Lowell-based J.B. Hunt Transport Services has been recognized by Walmart for Innovative Excellence in Transportation for 2012.

In a letter of commendation to J.B. Hunt, Rob Kusiciel, vice president Walmart Inbound Transportation, and Ken Braunbach, senior director of Transportation, wrote: “We are aware of the operational challenges and financial pressures the transportation industry continues to face. Your ability to rise above these obstacles has won our utmost trust and confidence. We look forward to continuing our rewarding partnership for the years to come.”

John Roberts, III, president and CEO of J.B. Hunt, said, “J.B. Hunt prides itself on being an industry leader in finding creative and novel solutions to the transportation needs of our customers. We truly appreciate this recognition from Walmart and look forward to continuing our work together optimizing their transportation network.”

According to a statement from J.B. Hunt, the company works to use all resources – intermodal, dedicated contract services, final mile, integrated capacity solutions and truckload – to provide comprehensive solutions to nearly every supply chain network.

This enterprise approach allows J.B. Hunt to fully integrate the increasingly complicated and multiple transportation requirements of customers into a seamless process.

Dillard’s, Inc. finished its fourth quarter on a strong note, but its annual profits slumped from the previous year.

The Little Rock-based mall merchandiser reported fourth quarter revenue of $2.15 billion and net income of $161.4 million. That was an improvement from the previous year’s fourth quarter when the company posted profits of $141.5 million on revenue of $2.01 billion. The company said it gained an extra week of sales due to calendar timing in its fourth quarter this year.

For the full year, Dillard’s profits hit $336 million, down from $463.9 million in the previous year. Revenue for Dillard’s for its full fiscal year were $6.75 billion, an improvement from $6.41 billion one year earlier.

Same-store sales rose 3%, according to company officials and gross margin improvement gained 40 basis points during the quarter.

“We are pleased to report a strong finish to a very successful year at Dillard’s. Our positive sales performance and gross margin expansion combined with expense control drove strong cash flow throughout the year. As a result, we were pleased to return cash to shareholders in the form of a $5.00 special dividend during the fourth quarter.

Additionally, we purchased $185.5 million of Class A Common Stock during the year. As we mark our 75th year at Dillard’s this month, we are proud of our progress and excited about the future,” said CEO Bill Dillard.

Last week, Alexa Dillard, the widow of Dillard’s founder William T. Dillard, died at the age of 96.

Dillard’s shares (NYSE: DDS) closed trading on Friday at $84.92, but it was off to a rough start on Monday morning with shares trading as much as 5% lower. The company’s stock has traded between $58.42 and $89.98 during the past 52 weeks.

The Northwest Arkansas region is known for being a hotbed of entrepreneurialism and start-up businesses, but also where some of the world’s most prominent retailers and suppliers have a well-established presence.

These two worlds are meshing on an increasing basis as members of the supplier community are finding ways to spread their entrepreneurial wings and create new businesses. In some cases, these businesses are an accompaniment to the supplier position, other times working in the supplier community gives individuals the stability they need while growing a business they intend to eventually operate full time.

“I think in Northwest Arkansas, due to the variety of cultures and businesses in the area, we are much more aware of opportunities,” said Linda Richards of Linda Richards Photography who also works full-time for a supplier as a category management analyst.

“Women are focused on empowerment and for each stage in their life that may mean something very different. Just like across the nation, more women are empowered to make their own career, and why not try your hand at entrepreneurship,” she continued. “I don't want to speak for others but I do think there is an awakening of self where people want to push themselves, feel valued, accomplished, and that their time on Earth was worthwhile.”

Beverly Snyder of Bentonville has worked at Sam’s Club corporate offices and in the supplier community. She now works for a jewelry supplier but she also owns and operates Bev’s Bargain Barn in Springdale and a non-profit organization based in Bentonville named Club Net Junior Olympic Volleyball Club.

“The increase in people starting their own business is because they see an opportunity to take the knowledge they have gained and start something of their own and hopefully help their community.

There is always something to be learned from any endeavor,’ she said.

ACHIEVING DREAMS
There are many circumstances that lead people to start their own business.

“For as long as I can remember, I have dreamed of starting my own business. I knew someday I would find the right opportunity and financial freedom to do so,” Richards said. “In 2010, I unexpectedly became a statistic of the economic downturn when I was laid off from an employer. It was during this time that I felt I had to seize the opportunity to try something new or at the very least have a Plan B. Linda Richards Photography was set in motion.”

For Becky Paulk, working for a supplier was a way to find steady income while growing her business, Simply Professional Services, which offers bookkeeping and consulting for small businesses. She now operates her business full-time.

“As I networked, I recognized the existence of this small business community,” she said. “I presented my idea of bookkeeping and consulting to these audiences and a few latched on giving me my first clients. Eventually, it proved successful and I am able to save all of my clients time and money by taking away the burden of financial record keeping, allowing them to get back to driving sales and improving profits.”

FINDING BALANCE
Balancing a full-time career with the demands of a new business requires efficiency and organization, Richards said.

“It is important that I stay focused on what is in front of me to be successful. When I'm at my office job, I'm fully engaged,” she said. “When I am at a photo shoot, I'm focused on my business and clients.  When I'm home cooking dinner and having family time, I'm fully present.”

Outsourcing some of the business management roles has also been important for success, she said. She hires other small businesses to help with web design, accounting and business development. She also receives a lot of support from family and technology to make it work.

“I think this is true for any entrepreneur but for me it is especially true, I could not juggle the two if it weren't for the support from my husband and kids,” Richards said. “For my home, Siri is my best friend for reminders, auto bill pay is a life saver, my boys have had to pick up more chores and I have a house cleaner come in every other week to help keep our home in order.”

Sometimes there still isn’t enough time in the day to accomplish all that she wants with the business, Richards agreed.

“Because of the limited time I can devote to my photography business, I've had to let some ideas stay on a back burner simmering until I could fit it all in but it has also caused me to be more strategic,” she said.

Snyder compared that working in the supplier industry is “not so different from the volleyball teams. Success comes from setting goals and being dedicated to working hard, communicating and working together as a team.”

Working part-time in the supplier community allowed Paulk time to grow her business, she said.

“I worked part time for the supplier while I was developing a business plan, and picked up a few clients. Since it was part time, I dedicated time in the day to each,” she said. “All day Monday to the supplier, then mostly mornings to the supplier and afternoons to my business. Eventually my business had enough to sustain me financially that I chose to leave the supplier and pursue my business full time.”

Paulk said financial changes can be a big challenge when starting a small business.

“In general, starting your own business requires you to be prepared to not get a pay check every week,” she said. “It takes time and money. You have to be able to balance your own cash flow with that of your business, especially at first.”

SUPPLIER ASSETS
Working in the supplier community provides many avenues of support for local entrepreneurs. For one, there are the contacts. Snyder said that the supplier community has provided contacts that have aided in both businesses.

Richards had similar thoughts and said that her business career has been a major asset for her business.

“I've always gravitated towards positions with a business development aspect. Working in the supplier community has awarded me opportunities for leadership development, meeting other business professionals, and working alongside really smart people,” Richards said. “In some ways, being integrated into the supplier community has opened doors that would have been much more difficult to walk through otherwise.”

Paulk said the supplier community is filled with entrepreneurs, including the supplier companies themselves.

“So many suppliers are small businesses (or) started off that way,” she said. “It's inspirational to see what some of them started as, and have since become.”

“Owning a business has been one of the most challenging, and rewarding things I have ever done,” she continued. “The challenge is being self-motivated and knowing when and how to allow yourself to grow, plus work/life balance. The reward is making something out of nothing, and calling the shots.”

For the fourth consecutive year, ABF Freight System is listed among Training magazine’s Training Top 125, which ranks companies’ excellence in employer-sponsored training and development programs.

“ABF has a long-standing commitment to recruiting, training and equipping dedicated supply chain professionals,” ABF President and CEO Roy Slagle said in a statement. “Backed by ongoing training support, ABF employees are given the power to serve the specific needs of a diverse group of customers. It is always gratifying to have our efforts recognized by a prestigious publication like Training magazine.”

ABF is one of the nation’s largest less-than-truckload carriers.

Training magazine recognized the 2013 Training Top 125 winners with crystal awards and revealed their rankings during a black-tie gala during the Training 2013 Conference & Expo at the Walt Disney World Coronado Springs Resort. Now in its 13th year, the Training Top 125 is the only list that ranks companies unsurpassed in harnessing human capital.

The Top 125 includes ranking based on benchmarking statistics such as total training budget; percentage of payroll; number of training hours per employee program; goals, evaluation, measurement, and workplace surveys; hours of training per employee annually; and detailed formal programs. Ranking is determined by assessing a range of qualitative and quantitative factors, including financial investment in employee development, the scope of development programs and how closely such development efforts are linked to business goals and objectives.

Regional sales tax collections in the first two months of 2013 are running slightly behind a year ago with $8.536 million returned to the four largest cities in the two-county area – and economists point to more headwinds in the near-term.

Tax collections are down 1.76% for the combined receipts of Fayetteville, Springdale, Rogers and Bentonville according to city records. Bentonville was the only city among the four to report lower collections year-over-year.

Denise Land, finance director for the City of Bentonville, reports revenue dipped about 7.3% in February after a very healthy January report when collections rose 28%.

Despite the lower collections in February, Land said they still came in almost $200,000 over budget. The city was up against a tough $1 million comparison from a year ago and Land is confident the numbers will improve.

Among the smaller towns of Bella Vista, Siloam Springs and Lowell, collections in the first two months of 2013 totaled $1.07 million. Revenue rose 4.65% among this smaller town group, with Lowell and Bella Vista each reporting increases, while collections in Siloam Springs are tracking lower to start 2013.

University of Arkansas economists warn a pullback in collections is likely to continue for the next couple of months as consumers adjust to higher payroll taxes and a recent spike in fuel costs.

The consumer confidence index fell from a 71.5 reading in November to 66.7 in December. Consumer confidence deteriorated further during the month of January to a reading of 58.6. The February reading is due out later this week.

Sales tax revenue tracks two months in arrears as February collections reflect sales transactions made in December.

February collections totaled $5.075 million among the four largest cities, up 3.93% from a year ago.

Monthly Sales Tax Collections (February)
Bentonville $936,369, down 7.3%
Fayetteville, $1.757 million, up 5.8%
Rogers $1.466 million, up 12.3%
Springdale $916,049, up 0.9%

City officials say they have budgeted for slight increases in collections this year over last, and while they expect some months will be higher and some months slightly lower from 2012 they forecast modest growth in 2013.

POTENTIAL HEADWINDS
The region’s largest employer, Wal-Mart Stores Inc., said last week the retailer expects muted sales growth through April as customers adjust to smaller paychecks and longer delays in tax refunds.

The median household income in Northwest Arkansas is $54,186, the additional payroll tax reduced household income by roughly $97 per month or $1,164 annually. This went into effect Jan. 1.

Tax refunds generally spur consumer spending beginning in early February, but Wal-Mart Stores reports fewer tax refunds being cashed so far this year as the changes in the tax code has delayed refunds up to three weeks compared to year ago. Wal-Mart said it had cashed $3 million in refund checks a year ago, compared to just $1.7 million this year as of last week. The retailer also reported sluggish sales in the first two weeks of February, but that traffic and receipts had picked up more recently.

The delay in getting refunds not only affects when it’s spent but also how the funds might be used.

Bill Simon, CEO of Wal-Mart US, said when consumers cash a tax check the week before the Super Bowl, they tend to buy a television. The retailer does not know how the later refund checks will be spent.

Economists view Wal-Mart as a gauge into the mind and actions of consumers, which represent nearly two-thirds of the country’s overall gross domestic output.

John Silvia, chief economist with Wells Fargo Securities, expects the U.S. economy to grow at slow 2% rate through the first six months of 2013 with contributions coming from
consumers later this Spring and some additional business investment.

Silvia said decreased government spending and inventories will be a slight drag, or headwind, to overall economic growth.

Fresher strawberries for consumers and an economic boost for local farmers throughout the country is the aim of a $3 million donation made recently by the Walmart Foundation to the University of Arkansas System Division of Agriculture.

The donation will go to the Division’s Center for Agricultural and Rural Sustainability, or CARS. The center will create and manage a national competitive grants program, awarding money from the donation to land-grant and other public universities with agricultural research and outreach programs with projects that will, among other things, expand where strawberries can be grown, enabling shorter trips for the berries between farm and consumer.

CARS is composed of faculty from multiple disciplines and focuses on enhancing economic, social and ecological prosperity for rural communities around the world.

Established in 2007, CARS’ work includes developing tools for farmers in the U.S. and around the world that can predict greenhouse gas impacts in livestock operations, researching and teaching production methods that improve water quality and quantity, and enabling farms to provide healthy and safe produce.

“We are excited this grant will enhance sustainable production of strawberries. That means better access for shoppers to quality strawberries and better profitability for the farmers growing the crops,” Michelle Gilliard, senior director of the Walmart Foundation, said in a statement from the university.

“We’re grateful to the Walmart Foundation for its support and we see this donation as a starting point for innovations that will benefit consumers, farmers and the environment,” said Mark Cochran, UA System vice president for agriculture.

Though prized for their delicate taste and texture, those same qualities can be the berries’ weakness – especially when hauled thousands of miles.

“Strawberries are a highly perishable fruit with a short shelf life in the supply chain,” said Curt Rom, a horticulture professor for the Division of Agriculture, and part of the center’s leadership team. “Strawberries travel an average distance up to or exceeding 3,000 miles from farm to market.”

It’s estimated that between the time the berries are picked to the time they reach the consumer, losses can reach 36%, with an annual value of $1.14 billion, Rom said.

To solve these issues, the center will seek proposals from research and extension teams at land-grant and public universities nationally that will expand strawberry production areas, decrease energy use and environmental impacts, and cut product losses. All of these add up to a more sustainable industry.

It’s not all bad news at Van Buren-based USA Truck.

Alcoa has announced that USA Truck is the Tier 1 2012 Carrier of the Year for providing “outstanding dry van service in North America.” It was the first time USA Truck has received the award from Alcoa.

“The core carrier awards represent a successful partnership that has been developed with our top transportation providers in North America. The carriers we are recognizing have best met the criteria established to insure the needs of Alcoa facilities,” Tim Reyes, president of Alcoa Materials Management, said in a statement.

The other Tier 1 van core carriers for Alcoa are Celadon Trucking Services, Covenant Transport, and Swift Transportation Corporation.

Ed Hamorsky, director of Logistics and Transportation added, “This program continues to drive more intimate business alignment and trust between Alcoa and the core carriers that serve our plants. We continue to put a lot of focus on deploying effective sourcing and execution strategies to reduce our transportation spend. Many of the successes we have realized the past few years are linked to creative solutions offered by our core carriers.”

The Alcoa award is welcome news for a troubled trucking company. Full-year financials for USA Truck released Jan. 31 showed a $17.54 million loss for 2012, marking four consecutive years of losses. USA Truck was forced in August 2012 to obtain a new line of credit during the third quarter of 2012 after violating covenant agreements with the previous credit arrangement.

On Feb. 18, the company announced a management change.

Each quarter, the U.S. Environmental Protection Agency updates its Green Power rankings for U.S. businesses and communities making investments in clean, renewable energy.

Wal-Mart Stores Inc. tops the recent list generating 174.8 million kilowatt-hours of renewable energy at its U.S. stores.

Environmentalists say the retail Goliath still has room for improvement as the renewable 174.8 million kWh is just about 1% of its annual energy consumption and 4% of its electricity needs.

Wal-Mart uses a combination of biogas, solar and wind initiatives at various stores around the country.

Other retailers on the list include Kohl’s Department Stores, which generates about 36.5 million kWh or 2% of its annual energy consumption but 105% of its electricity needs.

Whole Foods also ranks high among retailers generating 107% of its electricity needs by harnessing power from solar and wind.

Consumers around the country can soon get free automated health screenings at their local Wal-Mart Stores and Sam’ Club locations.

The SoloHealth kiosk can check blood pressure, weight, eyesight and track behaviors such as health eating habits.

Wal-Mart has installed these kiosks in stores for the past few months with 2,500 locations sited.

In Northwest Arkansas the kiosks are located near the store pharmacy counter at the Sam’s Club in Fayetteville and the store near the Northwest Arkansas Mall. In Benton County the kiosks are operational at the Wal-Mart Stores in Bentonville and Rogers in addition to the supercenter just across the state line in Jane, Mo.

The self-service station suggests a trend toward more equal access to health care and the redefinition of a doctor visit, the release states.

SoloHealth offers free and convenient access to health care, using a simple touch-screen method with helpful videos to walk the consumer through the simple tests. They receive a customized report of their results, an overall health assessment, valuable health information, and access to a database of local doctors.

Health professionals say the kiosks do provide free screening but should not replace regular check-ups with a physician.

Arvest Bank has promoted Robyn Breshears to regional private banking manager serving Benton County and Springdale.

Breshears has been with Arvest Bank since 2001, and prior to her promotion she was a trust advisor with Arvest Asset Management. Her previous work experience includes public accounting, the medical industry and internal auditing for a large bank holding company in Oklahoma. 

“Robyn has developed lasting relationships with her customers through her strong commitment to meeting their financial planning and investment management needs,” said Dennis Smiley, CEO of Arvest Bank in Benton County. “This promotion is a worthy recognition of her dedication and expertise.”

Breshears is a certified public accountant and certified trust financial advisor. She also holds investment and insurance licenses.

She earned master’s degree in business administration from the University of Arkansas in Fayetteville and a bachelor’s degree in accounting from East Central University in Ada, Okla.

Breshears has lived in Northwest Arkansas since 1995 having served as president of the Arkansas Crisis Center’s board of directors, president of the Springdale Rotary Club, trustee of the Springdale Rotary Foundation Trust and a board member for the Springdale Chamber of Commerce.

Joe Edwards and John Taylor are two of the most optimistic and positive people you could meet, but their assessment of economic conditions are anything but optimistic and positive.

Edwards, president and CEO of Fort Smith-based Benefit Bank, and John Taylor, a member of the bank’s Board of Directors and senior vice president in Fort Smith for Sterne Agee, recently sat down for a lunch interview at Whole Hog Cafe in Fort Smith.

“We’re really poised to make loans, and eager to make loans,” Edwards explained. “But there is just not a lot of loan demand out there. ... And as a region, I don’t think we’re unique in that sense.”

‘UNIQUE UNCERTAINTY’
Although the bank’s Northwest Arkansas office is seeing an uptick in loan demand, Edwards said numerous conversations with business owners from a wide range of businesses suggest concerns over future tax liabilities, healthcare costs and regulation cause the business owners to be hesitant about expanding.

“Risk takers do not mind the risk, but what we are seeing, what they are seeing is a broader unique uncertainty out there,” Edwards said, adding that there is also “uncertainty with the consumer.”

Edwards said he has not seen this type of uncertainty in his more than 30 years of banking. He also said many of the business owners he talks to are seeing improvements and want to expand, but are unwilling to make the move.

“The people are positive and they want to invest. The desire is there, but they see too much risk to go out there and do that (expand),” Edwards said.

Taylor agreed, saying the average “retail investors” among his client base have no confidence in government or they see government as an obstacle.

“I have never seen a time in my career where they are as risk averse as they are today,” said Taylor, who began working in the investment field in 1986.

REGULATION FRUSTRATION
Edwards and Taylor focused on two government programs they believe create the most uncertainty in national, state and local economies: the federal healthcare law, and banking industry changes through Dodd-Frank.

Named after legislative authors U.S. Sen. Chris Dodd and U.S. Rep. Barney Frank, the “Dodd-Frank Wall Street Reform and Consumer Protection Act” was signed into law on July 21, 2010. It was passed in response to the near financial collapse of the U.S. banking community in 2007-2008. Advocates of the law say it will prevent banks and other financial institutions from essentially creating a financial house of cards.

Edwards said Dodd-Frank creates “a new level of unknown” in a banking community that needs stability to make good loan decisions.

“A reaction was needed to that (previous problems in the financial sector), but this was an overreaction,” Edwards said of Dodd-Frank.

As to health care changes, Taylor said the law is a disincentive to business growth. The small business owner who sees his company grow will have to make a tough decision before hiring a 50th employee and “falling under a whole new set of Obamacare rules.” Non-profits with several hundred employees may have to cut many workers back to 28 hours a week to avoid higher medical costs. That action, Taylor explained, would in turn create more health care problems rather than provide the fixes the new law was supposed to create.

“The early stages of this anemic but sustainable recovery can continue, with the only threat to that being government regulation and interference,” Taylor said. “The summary for your story can be, ‘Risk averse, with no or low confidence’” among investors and the business community.

ON THE BRIGHT SIDE
But there are bright spots for the national economy, and Edwards and Taylor also see possible growth options for the Fort Smith regional economy.

The “massive quantities” of natural gas in the U.S. “is really a game changer,” said Taylor, who believes the right leadership could allow the U.S. to become energy independent.

Edwards and Taylor also agreed that energy independence and innovation could reverse the trend of outsourcing manufacturing, which could be a big help for the Fort Smith area.

Taylor said Fort Smith officials may want to focus on two areas to help improve economic trends in the region: 1) work to become a logistics/distribution center, and 2) support efforts to again become a region known for healthcare quality. Taylor said Fort Smith was once a place where people from many states would come to receive quality healthcare. With the deep pockets of Naples, Fla.-based Health Management Associates (which owns Sparks Health and manages Summit Medical in Van Buren), and St. Louis-based Mercy, Taylor is optimistic the investments will be made to improve the regional medical sector.

“I believe we can be a regional healthcare center like we were when I moved here in 1973,” Taylor said.

Benefit Bank is putting its money in the healthcare effort. Bank officials recently announced two gifts totaling $300,000 to the University of Arkansas at Fort Smith. A $250,000 professorship – titled the Benefit Bank Endowed Professor of Nursing – will provide a perpetual source of support outside the scope of the University’s regular budget, while a $50,000 gift will fund the Benefit Bank Adult High-Fidelity Simulator, called a “sim-man,” which will be the second such simulator for the UAFS College of Health Sciences.

Bank officials cited a nursing faculty shortage, a shortage of nurses in Arkansas and UAFS nursing laboratory needs in making the gift to UAFS.

Van Buren officials are preparing to make upgrades to seriously old infrastructure during the next few years.

According to Steve Defresne, director of municipal utilities, the city of Van Buren will apply for a $200,000 Arkansas Community and Economic Development Grant to help fund replacement of water lines first installed 115 years ago, in 1898.

"It still functions properly," Defresne said. "When it does break, the location of it is very, very difficult to get to for repair."

Breaks do not happen often along line, which is eight inches in diameter, Defresne said.

During the last year, the line only broke once and it required repairs twice during 2011, he said. But he added that when a break in the line occurs, repairs have not been simple.

"When it does (break), it's a major repair," he said. "The cost of a repair could be up to $4,000 or so to repair it in one break," he said. "But the replacement is not just about the repair. Part of the replacement is about supplying adequate water."

Van Buren Fire Chief Jerry McAdoo said replacement of the outdated waterline, which would increase the line to an 18-inch diameter, would increase the water supply to an area starting in the Lafayette and Knox Street neighborhood around Mt. Vista and extend into the industrial park area.

"It's going to give us a better water supply for that area for fire protection," he said.

McAdoo said the Insurances Safety Office (ISO) wanted upgrades to be done to the line and other facilities in the city's water system in order to maintain the city's current ISO rating, which helps determine homeowner and commercial property insurance rates.

The cost of upgrading the waterline is estimated at $810,000, according to Dufresne.

"What we're planning on is $200,000 in grant money and over the next couple of years we'll set aside $240,000 a year, which is what we get from city sales tax for capital improvements," he said. "On that third year, we'll pull the rest out of the capital improvements fund."

Construction on the project is expected to begin in 2015, Dufresne said, though he said plans could change depending on if or when the grant is approved.

"What I found out last night is it could possible be the fall or the first of 2014 (before we know the status of the application)," Dufresne said.

Regardless of whether the city receives the grant, the project will move forward, he said.

"The project still needs to be done whether we get the grant or not. It's been on the plans longer than the grant has been there."

Defresne said the water line project was part of a three-part project that included spending about $1.3 million rehabilitating the water reservoirs behind the fire department on Mt. Vista Boulevard and installing a new $450,000 pump at the same site.

Tyson Foods Inc. said Tuesday (Feb. 26) that its second fiscal quarter has been more challenging than anticipated thanks to shrinking profit margins.

The meat giant joins the likes of Wal-Mart and Darden Restaurants in issuing near-term caution in recent days.

 "Margins have been compressed throughout the past month as the value of beef has fallen more than the price of cattle. Historically, adjustments occur that allow for a spread between the revenue and the cattle cost. We run our plants for margin, not market share," Jim Lochner, chief operating officer, candidly told investors Tuesday at Goldman Sachs 17th Annual Agribusiness Conference in New York.

He said Tyson's pork business has also experienced some margin compression in this quarter, although there have been signs of improvement recently.

"We expect to continue our strong performance in the back half of the year," Lochner added.

This tone was a little more cautious than that shared with analysts less than a month ago during the company’s earnings call and investors took note.

Shares of Tyson Foods tumbled on the cautious sentiment after rallying in recent weeks. Tyson shares lost more than 3.5% in value to close at $22.42 on Tuesday after a very heavy day of trading.

Meanwhile, Tyson says its chicken segment has continued to do well. Chicken represents about one-third of Tyson’s total sales.

"Demand is strong, and we're seeing signs of consumers trading from beef to chicken," Lochner said. "Even with pricing up substantially year over year, chicken is a good value for consumers, and food service continues to promote chicken heavily."

The U.S. Department of Agriculture reports chicken production (ready-to-cook) pounds rose 6% in January from a year ago as processors are raising more chickens for slaughter.

PRODUCT INNOVATION

Tyson CEO Donnie Smith has said Tyson will grow its sales revenue to $35 billion this year, despite the short-term challenges.

Product innovation is one of the core tenants Tyson said it is focusing on this year. On Tuesday, Lochner delivered with news of a new line of all natural chicken under the “NatureRaised Farms" brand. This brand will include a variety of fresh products made from cage-free chickens raised without the use of antibiotics or added hormones and fed a vegetarian diet. Company officials expect NatureRaised Farms fresh chicken to be available for sale to retailers in April.

Lochner said this new product line is just one way Tyson is delivering on more valued-added sales that provide for higher profit margins.

Dennis Leatherby, Tyson's chief financial officer, told investors at the conference there is value in the diversity of Tyson's multi-protein, multi-channel, multi-national business.

"We're going to grow sales of domestic value-added chicken and prepared foods," Leatherby said. "We're not a commodity protein company. That's not our goal, nor our destiny. Value added is currently about a third of our sales, which includes food service as well as branded retail products.”

ANALYST DOWNGRADE

But despite Tyson’s efforts to leverage its strong balance sheet and diversified meat business, some analysts have taken a step back.

Ahead of the market opening, Stephens Inc. analyst Farha Aslam reduced her fiscal 2013 earnings per share estimate given the difficulties in beef and the ongoing losses in that segment. She downgraded Tyson to equal weight, or a hold position from the overweight, or buy position, held for several quarters.

Aslam cut the full year earnings to $2 per share, down from $2.23 and reduced her target share price from $28 to $26.
 
“The Stephens Beef Margin has been weaker than we had anticipated over the past six weeks, averaging a loss of  $55 per head. We note that Tyson outperforms the basic industry average due to the company's scale and specialty programs. That said, the Stephens Beef Margin is a good indicator of profit trends for both the industry and Tyson Foods,” she recently noted to investors.

In terms of pork, Aslam said margins have been soft in late January-early February due to a tight availability of hogs, volatile cash hog markets and constrained domestic pork demand. 

A year end summary report from Fort Smith Finance Director Kara Bushkuhl shows that city officials are concerned about 2013 revenue and have asked department heads to look for ways to reduce or delay spending.

Fort Smith’s general fund at the end of 2012 was $5.975 million, down $722,144 less than estimated once prepaid expenditures are accounted for. Overall, city revenue during 2012 was $329,000 below estimates.

Each of the city’s 1% sales taxes (1% for streets, 1% for water and sewer work) collected $19.605 million in the 2012 reporting cycle, up slightly from $19.341 million in 2011. The city’s portion of collections from the 1% countywide tax during 2012 totaled $15.279 million, just above the $15.155 million in 2011.

“The city sales taxes for 2012 were 1.36% more than 2011 and were 1.95% above the budgeted revenue for 2012,” Bushkuhl noted in her report that was released late Tuesday afternoon. “The last two months of the year were both below the previous year’s revenue and that had an impact on the amount of taxes available for the fire and parks departments operating sales tax revenue.”

Collection declines may also delay capital projects planned for 2013, Bushkuhl reported. The declines included an almost $500,000 drop in franchise fee revenue, and property tax revenue down $95,000.

EXPENDITURE CONTROL
The city’s fund balance was also impacted by $302,000 more spent by the Fire Department than anticipated, and $170,000 more in Police Department spending than planned. Those expenditure increases were partially offset by a $136,000 reduction in Transit Department spending and $61,000 less in Parks Department spending than was budgeted.

“The city needs to be cautious in its spending over the foreseeable future until we have an opportunity to review significant first quarter revenues at the end of April 2013,” Bushkuhl advised in her report. “In the meantime, the departments have been asked to review capital expenditures and delay filling vacant positions for at least two months unless critical to operations. The 2013 major revenue sources in the General Fund will be reviewed and adjusted based upon the actual revenues received during 2012.”

In a Tuesday interview, Bushkuhl said she and City Administrator Ray Gosack “are in the middle of looking at what we will revise” with respect to budgets and capital projects.

“Basically we’re just going to have to tighten our belts and review where our levels of revenue and where our level of spending is,” Bushkuhl said.

POSITIVE ASPECTS
The report wasn’t all bleak. Revenue reports were positive for the Fort Smith Sanitation Department and the city’s water and sewer operating fund.

The sanitation operating fund balance was $2.048 million at the end of 2012, well ahead of an anticipated balance of $1.705 million. According to Bushkuhl’s report, landfill operations revenue was up about $183,000 more than anticipated, roll-off collections were above estimates by $92,000, and residential collections were $67,000 more than expected. The sale of equipment resulted in about $150,000 more revenue than planned.

Baridi Nkokheli, director of the Fort Smith Department of Sanitation, credited the positive numbers on previous and ongoing efforts to modernize landfill and residential and commercial collections. The department is unique to the city in that it is an enterprise fund – essentially operating like a standalone business.

“We have to compete against the private sector ... and that’s why we tend to be more aggressive and proactive in our operations,” Nkokheli said Tuesday.

Nkokheli anticipates continued gains from efficiencies. For example, with the fully automated residential trash service, the department is able to sell two collection trucks for every new automated collection truck required.

“The focus here is to be service-oriented, and that’s why we have about 75% of the commercial (trash collection) share in the city,” Nkokheli explained. “The efficiencies that we put in place and will continue to put in place help us do more and do it better.”

WATER WORKS
The working capital balance for the water and sewer operating fund at the end of December was $11.101 million – $2.25 million more than anticipated.

“The revenues from water sales to residential, commercial and industrial users was $1.7 million more than expected. Sewer service charges generated $262,000 more revenue than estimated,” Bushkuhl explained in the report.

The increased revenue included $581,000 received from the city of Van Buren as part of a negotiated “true up” agreement to settle disputed water charges dating back to 2006.

An improved fund balance was also the function of reduced expenses, with some of that from lower interest rates on refinanced water and sewer bonds, Bushkuhl said.

MANUFACTURING IMPACT
A negative surprise was from the almost $500,000 drop in franchise fee revenue. The decline, down 7.61% from 2011, ended two years of consecutive gains in franchise fee revenue. Following are the previous five years of franchise fee revenue.
2012: $6.071 million
2011: $6.571 million
2010: $6.492 million
2009: $5.99 million
2008: $7.366 million

Part of the reduction is attributed to less production within the Fort Smith regional manufacturing sector.

Franchise payments from Oklahoma City-based OG&E was $3.618 million in 2012, down from $3.832 million during 2011. Whirlpool Corp., once a major customer for OG&E, shuttered its large Fort Smith plant in June 2012.

Franchise fee payments from XTO, a natural gas supplier, fell more than 27% in 2012, dropping from $504,211 in 2011 to $367,343 in 2012. XTO, through Seminole Energy Services, sells primarily to industrial users in Fort Smith.

Fort Smith-based Arkansas Oklahoma Gas Corp. paid the city $914,019 in franchise payments in 2012, down from $1.054 million in 2011. AOG President Mike Callan said reduced production at Fort Smith manufacturing operations and low natural gas prices contributed to the reduction in franchise payments from natural gas utilities.

“We’re just seeing a lot less (gas) going to those (industrial) users,” Callan said Tuesday.

The Fort Smith Airport Commission awarded an engineering contract to Morrison Shipley Engineers on Tuesday night as the commission plans the rehabilitation of Runway 1/19.

According to a memorandum to commissioners, the project should extend the life of the asphalt runway for another 10 years. John Parker, director of the Fort Smith Regional Airport, said the typical life for an asphalt runway is 15 years.

Included in the $229,200 project is "preparing the runway, spraying a seal coat and remarking."

Greg Shipley, president of Morrison Shipley Engineers, said if an alternate surface treatment were used instead of rehabilitation, the cost would range from $1 million to $1.5 million.

"The FAA is big on (rehabilitation) during conservative times," he added.

Parker told commissioners $16,300 will be expended initially on design work, while additional funds would not be expended pending the application and approval of a grant through the Arkansas Aeronautics Commission to pay 80% of the rehabilitation costs. The airport would pay the remaining 20%.

"We would coordinate with the Department of Aeronautics to make sure we don't get too far out (before bidding the project)," he said.

The project is projected to take 30 days to complete, according to Parker. He said from the time of application to completion should be approximately two months.

Shipley said he expected the project to be complete in June.

In other business, the commission accepted bids for a new fuel pump system. American Petro bid $22,866.03 for the system while The Southern Company bid $18,745. The commission accepted The Southern Company's bid.

Builders started 90 new homes in January in the region’s four largest cities – Fayetteville Springdale, Rogers and Bentonville.

The new residential permit values totaled $20.738 million, up 16.5% from the same period in 2012. Contractors agree the building uptick is an indication 2013 is off to a decent start. The building pace was more active in Springdale and Rogers last month than in Bentonville and Fayetteville.

Rogers issued 33 permits valued at $5.984 million in January. Values rose 20% with eight more properties under construction from the same time last year. About one-third of those properties were issued to ARC/ Walker Brothers of Centerton.

Sean Morris, general contractor for ARC, said his firm is building in the Bellview Subdivision and on 38 lots they picked up late last year in The Groves subdivision near Pleasant Grove Road.

Morris said several permits are for pre-sold homes in The Groves. The price point in this subdivision starts at $199,900 for 2,000 square feet. Larger footprints at 2,300 square feet are also available at a higher cost.

The city of Springdale issued 20 new residential home permits last month with a total value of $4.665 million. Building activity in the city is more active with residential permit values up 48% from a year ago.

There were 15 new home permits issued in Fayetteville compared to 12 a year ago. Permits values rose 58% from January 2012 and were pushed higher from more larger homes in the mix.

In Bentonville, builders cooled their heels last month after a very active 2012. City officials issued 22 permits valued at $6.062 million in January and activity declined by 15.2% from the prior year.

On Tuesday, the National Association of Home Builders warned that the budding housing revival still faced a number of obstacles as 2013 gets under way.

“I talk to many of our builder members who are expressing increasing frustration that they can’t get access to construction loans to develop lots in markets where demand is on the upswing,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “Not only is this keeping workers sidelined, it is frustrating potential home buyers and slowing the recovery.”

With the peak spring home building season just weeks away and inventories of new homes at or near record-lows in many markets, builders should be ramping up to meet demand and create new jobs in markets across the nation.

Across Northwest Arkansas builders say their inventories are low by design mostly as no one wants to come close to the oversupply the region faced in 2007.

“With the severe declines in housing over the past years, many building material manufacturers  such as drywall producers and lumber firms had to close plants and cut back production dramatically,” said NAHB Chief Economist David Crowe. “Now, with the NAHB/First American Improving Markets Index showing that many housing markets are on the mend, the supply chain is starting to strain. Producers are reluctant to expand while credit remains tight and the most recent result has been skyrocketing prices.”

Crowe said builders have to absorb these added costs by cutting back on other areas, including hiring.

Local builders say they work with regular sub-contracting crews and have maintained the about the same number of contractors over the passed two years. They don’t see that changing anytime soon.

COMMERCIAL SECTOR
The four cities together issued a handful of permits for new commercial projects in January. The total value of $5.055 million was 25.8% more than those issued a year ago.

On tap in Springdale is a new Casey’s General Store on South Thompson and Don Tyson Parkway.

In Rogers, a new Casey’s General Store is under way on Second Avenue, and Hunt Ventures is constructing a new office/multi-use building at Promenade Point along Green Acres Way in western Rogers.

In Fayetteville, a new 4900-square-foot office building was approved and permit issued to Milestone Construction. The value of the office complex is $1.4 million.  

Bentonville did not issue any new commercial permits last month.

Building Permit Values
Bentonville
2013: $6.062 million
2012: $8.84 million
-31.42%

Fayetteville
2013: $5.428 million
2012: $3.553 million
52.7%

Rogers
2013: $9.305 million
2012: $6.345 million
41.92%

Springdale
2013: $4.998 million
2012: $3.59 million
39.22%

(Permit values are for new residential and commercial construction, alterations and remodels are not included.)

When Maryl Koeth was planning for 2012, she estimated a mere 1% increase in Van Buren hospitality tax collections. She missed the estimate by several points, and she’s happy about that.

During 2012, Van Buren hospitality tax collections totaled $425,554, up 5.2% compared to the 2011 collections. The city collects a 1% tax on lodging and a 1% prepared food tax.

“I budgeted a very conservative 1% increase for 2012 which was $406,740. ... Not bad, not bad at all. My 2013 projection is a little more optimistic at 3%,” said Koeth, executive director of the Van Buren Advertising & Promotion Commission.

The 2012 figures also mark two years of gains in the collections, which reflect gains in the city’s tourism and business traveler business.

Hospitality tax collections in Van Buren during 2011 totaled $429,561, up 2.34% compared to 2010. The 2011 collections ended a two-year skid in Van Buren.

It was a similar story in Fort Smith, with collections up more than 5% for the year.

During 2012, Fort Smith hospitality tax collections totaled $746,182, up 5.37% compared to the 2011 period. The city collects a 3% tax on lodging.

December hospitality collections in Fort Smith totaled $45,367, down 5.2% compared to December 2011. The December collections followed a 1.2% dip in November.

“We are pleased to have far exceeded the previous year’s collections as well as the increase (3%) that we had budgeted for 2012. The revenue budget for 2013 also includes a 3% increase over this year’s collections,” said Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau.

Legris said the 2013 marketing plan will see a change.

“We are currently making adjustments to our marketing efforts for 2013 based on the announcement by True West Magazine in December that Fort Smith had been named their “#1 True Western Town” for the year, to capitalize on that honor to the casual traveler, some of whom have mentioned the title to staff at the Welcome Center at Dora within days of the announcement,” Legris explained.
www.thecitywire.com/node/25519

TOURISM EMPLOYMENT
Employment in the region’s tourism industry was 8,100 during December, down from 8,300 in November and above the 8,000 in December 2011. The sector reached an employment high of 9,800 in December 2008.

Despite the increase in collections, average monthly employment in the Fort Smith metro tourism sector is on a three-year decline. During 2007, 2008 and 2009, the average monthly employment was 9,300. That fell to 8,700 during 2010, 8,500 during 2011 and an estimated 8,400 during 2012. The sector reached an employment high of 9,800 in November 2008.

Arkansas’ 2% tourism tax receipts totaled $12.405 million during 2012, up 3.16% compared to the $12.025 million during 2011. The gains marked the third consecutive year of improving tourism tax revenue. Collection of the statewide tax was $12.025 million during 2011, up 4.6% compared to $11.492 million during 2010.

Arkansas’ tourism sector (leisure & hospitality) employed 102,800 during December, down from the 103,800 during November and ahead of the 99,200 during December 2011. The sector reached a record 104,900 jobs during April.

LeFlore County residents will soon have a new health department headquarters featuring cost-saving water-heating technology that has not been introduced to any building in the county until now.

According to Lance Smith, chairman of the LeFlore County Board of Directors, the new $3.3 million facility will feature a geothermal heat pump to heat and cool the building instead of a boiler room.

He said while the expense was large initially, nearly double the cost of a typical boiler room, the health department should see a good return on investment over time through reduced energy costs.

"Hopefully within eight to 10 years it will pay itself off," Smith said.

Matthew Duke, the project manager for the new building, said new fusion-welded pipes will also reduce corrosion, saving even more money over time.

The new 20,000-square foot facility, located on Dewey Street adjacent to Eastern Oklahoma Medical Center in Poteau, will also feature space to see additional patients and meeting space to accommodate community groups, according to Smith.

He said a new facility was desperately needed to replace the county's current location just a few blocks away.

"We're actually in an old nursing home," Smith said. "The old building is dilapidated. It's in terrible condition."

By moving to a facility custom-designed for the health department, patients will notice a more efficient operation that will provide more privacy, something currently lacking.

"The way these (check-in stations) are designed at an angle, it's on purpose to give customers more privacy," Smith said.

Leslie Covey, public information officer for the LeFlore County Health Department, said a wide variety of services are offered to the public, so a new facility that offers not only new infrastructure but increased privacy is important.

"Our case load is big and we hope to have it grow," she said, adding that more than 8,500 patients were served during the 2012 fiscal year.

According to Covey, some of the many programs offered by the health department include the Women, Infant and Children Nutrition (WIC) program, family planning for both men and women, STD screening and immunization programs for individuals of all ages.

She said it was important to complete the new building not only to see an increased number of patients and to provide privacy for patients, but also to provide a safe and sterile environment for staff and patients to function.

"We've had squirrels (in the current building). And snakes have been a big issue, too," she said. "Having the new facility will definitely improve employee morale."

In order to fund the construction, Smith said the health department staff had set aside funds each year for the last several years. When construction started last summer, funds saved during the last several years totaled more than $1 million, he said.

Eastern Oklahoma Medical Center donated the land used for construction, providing the county with significant savings, Turner added.

He said the remainder of funding came from issuing bonds through the Oklahoma Capitol Improvement Authority.

"They were issued for 20 years but it was set up through the state bonding authority for better interest rates," Smith said.

Even though bonds were issued for the project, Smith said the county is not on the hook for paying back the cost of construction.

"The state health department will pay the bonds back," he said. "We just sold the bonds, but there was no local cost at all to the residents. The state will pay it all back."

Smith said construction is expected to be completed sometime in May with move-in and opening occurring sometime that same month.

"I think it will be a nice facility to benefit the people of this area for many years to come."

Roughly two years since Kum & Go lost its bid to build a convenience store near the intersection of Bella Vista Way and Riordan Road, Casey’s General Stores found a way.

The Ankey, Iowa-based convenience store chain already has one location in Bella Vista and is anxious to get Store No. 2 up and operational. Casey's General Stores owns and operates 1,700 convenience stores in 14 Midwestern states.

“We are very pleased with the growth we have seen in Northwest Arkansas over the past year or so. The young stores are firing at higher levels than others in our network. The communities across Northwest Arkansas seem to have embraced our brand,” said Bill Walljasper, chief financial officer for Casey’s corporate.

He said the company usually goes into towns with populations between 5,000 and 10,000, but they broke from that somewhat to put more than a dozen stores in heavier populated areas of Northwest Arkansas.

He said that $35 million gamble is paying off as the company is taking marketshare away from some traditional quickserve food competitors and other convenient stores.

Bella Vista Alderman Jerry Snow says he’s pleased to see the deal done as the stores are clean and offer a wide range of fresh food and more choices for local residents.

Casey’s has built eight stores in the two-county area over the past two years with six more on tap in the coming months. Five of those are already under construction in Siloam Springs, Tontitown, Centerton, Springdale and Rogers No. 2.  

City officials expect construction to get underway for Bella Vista No. 2 in the next couple of months.

RECYCLING VEGETATION
Casey Crittenden and his crew from the Bella Vista Property Owners Association have had their hands full digging up and removing roughly 40 mature shrubs and other vegetation from the building site.

“We hated to see these nice shrubs tossed so the POA has reclaimed them. We will transport these shrubs to a nursery setting and then replant later this year in other areas across Bella Vista that need beautification,” Crittenden said. 

The lot contains three buildings which were model homes for Cooper Communities. These homes were completely landscaped with gated courtyards and lots of shrubbery and perennial vegetation.

Since the offices were closed more than four years ago and watering systems turned off many of the larger azaleas have died, but roughly 40 other hardier plants have managed to survive.

Crittenden said they were told by the property owner, Casey's, to get what they wanted now because the homes will be removed or torn down in the next few weeks.

City planning director Christopher Suneson said Casey's has applied for a building permit which is under review at this time.

CASEY’S BRAND
Casey’s spends roughly $2.4 million to $2.7 million for each location, depending on land costs. The stores are around 4,200 square feet.

“We work with select contractors in local areas for these jobs and have been quite busy with new projects over the past year or so,” Walljasper said.

All of the locations in Northwest Arkansas feature Casey’s made from scratch pizza – a top 10 brand nationally in terms of marketshare.

“Our stores also offer made-to-order sub sandwiches and fresh baked donuts with sets us apart for some of our competitors.  We began moving toward to the fresh quickserve model back in the 1980s,” Walljasper said. “Testing the prepared food business years before our competitors.”

Through the first half of fiscal 2013 total revenue for Casey’s was $3.779 million, up 3.36% from the same period a year ago. Casey’s expect to grow same-store sales in its prepared foods and fountain segments by 11% this year, through the first half same-store-sales rose 10.1% with a profit margin of 62.5%.

Grocery and other merchandise same-store sales rose 0.7% in the first half of 2013, falling way shy of the company’s 6.2% annual growth expectation.

Casey’s will report its third quarter earnings on March 12.

Deltic Timber Corp. reported fourth quarter net income of $2.4 million compared to a year ago when the El Dorado-based firm posted a $200,000 loss.

Improvement in its mill operations pushed the turnaround.

For the full year, Deltic Timber net income was $9.2 million compared to $2.7 million for the twelve months ended December 31, 2011.

“Our portfolio of diverse assets performed well in 2012, and we reported profitable financial results for a tenth consecutive year,” said Deltic Timber CEO Ray Dillon. “Driving the financial results for the current quarter and the year of 2012 was the company’s ownership and efficient operation of its sawmills. These sawmills also provide a secure market for Deltic’s sustainably managed, valuable timberland assets.”

Two weeks ago, Deltic Timber announced it would acquire the remaining 50% stake of Del-Tin Fiber currently owned by TIN, Inc., a wholly owned subsidiary of International Paper Company.