECONOMIC FACTORS
Shepard told The City Wire that the decision to return to Fort Smith was tough because his family had grown to love the Springfield area. However, he and his wife Lisa have a majority of their families living in the Fort Smith area. The family ties were a big part of the decision, he said. Shepard and his wife have two children.

“We like this area up here. This is really a great place to live. We had settled, found a good church, really got involved in the community up here, but at the end of the day, when that opportunity opened up, the family piece was part of the decision for us to come back,” Shepard explained.

Shepard also acknowledged that part of his decision involved an economic comparison of the two regions. The Springfield metro area has a larger nonfarm labor force (202,4000 as of March 2014) than the Fort Smith area (116,600 as of March 2014). Also, the Springfield metro area jobless rate has been at or below 7% for more than two years, with several months during that period of monthly jobless rates below 6%. The March rate was 6.1%. Prior to March, the Fort Smith metro area had 62 consecutive months that the jobless rate was at or above 7%. The March rate fell to 6.9%.

“It did,” Shepard said when asked if the relative weakness of the Fort Smith area was a factor in the decision. “It is true that Springfield has a healthier economy. ... But as I visited with our (Fort Smith area bank) directors, I asked them about the economy ... and they feel positive about Fort Smith’s outlook.”

Shepard said his positive economic outlook is based on the Fort Smith region having good infrastructure – rail, roads, waterway, air – in place.

Also, Arvest has a larger customer base and operations in the Fort Smith area than it now does in the Springfield market. Shepard said that was a draw for him, too.

“But this (Springfield) is a great place to live ... and at some point I believe our company will have a larger operation here and will continue to grow here. This has been a wonderful experience here, and I hate to leave, but I think that everyone understands,” Shepard said.

BACKGROUND
Shepard earned an associate’s degree from Carl Albert State College, a bachelor’s degree from Northeastern State University and a master’s degree from Webster University. He also is a graduate of the Mid South School of Banking and completed the ABA Commercial Lending School, and Graduate School of Banking program at Louisiana State University. Carl Albert State College also honored him with its Distinguished Alumni Award.

During his time in Springfield, Shepard served on the board of directors for the Missouri Bankers Association, United Way of the Ozarks, and the Public Utilities for the City of Springfield. He is a graduate of the Leadership Springfield program and a member of the Springfield Southeast Rotary Club.

Shepard was active in the Fort Smith area during his previous time there. Groups with which he worked with include the Single Parent Scholarship Fund, advisory council for Young Emerging Leaders of the Fort Smith Chamber of Commerce, a council member for the 188th Fighter Wing in Fort Smith, River Front Blues Society, Fort Smith Area United Way, and the Old Fort River Festival. He also is a graduate of Leadership Fort Smith.

Home sales in Arkansas four largest metro areas during the first quarter of 2014 are up almost 3% compared to the same period of 2013, but the average per home sales price is down more than 3% and the total value of homes sold in those markets is also down for the quarter.

The Fort Smith region was the only one of Arkansas’ four largest metro areas to post a gain in home sales and total sales amount during March.

According to The City Wire’s Arkansas Home Sales Report, there were 4,229 homes sold in the four markets for the first three months of 2014, up 2.97% compared to the 2013 quarter, and up 12.18% compared to the same quarter in 2012.

The City Wire’s Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties within the state’s four largest metro areas — Central Arkansas, Fort Smith area, Jonesboro/Northeast Arkansas and Northwest Arkansas. The report, which records closed sales, accounts for between 70% and 75% of total Arkansas home sales. The report is sponsored by Fort Smith-based Weather Barr.

Average home prices in the four markets for the quarter was $153,959, down from the $159,286 during the same quarter in 2013, and just above the $153,425. The value of the homes sold in the four markets during the quarter totaled $651.091 million, down 0.47% compared to the same quarter in 2013, but up 12.57% compared to the 2012 quarter.

MARCH NUMBERS
March home sales totaled 1,625, down 3.62% in the four markets. The average price per home in the four markets was $158,996, down 2.64% compared to March 2013, but up 3.36% compared to March 2012.

There were 735 homes sold in central Arkansas, down 5.04% compared to March 2013, and up 9.7% compared to March 2012.

March home sales totaled 576 in Northwest Arkansas, down 6.8% compared to March 2013, and up 5.49% compared to March 2012.

Jonesboro area home sales totaled 153, down 0.65% compared to March 2013 and down 12.07% compared to March 2012.

In the Fort Smith area, home sales totaled 161, up an impressive 15% compared to March 2013, and up 12.59% compared to March 2012.

The value of the sales during March were down 6.23% in central Arkansas, down 5.3% in Northwest Arkansas, down 23.13% in the Jonesboro area, and up 9.02% in the Fort Smith region.

THE REGIONAL PICTURE: 2014
Central Arkansas — Home sales
Jan.-March 2014: 1,975
Jan.-March 2013: 1,926
Jan.-March 2012: 1,769

Fort Smith area — Home sales
Jan.-March 2014: 388
Jan.-March 2013: 333
Jan.-March 2012: 346

Jonesboro area — Home sales
Jan.-March 2014: 443
Jan.-March 2013: 390
Jan.-March 2012: 392

Northwest Arkansas — Home sales
Jan.-March 2014: 1,423
Jan.-March 2013: 1,458
Jan.-March 2012: 1,263

The top five counties in terms of Jan.-March 2014 home sales:
Benton — 896, down compared to 912 in 2013
Pulaski — 888, up compared to 869 in 2013
Washington — 527, down compared to 546 in 2013
Craighead — 346, up compared to 305 in 2013
Saline — 337, up compared to 305 in 2013

Link here for a PDF document of the March 2014 data.

‘LIFE IS GOOD’
Jennifer Zunino, a Realtor with Coldwell Banker Rector Phillips Morse in Maumelle, said she has noticed stricter credit requirements are preventing many first-time home buyers from entering the market. The increase in sales in her area is largely from repeat buyers.

“Second-time buyers are happening right now. ... We're not seeing many first-time buyers,” she said, adding that lower priced homes in Pulaski County aren't moving as fast as those priced in the $200,000 to $300,000 range. “People are upgrading.”

She said prices have stabilized for many to the point that those home owners who owed more money on their homes than they were worth a few years ago are discovering they have equity in their houses. Home owners with equity, then, are more likely to sell their houses and “upgrade” than those who do not.

Sheryln Blackwell of Fred Dacus Associates in Jonesboro (JonesboroRealEstate.com) said her market has clearly recovered from the downturn of a few years ago.

“Three closings today,” she said on Wednesday. “Life is good.”

She said the bulk of the buyers she works with are repeat customers who are “moving on up” by going to larger homes. However, she said her office has no shortage of first time buyers, adding there are more credit issues than there used to be and that is why developing good relationships with lenders so prospective buyers have options is essential in today's market.

“I'll find a way to get them financed,” Blackwell said.

‘DEMAND IS STILL GOOD’
The City Wire Economist Jeff Collins said there's a reason Realtors are optimistic about the current market.

“I think that what you see is a recovered and stabilized housing market,” he said, adding that the market is not undergoing a record-setting pace, but conditions have definitely improved.

“The volumes are solid,” he said. “Not spectacular, but solid. … Demand is still good.”

He noted that March numbers are down, but said that can be a function of many things including ice and snow as a result of an unusually cold winter in Arkansas. A good number of March closings are the result of contracts entered into during February and January – months that featured ice, snow and frigid temperatures.

Collins said average prices are trending downward, but that comes as no surprise. He said interest rates are going up but incomes have remained fairly unchanged. As upticks in interest rates lead to higher monthly payments, Collins said there's not much people can do but buy less expensive homes than they would have when rates were lower – that same monthly payment won't go as far now as it did even a few months ago.

Jim Long, an agent with Crye-Leike Real Estate in Bentonville, said he didn’t close any properties in March, but he did put two listings under contract and he had several closings in the prior two months.

“There is ample buyer demand. When the sun comes out consumers are eager to look and purchase. But these off-and-on winter storms have kept things a little off balance lately.” Long said. “On the whole, I’m off to a better start than last year.”

Agents agree the metrics in the local market are good for buyer and sellers right now. Interest rates are quite low around 4.19% APR.

INVESTMENT PUSH
Long said home prices are continuing to rebound, though not as fast as many sellers would like. He just put a home under contract in West Fayetteville for a couple that had looked at more than 20 properties. The one they bought was on the market just two days and it sold for almost full asking pricing, Long added.

According to Principal Broker/Owner Pat Satterfield of Pat Satterfield Real Estate in Alma, one of the biggest drivers for the Fort Smith area market is the rural development loans that were renewed as part of a recently-passed farm bill. She also said the real estate market is being helped by investors looking for a better return on their money.

"They can't get anything on their invested money," she said. "So a lot of people are investing in real estate. I'm seeing that more than anything. They'll have that money in a C.D. and spend it on real estate where they get more on their money.”

The first quarter financials for ArcBest Corporation (formerly known as Arkansas Best Corp.) were not as good as analysts expected thanks to a pension settlement charge and the estimated negative impact of severe winter weather during the quarter.

The transportation holding company reported a loss of $5.2 million during the quarter, or a per share loss of 20 cents, more than double the 8 cent per share that was the consensus estimate of the 15 analysts who watch the company. However, without a $2.9 million pension settlement charge, the loss would have been 11 cents per share.

Also, the loss was better than the $13.395 million loss the company recorded in the first quarter of 2013.

Total revenue during the quarter was $577.904 million, 10.98% better than the first quarter of 2013 and well ahead of the consensus estimate of $551.35 million.

Winter weather during the quarter shaved $10.5 million off the operating income tally, according to a company estimate. Factoring our weather and the settlement charge, the company would have been in the black during the quarter.

“The estimated operating income impact of first quarter severe weather at ABF Freight was approximately $10.5 million. ABF Freight’s pre-tax first quarter pension settlement charges equaled $2.9 million. Thus, ABF Freight’s $12.2 million reported first quarter 2014 operating loss was adversely affected by the $13.4 million total of these two items. Excluding these items, ABF Freight would have generated an operating profit in this year’s first quarter compared to a $22.5 million operating loss in the first quarter of 2013,” the company explained in the earnings report issued Thursday (May 1) after the markets closed.

Despite the weather, tonnage was up 5.4% during the quarter and the number of shipments were up 3.4%. Company officials have said the tonnage could have been up 7% during the quarter if not for the snow and ice storms in many parts of their network.

ArcBest President and CEO Judy McReynolds said all segments of the company performed well during the quarter even with the bad weather, which she said will result in more future business.

“This was a challenging quarter for our industry as severe weather across the nation disrupted operations,” McReynolds said in the statement. “Excluding that impact, our companies performed well, with ABF Freight overcoming the previous year’s loss, Panther posting strong operating profit and FleetNet experiencing record business levels on many days. Our improved success in offering customers holistic solutions and one-stop shopping for a variety of logistics challenges is helping distinguish us in the marketplace. This provides additional opportunities to enhance the relationships we have with existing customers.”

The non-asset based businesses in the ArcBest portfolio generated $4.459 million in operating income during the quarter, a big improvement over the $134,000 during the first quarter of 2013.

The tough first quarter follows a positive financial performance in 2013. Net income during 2013 for ArcBest was $15.8 million, much better than the $7.7 million loss in 2012 and the most the company has earned in a year since 2008. The per share earnings of 59 cents also blew past the consensus estimate of 47 cents per share.

SEGMENT NUMBERS Q1 2014
ABFFreight
Operating income
2014 (January-March): –$12.184 million
2013 (January-March): –$22.549 million

Premium Logistics (Panther)
Operating income
2014 (January-March): $3.364 million
2013 (January-March): –$864,000

Domestic/Global transportation management (ABF Logistics)
Operating income
2014 (January-March): $535,000
2013 (January-March): $518,000

Emergency/preventative maintenance (FleetNet)
Operating income
2014 (January-March): $1.401 million
2013 (January-March): $711,000

Household goods moving (ABF Moving)
Operating income
2014 (January-March): –$841,000
2013 (January-March): – $231,000

Company shares (NASDAQ: ARCB) closed Thursday at $40.57, a gain over the opening price of $39.55, and a new 52-week high for the stock. Prior to Thursday, the share price has ranged from a $39.79 high to a $9.67 low during the past year.

Gains in the number of employed and a 3.7% decline in the number of unemployed helped push the Northwest Arkansas metro jobless rate down to 5.4% in March compared to 5.6% in February and 5.7% in March 2013.

Metro employment of 222,341 was up from the 220,952 in February, and a healthy gain over the 218,826 in March 2013, according to figures released by the U.S. Bureau of Labor Statistics.

March marked the eighth consecutive month that the NWA metro jobless rate has been below 6%. The metro area is the only one in Arkansas to post a rate below 6%.

The size of the Northwest Arkansas regional workforce during March was estimated at 234,966, up from the 233,960 during February, and above the 231,940 during March 2013. June 2013 was the first month the region’s workforce topped 240,000. The average annual monthly labor size was 234,412 in 2013, 234,792 during 2012, 229,950 during 2011 and 226,593 during 2010.

All of the eight metro areas in or connected to Arkansas had a jobless rate decline in March compared to February, and had jobless rate declines compared to March 2013. During March, the lowest metro jobless rate in the state was 5.4% in Northwest Arkansas and the highest rate was 9.4% in the Pine Bluff area.

NWA METRO NUMBERS
Following are other key figures from the BLS metro report.
Unemployed persons in the region totaled 12,625 during March, down from the 13,008 during February and below the 13,114 during March 2013.

The Northwest Arkansas manufacturing sector employed an estimated 26,300 in March, up from 26,200 in February, and down from the 26,600 during March 2013. Sector employment is down 21.7% from more than a decade ago when March 2004 manufacturing employment in the metro area stood at 33,600.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 48,200 in March, up from 47,700 during February, and up from the 47,600 during March 2013. The sector reached record employment of 50,500 in December 2006.

Employment in the region’s tourism industry was 21,500 during March, up from 20,900 in February and up from 20,500 during March 2013. Employment in the sector set a record of 22,000 in June 2013.

In Education & Health Services, employment was 24,700 during March, unchanged compared to February and up from 24,000 during March 2013.

In the Government sector, employment was 32,700 during March, up from 32,500 in February and up compared to 31,800 during March 2013.

NATIONAL NUMBERS
Unemployment rates were lower in February than a year earlier in 333 of the 372 metropolitan areas, higher in 30 areas, and unchanged in nine areas, noted the broad BLS report.

The U.S. unemployment rate in March was 6.7%, down from 7.5% from a year earlier. Arkansas’ jobless rate was 6.9% in March, down from 7.1% in February and down from 7.4% in March 2013.

Oklahoma’s jobless rate during March was 4.9%, down from 5% in February, and down compared to 5.2% in March 2013. The Missouri jobless rate during March was 6.7%, up from 6.4% in February and up from the 6.6% in March 2013.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
March 2014: 5.4%
February 2014: 5.6%
March 2013: 5.7%

Fort Smith
March 2014: 6.9%
February 2014: 7.6%
March 2013: 8.1%

Hot Springs
March 2014: 7.1%
February 2014: 7.7%
March 2013: 7.8%

Jonesboro
March 2014: 6.6%
February 2014: 7.1%
March 2013: 7.1%

Little Rock-North Little Rock-Conway
March 2014: 6.3%
February 2014: 6.7%
March 2013: 6.8%

Memphis-West Memphis
March 2014: 8.2%
February 2014: 8.4%
March 2013: 9.4%

Pine Bluff
March 2014: 9.4%
February 2014: 10.1%
March 2013: 9.8%

Texarkana
March 2014: 6.5%
February 2014: 7.3%
March 2013: 7%

NORTHWEST ARKANSAS METRO AREA HISTORY
Past annual average unemployment rates
2013: 5.7%
2012: 5.6%
2011: 6.2%
2010: 6.4%
2009: 6.2%
2008: 4.1%
2007: 3.8%
2006: 3.6%
2005: 3.3%
2004: 3.8%
2003: 3.7%
2002: 3.3%
2001: 3%
2000: 2.9%

The good news is that the Fort Smith metro jobless rate during March was 6.9%, the first time in 62 consecutive months the rate has been below 7%. The not-so-good news is that the rate decline is not a product of sizeable gains in the workforce or the number of employed.

In fact, the reported metro labor force has shrunk more than 8% compared to the high point hit in June 2007.

A 6.9% metro jobless rate was better than the 7.4% in February and much better than the 8.1% in March 2013. A drop in the reported number of unemployed was the primary cause for the March jobless rate decline to 6.9%.

Fort Smith metro employment of 119,565 was slightly better than the 119,155 in February, and almost flat compared to the 119,346 in March 2013, according to figures released by the U.S. Bureau of Labor Statistics.

All of the eight metro areas in or connected to Arkansas had a jobless rate decline in March compared to February, and had jobless rate declines compared to March 2013. During March, the lowest metro jobless rate in the state was 5.4% in Northwest Arkansas and the highest rate was 9.4% in the Pine Bluff area.

FORT SMITH METRO NUMBERS
The size of the Fort Smith regional workforce during March was 128,463, down from 128,695 during February, and down from the 129,880 during March 2013. The labor force reached a revised high of 140,253 in June 2007.

Unemployed persons in the region totaled an estimated 8,898 during March, down from the 9,540 during February, and well below the 10,534 during March 2013.

The Fort Smith area manufacturing sector employed an estimated 18,200 in March, unchanged compared to February, and unchanged compared to March 2013. Sector employment is down almost 36% from a decade ago when March 2004 manufacturing employment in the metro area stood at 28,400. Also, the annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 24,100 in March, up from the 24,000 in February, and above the 23,600 during March 2013. Employment in the sector reached a high of 25,700 in December 2007.

Employment in the region’s tourism industry was 9,300 during March, up from 9,000 in February and above the 9,000 in March 2013. The sector reached an employment high of 9,800 in August 2008.

In Education & Health Services, employment was 16,500 during March, up from 16,400 in February and below the 17,000 during March 2013. Annual average monthly employment in the sector has steadily grown since 2005 when it reached 14,000. In 2012 the average was 17,000, but fell slightly to 16,800 in 2013. Employment in the sector reached a record 17,300 in October 2012.

In the Government sector, employment was 19,600 during March, up from 19,400 in February and up from 19,400 in March 2013.

NATIONAL NUMBERS
Unemployment rates were lower in February than a year earlier in 333 of the 372 metropolitan areas, higher in 30 areas, and unchanged in nine areas, noted the broad BLS report.

The U.S. unemployment rate in March was 6.7%, down from 7.5% from a year earlier. Arkansas’ jobless rate was 6.9% in March, down from 7.1% in February and down from 7.4% in March 2013.

Oklahoma’s jobless rate during March was 4.9%, down from 5% in February, and down compared to 5.2% in March 2013. The Missouri jobless rate during March was 6.7%, up from 6.4% in February and up from the 6.6% in March 2013.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
March 2014: 5.4%
February 2014: 5.6%
March 2013: 5.7%

Fort Smith
March 2014: 6.9%
February 2014: 7.6%
March 2013: 8.1%

Hot Springs
March 2014: 7.1%
February 2014: 7.7%
March 2013: 7.8%

Jonesboro
March 2014: 6.6%
February 2014: 7.1%
March 2013: 7.1%

Little Rock-North Little Rock-Conway
March 2014: 6.3%
February 2014: 6.7%
March 2013: 6.8%

Memphis-West Memphis
March 2014: 8.2%
February 2014: 8.4%
March 2013: 9.4%

Pine Bluff
March 2014: 9.4%
February 2014: 10.1%
March 2013: 9.8%

Texarkana
March 2014: 6.5%
February 2014: 7.3%
March 2013: 7%

FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates
2013: 8%
2012: 7.7%
2011: 8.3%
2010: 8.2%
2009: 7.9%
2008: 4.8%
2007: 5.3%
2006: 4.9%
2005: 4.5%
2004: 5.2%
2003: 5.5%
2002: 5%
2001: 4.2%
2000: 3.7%

The stars have been aligned for Tyson Foods this past year and the meat giant is expected to produce another record quarter when it reports earnings on Monday (May 5) with estimated net income of $223 million. This would be a nice rebound from the $95 million reported in the year-ago period.

Wall Street analysts expect 63 cents per share for the three months ending March 31. If they hit that estimate it would be a 75% gain in net earnings, which would likely come on the strength of higher chicken prices and reduced grain costs.

Tyson Foods competitor Pilgrim’s Pride reported an 80% turnaround in its profits on Thursday (May 1), a good sign for Tyson investors as the two companies run similar chicken operations, analysts said.

Tyson Foods CEO Donnie Smith recently said more consumers are moving to chicken because of its value compared to escalating beef prices. That has spurred chicken production across the industry and total pounds processed are expected to be 3% more this year. But that uptick in production doesn’t bother Smith.

“When you look at the halo effect, you’ve got very high beef prices, record high pork prices and chicken is very cheap, relatively speaking. ... It doesn’t worry us at all to have an increase in supply of let’s call it 3% or so because the demand is going to be there to absorb that,” Smith said during a recent investor conference in New York.

Smith also said consumers can expect higher meat prices across the board this year, and food service customers are on shorter contracts to mitigate the risk of prices fluctuations related to grain and other input costs.

Tyson is expected to report $8.85 billion in sales revenue for the quarter, a 5.10% gain from the same period last year, according to Wall Street consensus. Analysts expect Tyson to report solid gains in its chicken segment, with losses in its red meat business. 

Steve Kay, publisher of Cattle Buyers Weekly, said beef packers had a tough quarter. He said packers are experiencing their toughest operating climate in several years. He said packer margins were negative for the entire quarter ending March 31 and they stayed in the red in April as well. 

“Live cattle prices are going to have to go lower before packers can resume profitable margins,” Kay said. “Packers and retailers are hoping consumers will step up to the plate and buy beef as the summer grilling season will kick off this weekend. I can tell you that retailers will likely feature less beef this year and consumers may not want to pay $9 to $10 per pound for a choice steak. Packers may not be able to pass along the higher live cattle costs they are experiencing.”

Kay expects beef processing margins to be below the normalized range this year and next year as the cattle supply continues to tighten. 

He said the run up in pork prices related to the PED virus has been irrational. On the consumer side, pork prices are already up 8% this year and they are expected to jump another 10% to 12% in the back half of this year, according to the National Pork Council.

Kay said it is unclear if the virus impact has peaked and he expects more pork to hit the market and prices to remain high. Smith said Tyson will try to pass along those higher costs to consumers and its food service customers.

STOCK DOWNGRADE
Investors of Tyson Foods have experienced an exceptional rise in value over the past year as share prices are up 73% from 2013.

The hefty rise prompted a rating downgrade by BMO Capital this week, from a “buy” to a “hold” position. BMO has a $43 price target for Tyson stock, and with the shares closing Thursday (May 1) at $42.41, BMO said its downgrade is a “mission accomplished” note, and not “Houston, we have a problem.”

Tyson is priced at 18 times earnings, but projected to grow at only 7% over the next five years. Tyson shares look more than fully valued, according to Motley Fool analyst.

Tyson shares (NYSE: TSN) closed Thursday (May 1) at $42.41, up 44 cents. During the past 52 weeks the share price ranged from a $44.24 high to a $23.39 low.

Sales tax collections for the city of Fort Smith were down in city and county sales taxes for the first quarter of the year.

Each of the city's 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.635 million in the March report, up 1.24% from the same period in 2013.

Sales tax collections in the March report were 2.96% below budget estimates. (Because the state of Arkansas has a two-month delay in reporting collections back to the cities, the city of Fort Smith — for budgeting purposes — has historically reflected the collections on a one-month delay. Which is to say, the tax collections remitted to cities in March are from taxes collected in January and transferred by merchants to the state in February.)

Collections so far in the 2014 reporting period of the two 1% taxes were $8.709 million, while the same period in 2013 saw collections of $8.821 million. The same period in 2012 saw $10.234 million and $9.561 million in 2011.

Total collections in the year 2013 of the two 1% taxes were $38.937 million. Collections in 2012 of the two 1% taxes totaled $39.21 million, slightly ahead of the $38.683 million during 2011. The 2011 collections were 3.9% above 2010 collections.

Fort Smith's share of the county 1% sales tax in the March report was $1.294 million, up 2.75% from last year's total during the same period of $1.259 million. The collection was up 2.27%, or $28,672, compared to the revenue estimate of $1.265 million for the month.

The countywide tax generated $15.353 million for Fort Smith during 2013, up 0.49% compared to 2012 and down 1.99% compared to budget forecasts. The countywide tax generated $15.279 million in 2012, just ahead of the $15.15 million in 2011, but lower than the peak collection of $16.61 million in 2008.

The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general budget of roughly $42 million. A majority of the general fund budget supports fire, police and other critical city functions. The dip in collections compared to budget estimates has resulted in city officials seeking 4% budget cuts from all departments.

POSSIBLE BUDGET CUTS
Following last month's report that showed a decline in sales tax revenues, the question was posed to Deputy City Administrator Jeff Dingman about whether the city would implement budget cuts across all of the city's departments.

He said at the time that it was too early to tell whether cuts were necessary.

"With just two months here in the bank, I don't know that we're ready to start making those decisions at this point. Like I said, we did it in April and May time frame (last year)," he explained. "As far as a set benchmark where we say we need to change something, I don't know that we have a set threshold."

In her Thursday (May 1) report, Bushkuhl did not push for any major cuts since franchise fee collections were up, though she said two departments may need to cut budgets to stay in line with revenues.

"Although the sales taxes are still below budget, the additional franchise fee revenues cover the shortfall and there does not need to be an adjustment to the General Fund budget at this time," she said. "The fire and parks department programs that are supported by the ¼% sales tax may need to adjust their budgets by approximately $23,000 if the sales tax trend continues. This reduction is less than 1% of each program’s budget for the year."

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2013: $38.937 million
2012: $39.210 million
2011: $38.683 million
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million

Fort Smith portion of 1% countywide sales tax
2013: $15.353 million
2012: $15.279 million
2011: $15.15 million
2010: $14.89 million
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million

Wal-Mart is a logistics leader that revolutionized the supply chain years ago with its distribution center system. But now that the retail giant is experimenting with small convenience formats and tethering to its supercenters for replenishment, there may be more business opportunities for third party suppliers, according to Kantar Retail.

Dan Sanker, CEO of Santa Monica, Calif.-based CaseStack, said the new formats and tethering opportunities have caught his interest given that his firm already handles consolidation logistics for Wal-Mart, suppliers and other retailers.

Walmart U.S. CEO Bill Simon said in March that the retailer is testing tethering smaller formats to its nearby supercenters in addition to using them for online fulfillment. The retailer is tethering its Walmart to Go in Bentonville – its new convenience store concept – to the supercenter down the street. The Express store in Gentry is tethered to a supercenter in nearby Siloam Springs and the Walmart on Campus at the University of Arkansas is tethered to a supercenter in Fayetteville.

According to Wal-Mart execs, the concept of tethering fits within Wal-Mart’s sustainability plans, which leads analysts to think the concept will be expanded.

Sanker can envision roughly 10,000 square feet of space in a supercenter that is carved out for storing added inventory — a mini warehouse of sorts. He said small trucks could run routes from the supercenter to the small format and for home delivery for online or bulky items.

Tethering several smaller stores to a supercenter will mean the retailer has to figure out ways to store the extra product and then make sure the items get to their final destination, because they won’t be loaded on full semi-trucks coming from the distribution center.

Wal-Mart store associates already have a full slate just handing the normal inventory for their supercenters and tethering will add additional work that could be outsourced to third party logistics firms.

Sanker said tethering gives Wal-Mart an opportunity to share its labor costs. He said his firm already has a software program that helps track products up and down the supply chain, which will be important for suppliers given more possible destinations for their items. He said that software also allows for consolidating orders and pallet customization, which will be important at the store level for orders bound for smaller formats. 

Analysts at Kantar said Wal-Mart is leveraging its physical size to its advantage with this tethering plan. But ultimately the retailer also has to figure out how to best operate in an omni-channel environment, which means managing the different requirements of online fulfillment, at home delivery and free pickup at a nearby location.

Wal-Mart has not provided details about how it will accomplish the tethering plan with entire ecosystems which are being rolled out this year. The retailer answered one question on Wednesday (April 30) when it confirmed a mini-fulfillment center to be built in Bentonville this year for online grocery orders. This concept is grocery only and does not include home delivery, but offers scheduled pick-up times with drive-in service.

Sanker said there is no magic bullet solution for handling the logistics around omni-channel retail, but if Wal-Mart figures out how to use it massive physical scale to its advantage, other retailers will follow.

Details on the lack of financial literacy in Arkansas, positive recovery for U.S. Sen. John Boozman, death penalty difficulties and a ‘click-and-collect’ Wal-Mart site in Bentonville are part of the Northwest Arkansas Friday Wire for May 2.

NOTES & ANALYSIS
• Miserable money managers
It’s a good thing Arkansas has a Constitutional requirement to balance the state budget, because our collective understanding of finances is so small that only the Large Hadron Collider could measure it.

A recent study by WalletHub found that Arkansas ranks 50 out of the 51 places studied (50 states and the District of Columbia) in the United States. The study that looked at education efforts in financial literacy, high school dropout rates, percentages of people with college degrees, the unbanked and those who borrow from non-bank lenders.

The City Wire talked to several folks around the state to see if they might refute the horrible WalletHub finding. No such luck. Dr. William Bailey, a professor at the University of Arkansas, was not surprised to see the state rank just a step above the bottom. Dr. Ed Bashaw, dean of the College of Business at Arkansas Tech University, also was nonplussed by the study. He said it’s a generational problem. Poor folks often don’t have the time, intelligence or desire to discuss their poor financial situation with their children.

Keith Weigelt, a professor at the prestigious Wharton School at the University of Pennsylvania, said high schools around the country need to do a better job of teaching financial management. But he doesn’t see that happening.

“This is a life skill. These high schools, these schools are failing to understand this is a life skill. The sooner you can know about finances, investing and so forth the better off you will be, but with all this emphasis on standardized testing, they just don’t have time for it. Financial literacy should definitely be included in public school curricula,” Weigelt said in the WalletHub report.

It’s a sad possibility that Weigelt is correct. We’ll have the most tested students in the world, but just don’t ask them how a mortgage works or what they are really paying for that rent-to-own big screen television.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• Wal-Mart sustainability push
Partnering for a greener world was the theme of Wal-Mart’s Sustainability Expo event held Tuesday (April 29) in Rogers. The retail giant assembled a cast of global suppliers, environmental advocates, supply chain experts, farmers and ranchers for the three-day event.

• Positive recovery
Less than a week after an emergency surgery to fix an aortic dissection, U.S. Sen. John Boozman, R-Ark., has returned home and has instructed his staff to work to help with tornado damage recovery in central Arkansas.

• Tornado recovery help
Two Northwest Arkansas corporate giants are among the first to mobilize their troops to help when a natural disaster damages a community. That’s exactly what happened within hours of the Sunday night (April 27) tornado damage in central Arkansas and other parts of the country.

NUMBERS ON THE WIRE
$35.795 million: Total value of building permits issued in March by Bentonville, Fayetteville, Rogers and Springdale. The total was up 22.7% compared to March 2013.

10,000: Estimated number of items – fresh and dry grocery goods – to be available in the grocery pick up depot Wal-Mart plans to build in Bentonville. The retail giant has tested the pick up center in 11 stores in the Denver area.

16%: Percentage of Arkansas drivers without auto insurance coverage, one of the highest uninsured percentages in the nation, according to the Insurance Research Council.

OUTSIDE THE WIRE
• This is what Amazon's Smartphone will look like
The phone will make use of a data plan called "Prime Data," and while the details on it are far from totally known, it's expected to piggyback on AT&T's "Sponsored Data" program. Sponsored Data allows companies to subsidize your data use, paying for the data you consume inside certain apps and services — the data used inside of certain apps effectively doesn't count against your data plan. This might mean that Amazon could offer unlimited data for music and video streaming, but this is still speculative.

• A new rule on home care workers’ wages
A new rule from the Obama administration designed to provide better pay and working conditions to 2 million home care workers is forcing many states to rethink how they look at Medicaid payments and may result in higher Medicaid costs.

WORD ON THE WIRE
“Poverty is generational and with a lack of education the cycle continues. And in terms of non-bank lending, sometimes it may be cheaper to borrow from a payday lender than bounce several checks. But, once they borrow like that it’s easy to become enslaved.”
– Dr. Ed Bashaw, dean of the College of Business at Arkansas Tech University, in explaining how Arkansas ranks so poorly in terms of financial literacy

“I think the litigation challenges that we’re facing now on lethal injection would be exponentially increased if we attempted an electric chair [execution]. Take the policy out of it – whether it’s a good idea or a bad idea or whether it’s barbaric or whatever – I don’t think you could ever get to the legal point where a federal court would let us use the electric chair.”
– Arkansas Attorney General Dustin McDaniel, about problems with Arkansas’ death penalty rules

Details on the lack of financial literacy in Arkansas, positive recovery for U.S. Sen. John Boozman, death penalty difficulties and a new name for the transportation artists formerly known as Arkansas Best Corporation are part of the May 2 Friday Wire for the Fort Smith region.

NOTES & ANALYSIS
• Miserable money managers
It’s a good thing Arkansas has a Constitutional requirement to balance the state budget, because our collective understanding of finances is so small that only the Large Hadron Collider could measure it.

A recent study by WalletHub found that Arkansas ranks 50 out of the 51 places studied (50 states and the District of Columbia) in the United States. The study that looked at education efforts in financial literacy, high school dropout rates, percentages of people with college degrees, the unbanked and those who borrow from non-bank lenders.

The City Wire talked to several folks around the state to see if they might refute the horrible WalletHub finding. No such luck. Dr. William Bailey, a professor at the University of Arkansas, was not surprised to see the state rank just a step above the bottom. Dr. Ed Bashaw, dean of the College of Business at Arkansas Tech University, also was nonplussed by the study. He said it’s a generational problem. Poor folks often don’t have the time, intelligence or desire to discuss their poor financial situation with their children.

Keith Weigelt, a professor at the prestigious Wharton School at the University of Pennsylvania, said high schools around the country need to do a better job of teaching financial management. But he doesn’t see that happening.

“This is a life skill. These high schools, these schools are failing to understand this is a life skill. The sooner you can know about finances, investing and so forth the better off you will be, but with all this emphasis on standardized testing, they just don’t have time for it. Financial literacy should definitely be included in public school curricula,” Weigelt said in the WalletHub report.

It’s a sad possibility that Weigelt is correct. We’ll have the most tested students in the world, but just don’t ask them how a mortgage works or what they are really paying for that rent-to-own big screen television.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• Corporate name change
Christmas may come early to select signage and print companies with Fort Smith-based Arkansas Best Corp. announcing Wednesday (April 30) that as of May 1 the transportation holding company will rename and rebrand to ArcBest Corporation.

• USA Truck posts quarterly loss
Van Buren-based USA Truck continues to lose money, but the losses are trending lower and officials with the trucking company maintain that their turnaround plan is delivering better results.

• Positive recovery
Less than a week after an emergency surgery to fix an aortic dissection, U.S. Sen. John Boozman, R-Ark., has returned home and has instructed his staff to work to help with tornado damage recovery in central Arkansas.

NUMBERS ON THE WIRE
$5: That is the rate per credit hour that students at the University of Arkansas at Fort Smith will pay to fund a new fitness center on the school's campus. The current facility is too small and hosts general recreation, academic and athletic programs.

$8.50: The hourly minimum pay rate organizers are trying to get approved by Arkansas voters in the November election. Stephen Copley, one of the organizers of the Give Arkansas a Raise Coalition, said there rate would be easier to get passed than President Barack Obama's proposed $10.10 per hour.

16%: Percentage of Arkansas drivers without auto insurance coverage, one of the highest uninsured percentages in the nation, according to the Insurance Research Council.

OUTSIDE THE WIRE
• This is what Amazon's smartphone will look like
The phone will make use of a data plan called "Prime Data," and while the details on it are far from totally known, it's expected to piggyback on AT&T's "Sponsored Data" program. Sponsored Data allows companies to subsidize your data use, paying for the data you consume inside certain apps and services — the data used inside of certain apps effectively doesn't count against your data plan. This might mean that Amazon could offer unlimited data for music and video streaming, but this is still speculative.

• A new rule on home care workers’ wages
A new rule from the Obama administration designed to provide better pay and working conditions to 2 million home care workers is forcing many states to rethink how they look at Medicaid payments and may result in higher Medicaid costs.

WORD ON THE WIRE
“Poverty is generational and with a lack of education the cycle continues. And in terms of non-bank lending, sometimes it may be cheaper to borrow from a payday lender than bounce several checks. But, once they borrow like that it’s easy to become enslaved.”
– Dr. Ed Bashaw, dean of the College of Business at Arkansas Tech University, in explaining how Arkansas ranks so poorly in terms of financial literacy

“I think the litigation challenges that we’re facing now on lethal injection would be exponentially increased if we attempted an electric chair [execution]. Take the policy out of it – whether it’s a good idea or a bad idea or whether it’s barbaric or whatever – I don’t think you could ever get to the legal point where a federal court would let us use the electric chair.”
– Arkansas Attorney General Dustin McDaniel, about problems with Arkansas’ death penalty rules

"You know, mixed reactions. Business never likes taxes, but yet we've had a lot of businesses saying they've been hurt by crime. I've had several say (it is) more than hot checks, but air conditioners units ripped off their building and things like that and knowing that those individuals ether weren't prosecuted because it was a moot point or they were and were never incarcerated."
– Van Buren Chamber of Commerce Executive Director Jackie Krutsch, explaining the business reaction to a proposed increase in sales taxes that would fund and operate a new Crawford County jail

A union vote at an OK Foods processing facility in Heavener, Okla., failed by a narrow margin Thursday (May 1), with workers voting 26-29 on a question of whether to unionize the facility.

With the vote failing, officials with Fort Smith-based OK Foods hailed it as a victory.

"OK Foods, Inc. is thrilled to announce that the maintenance and refrigeration employees at our Heavener, Oklahoma processing facility have decided against the need to be represented by the United Food and Commercial Workers Union in a National Labor Relations Board (NLRB) conducted election," the company said in a press release "The company is pleased by the outcome of the vote, and does not believe its employees need to pay a union a lot of money nor risk the possibility of strikes or other union complications to have a good job at OK Foods."

But Anthony Elmo of the United Food and Commercial Workers Union Local 1000 said the vote was not conducted according to the National Labor Relations Act, accusing OK Foods leadership of tampering with the election, which was conducted by the National Labor Relations Board.

"We feel like they subverted the vote as much as possible," he said, adding that the union is "preparing charges and objections to the election."

Elmo made as of yet unsubstantiated claims that OK Foods CEO Trent Goins had threatened workers with firing if they were to ever go on strike and had also threatened to lock employees out of the building if a strike were to ever occur.

He also said the company did "little silly things" that were meant to coerce employees into thinking they did not need union representation. Among the claims made by Elmo were actions as simple as painting the break room.

Elmo also claimed that Goins had met with employees one by one up to an hour before the vote Thursday in an attempt to sway their votes, though the claim and others have not been substantiated and a call to OK Foods for comment on this story had not been returned as of publication.

"The company is not allowed to do that within 24 hours of the vote," Elmo said.

In a prepared statement, Goins said he believed no one at the facility would regret the failed vote for a union.

“I am looking forward to continue working with our employees to make OK Foods the best possible place for everyone; I also encourage all employees to come together and work as a team. We sincerely believe no employee will ever regret the decision to defeat the union and wish to thank every team member for their support.”

Elmo said the union's objection to the vote would be filed either Friday (May 2) at close of business or Monday (May 5), adding that it was unknown when a decision on a possible re-vote could be handed down by the NLRB.

"The NLRB always takes a couple of weeks, at the least. But we're going to help employees speak with them directly, relay their testimony and tell the truth about what influenced their vote."

Arkansas revenue officials said April tax collections were in line with expectations leading to year-to-date figures slightly rising 10 months into the current fiscal year.

The April revenue report provided by the Arkansas Department of Finance and Administration showed net available general revenues totaling $570.2 million, down 11.3% from a year ago. Timing issues that inflated individual income tax collections a year ago declined in 2014 causing the big drop-off.

“Results in April, the largest collection month of the year, reflect adequate forecast provision for the anticipated decline from Individual Income tax collections in the prior year,” said John Shelnutt, head of DFA’s Economic Analysis and Tax Research Division. “Income tax shift from taxpayer strategy in the prior year added to FY 2013 results as a one-time boost and presented a challenge to current fiscal year prediction. The outcome of this one-time shift is reflected in the latest April results as a $101.7 million decline in Individual Income tax revenue compared to year ago results. The 17.9 percent decline was mostly anticipated and further offset by lower-than-expected Individual Income tax refunds.”

Corporate Income tax collections were $20.7 million above forecast for the month. Sales and Use tax collections were above forecast by $2.3 million or 1.3% and also above year ago levels by 4.9%.

“Short-term factors in collections processing may have contributed some of the gain above forecast for the month,” Shelnutt said.

Year-to-date Net Available General Revenues cleared $4.16 billion, 0.5% above last year’s levels and $77.6 million or 1.9% above forecast.

Other YTD totals included:
• Individual income taxes – 1.4% below last year; 0.5% above forecast;
• Corporate income taxes – 9% above last year; 10.2% above forecast; and
• Sales and use taxes – 3.2% above last year; 0.8% below forecast.

The 2014 Business Expo, hosted by the Fort Smith Regional Chamber of Commerce, emphasized growing businesses in a global economy. "Shop Local. Sell Global." was the message chamber members heard from numerous speakers beginning at breakfast and continuing at several breakout sessions held throughout Friday (May 2) at the Fort Smith Convention Center.

According to Chamber President and CEO TIm Allen, the idea for this year's theme came from a conversation with First National Bank of Fort Smith CEO Sam Sicard.

"It started out with how do we get people to buy local (during the Christmas season)," Allen said, adding that he and Sicard were looking for a way to expand beyond encouraging area residents to shop locally.

"The next step when Sam and I were talking about it, I (said), 'Our shops are not going to survive in the non-holiday season. They have to survive in the rest of the year. They've got to sell globally.' And Sam was like, 'So what you're saying is we need to shop local, sell global.' And I said, ‘That's it.’"

Speaking to the chamber members in attendance Friday, Sicard said for commerce to strengthen in the Fort Smith region, it would require members of the business community to start thinking outside the box. He said it cannot all fall on the Chamber's leadership to recruit business, either.

"There are other ways to increase commerce that's in the control of every one of us in the community," he said. "And simply increasing commerce by increasing the dollars that are coming into this community and limiting dollars going out of this community. The way that we do that, simply, is by exporting goods and services outside this community and bringing more dollars and more jobs into this community."

And while local consumers can do that by shopping locally, business owners have to start thinking globally, according to both Sicard and Allen, who brought in Quinn Frazier, business director at UPS, who discussed the future of eCommerce.

Frazier discussed how as a child growing up in Utah, his world and that of his friends and family did not stretch further than the streets of his neighborhood and town. But as the world as grown to become so interconnected through technology, businesses like those in his hometown cannot be content to just reach locals.

He pointed to the emergence of once sleepy towns as international commercial powerhouses that have a hunger for material goods and businesses, including those in the Fort Smith region, should be prepared to serve a growing middle class in a country on the other side of the globe.

The perfect example of this, he said, was Shenzhen, China, which data shows has grown from 332,900 people in 1980 to 10.467 million in 2011. The change represents a 3,044.31% increase in population in only 31 years.

According to Frazier, the explosive growth in emerging markets are not necessarily a bad thing, but represent opportunities for business owners willing to look beyond the boundaries of their own cities, states or countries. The opportunities to serve the growing middle class in other parts of the world is there if American businesses would just seize the opportunity, though he said only 350,000 businesses in the U.S. export and of those, 59% export to only one other country.

Even though Frazier was pointing out how local businesses could expand their reach and increase revenues and profits by looking outside the United States, he told The City Wire that businesses looking to reach locals must innovate just as much as those trying to reach an international market through the internet.

He cited a statistic that said by the year 2017, more than $13 billion in sales will be conducted on smart phones, and he said as businesses look to the future, they must keep mobile in mind, as well as the age of potential customers.

"I think, from a retail perspective, we've got to figure out how to almost duplicate the web shopping experience in a brick and mortar store," he said. "People want to come in. Fifty-four percent want to touch a screen when they come into a brick and mortar store. That doesn't make sense to me, anyway, but if that's the way that the trend is going, we need to figure out how to duplicate that."

The 2014 Business Expo was scheduled to run until 3 p.m. with a variety of educational seminars ranging from "The Pulse of the Online Shopper" to "eCommerce Through Three Generations: Boomer, X and Millennial."

The expo also featured vendor booths set up where businesses could showcase their services to Chamber members.

Former President and Arkansas Gov. Bill Clinton spoke more like a proud father than a politician as he rallied a crowd of rowdy Democrats in Little Rock on Saturday (May 3) at a fundraiser for Democratic gubernatorial candidate Mike Ross.

The event, held at the Little Rock Marriott's Grand Ballroom, featured Clinton, Ross and former Transportation Secretary Rodney Slater, who spoke about how he felt that Ross would follow in the footsteps of many Democratic governors before him, including Clinton.

"In the same vein as former governors (Sid) McMath and (Dale) Bumpers and (Bill) Clinton and (Jim Guy) Tucker and our current Arkansas Gov. Mike Beebe, from strength to strength, he campaigns as he has served — to promote programs and initiatives, to create an environment of opportunity for all, to demand responsibility and a contribution from all and to create a sense of community, a sense of place, a sense of belonging among all Arkansans,” Slater said.

Ross, who spoke briefly before introducing Clinton, said the attributes highlighted by Slater were engrained in him by his family in his hometown of Prescott and around the state.

"My family collectively taught me the values growing up of faith, family, hard work, personal responsibility," he said. "And I think those values served me well for the 10 years I served with people like Mike Beebe in the Arkansas State Senate, and I think they served me well for the 12 years that I served in the United States Congress and I just want you to know that those same values will serve as my moral compass as I do my best to hopefully lead this state for the next eight years."

Ross, who served as a driver during one of Clinton's many races for governor in the 1980s, said the lessons learned on the road all those decades ago taught him values that he will bring to the governor's office.

"When I was 20-years-old, I had the privilege to drive this man around this state. We had a one-car motorcade. It was him, me and a Chevy Citation. We didn't have cell phones. I had to always make sure I had change in my pocket so we could use a pay phone to check in the office," he said. "Let me tell you what I learned in that year and a half from this man right here. I learned that politics and public service can still be good, it can be noble. You can get involved, you can run for the right reasons, and you can really make a difference in people's lives. And he has been a friend and a mentor and someone to help guide me throughout my time in the Congress. I just think the world of him and I love him. I'm honored that he's here."

Clinton, who began his remarks by sending condolences to the victims of the state's recent tornadoes that killed 15 and destroyed or damaged hundreds of homes in Mayflower, Vilonia and other communities across the state.

When he shifted to recalling the 20-year-old Ross, the former President said he just had one goal during the year and a half that Ross drove him across the state.

"When Mike Ross was driving me around, I thought, 'You know, I'm going to see if I can't wear this boy out.' I still tried with all the young people that worked with me and he never wore out. And all these years I've known him and watched him and I know a lot about this race and I know a lot about the history of Arkansas politics and government."

He also explained how even before the stock market crash of 2008 and the resulting Great Recession, the economy was already lagging, saying that in his view the state and several parts of the nation were experience "trickle down economics," segueing into a discussion of the tax cut plans proposed by Ross and Republican gubernatorial frontrunner Asa Hutchinson, who faces a primary with North Little Rock businessman Curtis Coleman on May 20, explaining that Ross's proposed phased-in tax cuts would be the best plan for Arkansans.

"In my opinion, his tax plan is better than his opponent's, both because it's fairer and because it's better economics over the long run," he said. "When people are working and they can't put food on the table and they can't buy their kids clothes for school and they're worried about paying their bills every month, it affects how they do at work. It affects everything about their environment."

Clinton also praised Ross' plan to implement universal pre-K, explaining that the work his wife  — former Secretary of State Hillary Clinton, herself a potential presidential contender in 2016 — was doing with the Bill and Melinda Gates Foundation on expanding educational opportunities has opened his eyes.

"(A child) from a low income family that doesn't get a lot of education and doesn't go to school until the normal time without pre-school, that child — listen to this — would have heard 30 million fewer words spoken."

He said much of the basis for future learning throughout life begins during school and said there was no better way to close the gap between the less educated in the state "than universal pre-K."

The oft-controversial topic of the Private Option — the state's use of federal Medicaid dollars to purchase private health insurance for low-income Arkansans — was also discussed, with Clinton praising the program and saying that Ross' tax cut plan was made to help those who needed the assistance provided by the Private Option.

Ross's history of sometimes crossing the aisle and voting with the Republicans during his time in Congress was praised by Clinton, who said bi-partisanship was something sorely needed in the next governor and referring to the records of Hutchinson and Ross.

"You don't have to take the candidate's words for it," he said, referring to claims by both that they would be able to work effectively with the General Assembly, regardless of which party has the majority following the November election. "You actually have a long record for both of them and only one of them has consistently, even in the heated partisanship of Washington, D.C., proved that he would get up every single day and ry to find a way to get the show on the road by getting people together across the party lines, and that's Mike Ross."

Clinton concluded by telling the crowd that in his mind, the choice for the next governor of Arkansas was "not rocket science," adding that he would do his part to make Ross the next occupant of the Governor's Mansion.

"I am immensely proud of the man Mike Ross has become. I am proud of the life he's lived, the public service he's rendered. But the most important thing is he is by light years our best choice for the governor of Arkansas."

The Dennis Smiley loan saga puts two of the state’s largest banks on opposite sides as Simmons First National added another layer to the growing legal web with a legal complaint filed in Benton County Circuit Court on Friday (May 2).  

Pine Bluff-based Simmons First, through its lawyers at Kutak Rock, filed a 44-page complaint against former Arvest banker Henry Dennis Smiley doing business as Design for the Home LLC. Centennial Bank also was named as a defendant in the case as a lender who might also lay claim to the collateral encumbered to Simmons.

Unlike the majority of previous loan default complaints filed against Smiley, the collateral used for three loans with Simmons First was not linked to the Smiley’s Arvest stock holdings. Simmons loaned Smiley $62,116 in October 2009 to be used as working capital in the Design for the Home business. The loan was secured by the inventory and receivables of that business, according to count documents.

In March 2010, Smiley received a second loan from Simmons for $38,125, which also was tagged for working capital in the design business and backed by the businesses inventory.

In each of these loans Simmons required payment in regular quarterly installments, but the second loan was extended in April 2012 when the final balance was due. In December 2012, Simmons loaned Smiley another $46,040 with a due date of June 2016. In loan number three Smiley pledged his interest in three residential lots in the Mountain View Addition in Fayetteville. The bank filed a UCC Financing Statement encumbering the tangible real estate commonly known as 525 N. Assembly Drive, Fayetteville. 

A search of the county real estate records shows this property is owned by Debra Parker-Ladd, with a mailing address of 307 Appalachian Way, McKinney, Texas. Smiley transferred the property to Parker-Ladd on Aug. 3, 2013, for a sum of $1, according to the deed on file. County records show an estimated sale price in 2013 was $229,000

Simmons made no mention of Parker-Ladd, but noted in the lawsuit that Centennial Bank may also have claim to this same tangible collateral. Simmons claims the Centennial lien would be junior, or subordinate, to Simmons’ claim. The Simmons filing asked the court for a judgment totaling $67,879 with interest accruing. The bank also asked for court costs related to the legal proceedings.

This is Simmons’ second complaint filed against Smiley in recent weeks following a $84,816 complaint lodged against HDS Holdings, AKA Dennis Smiley Jr. and Henry Dennis Smiley Sr.

Smiley Sr. has noted in recent court filings that he did not sign any documents, nor was he aware of loans made in his name.

SMILEY’S ANSWER
Smiley Jr., through his lawyers at Ball & Mourton in Fayetteville, answered the Arvest interpleading on May 2 agreeing with most of the points raised in the initial Arvest filing. Smiley noted that he has not received any payment from his stock account earned while he was employed at Arvest. 

He asked the court to allow the funds on deposit be applied to his legal costs and any other relief the court deems just and proper.

The Arvest Interpleading listed the names of 20 Arkansas banks. To date, nine banks have staked claims totaling $1.69 million. Today’s Bank and First Security Bank filed answers to the Arvest interpleading but did not furnish details about what is owed.

Tyson Foods second fiscal quarter revenue hit $9.032 billion, a more than 7.7% increase over the same quarter in 2013, with net income of $213 million up more than 124%. The improved financial results came primarily from sales and margin gains in the chicken business along with higher beef and pork prices.

The quarterly per share earnings were 60 cents, just below the consensus of analysts’ estimate of 63 cents per share. Investors began selling off Tyson Foods shares at the market opening as analysts belief the recent run-up in stock price was a little premature. In the first hour and half of trading 2.5 million shares had traded hands and the share price was off 8% to $39.24 down $3.41.

Tyson management gave an optimistic outlook for the back half of 2014 and 2015 saying it will be as good or slightly better than the past six months. But that was not enough to keep investors pacified given the stock price has surged 72% this year.

For the first six months of the year, Springdale-based Tyson Foods has posted $467 million in net income, well ahead of the $268 million in the same period of the previous year. Total sales for the six-month period was $17.793 billion, up 6.23% compared to the same period in the previous year.

The second quarter marked the first time the company posted quarterly sales of more than $9 billion.

"We had a record second quarter, which is a testament to our great team and our balanced multi-protein, multi-channel, multi-national business model," Donnie Smith, Tyson Foods' president and CEO, said in the earnings statement released early Monday (May 5). "Our second quarter is usually our most challenging. We had a lot to overcome, including a harsher than normal winter, but I'm satisfied with the results. I'm still confident in my expectations for the year that we will achieve our goal of 6-8% sales growth in value-added products while generating at least $2.78 earnings per share.”

Smith estimates a $15 million ding from cold weather impact. He said there is always a weather impact but this year the severity began earlier and lasted longer, noting that institutional sales were down because of school closures but those were mitigated by higher retail sales as moms cooked more meals at home.

Tyson said the recent tornadoes in Arkansas and other areas of the south did not hit company facilities though a few grower houses were destroyed. Tyson has had more than 200 workers help with the clean up efforts in four states and cook 63,000 meals for relief workers and storm victims. Tyson Foods is matching its employee contributions to the storm clean up efforts up to $100,000.

POULTRY PLUS
Quarterly sales in the chicken segment were $2.842 billion, up almost 4% over the second quarter in the 2013 fiscal year. Operating income in the segment during the quarter was $234 million, much better than the $143 million in the 2013 quarter.

Smith expects industry chicken production to rise between 2% and 3% on heavier weights with no meaningful uptick in birds slaughtered until the back half of 2015. The industry is somewhat restricted by older breeding flocks and processing capacity constraints.

Tyson said its domestic chicken business is strong, but Smith reminded analysts that it doesn’t have to grow the birds it processes in order to to expand because of its buy versus grow capabilities. He did say Tyson is tapped out on further processing capacity and the company plans to expand two lines in order to meet the demand it’s seeing in case-ready retail.

In the recent quarter, chicken prices reported by Tyson Foods were down 0.3%, from the prior year on the domestic side of the business. Tyson’s operating margin improved to 8.2% amid lower grain costs of $175 million in the quarter.

LEAN BEEF
Beef sales in the quarter totaled $3.825 billion, better than the $3.447 billion in the same quarter of 2013. Operating income in the segment was just $35 million, but that was a wide swing from the $26 million loss in the same quarter of 2013.

Smith said high live cattle prices kept Tyson on the sidelines through much of the second quarter, which allowed the company to better manage the margin spreads. The net operating margin for the quarter was 0.9%, well below the normalized range. Smith expects the back half of this year to mirror the first two quarters, which while positive is far from the company’s normal earnings potential in beef.

Steve Kay, publisher of Cattle Buyers Weekly, told The City Wire that high beef prices will likely keep consumer demand at bay through much of the summer grilling season.  Smith said beef prices are up about 4% at retail, but they are up 13% at the wholesale level and consumers have not yet felt the brunt of record beef prices.

PORK PED
The pork segment posted operating income of $107 million on total sales of $1.487 billion, compared to operating income of $72 million on sales on segment sales of $1.311 billion during the same period of 2013.

“We expect industry hog supplies to decrease around 4% to 5% in fiscal 2014 compared to fiscal 2013, partially offset by increased average live weights,” Smith said. 

Tyson will adjust its pork operational hours downward because of the negative impact the PED virus has had in hog supplies, according to Smith. He said pork prices are up at retail, but the cutout wholesale value has come down off of a record high which should allow for some promotional activity at the retail level by Memorial Day.

For fiscal 2014, Tyson expects its pork segment will be in its normalized margin range of 6% to 8%.

PREPARED FOODS GROWTH
Tyson’s prepared foods segment generated second quarter sales of $861 million, up 7.2% from the year-ago period. Operating income totaled $21 million, down fractionally the same period in 2013. The dip in operating income was attributed to higher raw material costs of $25 million, increased investments in the company’s lunchmeat business capacity and recent acquisitions.

Smith has said the prepared foods segment is a growth engine for the meat giant. The company continues to invest in this segment for longer term results. Much of the company’s capital expenditures this year— $650 million to $700 million — is earmarked for the prepared foods segment.

Tyson expects operational improvements and pricing to offset increased raw material costs in the coming months because Tyson uses a formula-based contract, but there is a slight lag time involved.

“As we continue to invest heavily in our growth platforms, we expect our prepared foods segment to be below its normalized range of 4.0% to 6.0% for fiscal 2014,” Smith noted in the release.

INTERNATIONAL STALLS
The only negative results were found in the company’s international segment, which saw poor market conditions in Brazil and weak demand in China along with costs incurred to prepare for future business. Tyson separated its international segment from the poultry business after recently re-aligning its top management teams.

"The International segment is another area where we think some short-term sacrifices are worth the long-term earnings potential. We've chosen to slow down our growth this year, primarily due to weak demand in China,” Smith said in the statement. “We are committed to our China operations, and we believe we now have the right pace for developing that business as we wait for demand to return. We think it will get sequentially better from here, and we like the long-term opportunity."

Smith said during the analysts call that the company had totally revamped the management in its Brazil operations from the president to field supervisor after several missed steps from the previous management team on the ground in Brazil.

“We have the right people in place there (Brazil) and expect this business to turn around in the back of this year,” Smith said.

In China, the avian influenza drag on chicken demand has lasted longer than expected, but Smith is optimistic that conditions will improve.

“Unless market conditions improve, we will incur losses for the remainder of the year; however the losses in the third and fourth quarters of fiscal 2014 should be lower than the losses sustained in the first two quarters of fiscal 2014,” Smith noted in the release.

BETTER OUTLOOK
The company expects the second half of the fiscal year to also generate good revenue, and execs are predicting $37 billion in total sales, a gain over the $34.374 billion in the previous fiscal year.

“We expect fiscal 2014 sales to approximate $37 billion as we continue to execute our strategy of accelerating growth in domestic value-added chicken sales, prepared food sales and international chicken production, as well as price increases associated with rising cattle and hog costs,” the company noted in the statement.

Flush with cash and a healthy balance sheet, Tyson continues to look for merger and acquisition opportunities through “bolt-on” and larger strategic plays, according to Dennis Leatherby, chief financial officer for Tyson Foods. He said the company will also continue to innovate new products that cater to consumer desires like the Tyson Daystarts breakfast item that has posted a record performance for a new product launch.

Tyson execs were asked to quantify how the company plans to grow earning per share by the 10% projected figure. Smith said the 10% earning per share growth year-over-year is attainable because he expects better performances out of China and Mexico, beef and pork segments to do the same or better, chicken profits and sales to grow and more synergies realized from some of the acquisitions made last year. Tyson expects fiscal 2014 earning of $2.78 per share.

Tyson shares continued to skid following Monday’s earnings call and the miss on net profits. Tyson Foods’ shares (NYSE: TSN) traded down nearly 9% at the noon hour Monday — $38.90, down $3.75. During the past 52 weeks the share price has ranged from a $44.24 high to a $23.39 low.