Exhibit 99.1
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Contact: | | Mike Cockrell |
| | | Treasurer & Chief Financial Officer |
| | | (601) 649-4030 |
SANDERSON FARMS, INC. REPORTS
RESULTS FOR SECOND QUARTER OF FISCAL 2010
LAUREL, Miss. (May 25, 2010) — Sanderson Farms, Inc. (NASDAQ: SAFM) today reported results for its second fiscal quarter and six months ended April 30, 2010.
Net sales for the second quarter of fiscal 2010 were $487.1 million compared with $426.8 million for the same period a year ago. For the quarter, net income was $35.1 million, or $1.62 per fully diluted share, compared with net income of $26.2 million, or $1.25 per fully diluted share, for the second quarter of fiscal 2009.
Net sales for the first six months of fiscal 2010 were $907.2 million compared with $815.6 million for the first half of fiscal 2009. Net income for the first half of the year totaled $50.9 million, or $2.39 per fully diluted share, compared with net income of $19.5 million, or $0.93 per fully diluted share, for the first six months of last year.
“We are pleased with the performance of Sanderson Farms during the second fiscal quarter of 2010,” said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. “Our results reflect the efficient management of our operations by our managers, employees and contract producers. Demand for chicken at retail grocery stores remains strong and the ongoing issues we and our industry face in export markets have not yet significantly disrupted the markets. As has been the case for two years, demand from some food service customers continues to be adversely affected by the economic downturn as demand for protein consumed away from home remains soft. Market prices for boneless breast meat strengthened seasonally and due to limited supply during the quarter. While our net sales price and feed costs did not change significantly during the quarter compared to last year’s second fiscal quarter, we sold 16% more pounds of fresh chicken during the quarter, and the additional volume allowed us to significantly reduce our average non-feed related costs per pound.”
According to Sanderson, market prices for poultry products were mixed during the second quarter of fiscal 2010 compared with the same quarter a year ago. As measured by a simple average of the Georgia dock price for whole chickens, prices decreased approximately 2.0 percent in the Company’s second fiscal quarter compared with the same period in 2009. Despite the ongoing Russian embargo of United States chicken, bulk leg quarter market prices were flat with last year’s second quarter. Boneless breast meat prices during the quarter were approximately 8.6 percent higher than the prior year period. Jumbo wing prices, while relatively strong, retreated from their all time high in January and were 5.8 percent lower for the quarter compared to last year.
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Sanderson Farms Reports Results for Second Quarter Fiscal 2010
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May 25, 2010
“We are cautiously optimistic as we head into the summer months and what is typically a period of better demand for chicken. Broiler egg sets continue to indicate manageable supplies over the short term, while breeder placements point to reasonable supplies for the next few months. Progress continues on our new Kinston, North Carolina, complex, and we placed our first breeder flock in April. The plant is on schedule to begin processing chickens in January of next year. As announced in March, we also look forward to the next phase of our growth, which is our plans for the construction of a new big bird deboning facility in Goldsboro, North Carolina, subject to previously announced contingencies. Together, the two North Carolina plants will add 30 percent more capacity and support our growth through 2014,” added Sanderson.
Sanderson Farms will hold a conference call to discuss this press release today, May 25, 2010, at 10:00 a.m. Central, 11:00 a.m. Eastern. Investors will have the opportunity to listen to a live Internet broadcast of the conference call through the Company’s Web site at www.sandersonfarms.com or through www.earnings.com. To listen to the live call, please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, an Internet replay will be available shortly after the call and continue through June 25, 2010. Those without Internet access may listen and participate in the call by dialing 888-219-1467, confirmation code 4398177.
Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared chicken items. Its shares trade on the NASDAQ Global Select Market under the symbol SAFM.
This press release contains forward-looking statements based on management’s current views and assumptions. Actual results and events may differ. For a discussion of these matters, please refer to the “Cautionary Statement Regarding Risks and Uncertainties That May Affect Future Performance” in Item 7 of the Company’s 2009 Annual Report onForm 10-K and please refer to the cautionary statement found in Management’s Discussion and Analysis of Financial Condition and Results of Operations under the heading “General” in Part I, Item 2 of the Quarterly Report on Form 10-Q for the Company’s second quarter ended April 30, 2010.
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Sanderson Farms Reports Results for Second Quarter Fiscal 2010
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May 25, 2010
SANDERSON FARMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | April 30, | | | April 30, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| Net sales | | $ | 487,101 | | | $ | 426,759 | | | $ | 907,224 | | | $ | 815,643 | |
| Costs and expenses: | | | | | | | | | | | | | | | | |
| Cost of sales | | | 412,109 | | | | 370,774 | | | | 790,153 | | | | 754,686 | |
| Selling, general and administrative | | | 19,277 | | | | 12,884 | | | | 35,637 | | | | 24,798 | |
| | | | | | | | | | | | | |
| | | | 431,386 | | | | 383,658 | | | | 825,790 | | | | 779,484 | |
| | | | | | | | | | | | | |
| Operating income | | | 55,715 | | | | 43,101 | | | | 81,434 | | | | 36,159 | |
| | | | | | | | | | | | | | | | | |
| Other income (expense): | | | | | | | | | | | | | | | | |
| Interest income | | | 11 | | | | 4 | | | | 16 | | | | 11 | |
| Interest expense | | | (1,161 | ) | | | (2,489 | ) | | | (2,293 | ) | | | (5,700 | ) |
| Other | | | 2 | | | | 0 | | | | 7 | | | | (3 | ) |
| | | | | | | | | | | | | |
| | | | (1,148 | ) | | | (2,485 | ) | | | (2,270 | ) | | | (5,692 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 54,567 | | | | 40,616 | | | | 79,164 | | | | 30,467 | |
| Income tax expense | | | 19,480 | | | | 14,400 | | | | 28,260 | | | | 11,000 | |
| | | | | | | | | | | | | |
| Net income | | $ | 35,087 | | | $ | 26,216 | | | $ | 50,904 | | | $ | 19,467 | |
| | | | | | | | | | | | | |
| Basic earnings per share | | $ | 1.62 | | | $ | 1.25 | | | $ | 2.39 | | | $ | 0.93 | |
| | | | | | | | | | | | | |
| Diluted earnings per share | | $ | 1.62 | | | $ | 1.25 | | | $ | 2.39 | | | $ | 0.93 | |
| | | | | | | | | | | | | |
| Dividends per share | | $ | 0.15 | | | $ | 0.14 | | | $ | 0.30 | | | $ | 0.28 | |
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Sanderson Farms Reports Results for Second Quarter Fiscal 2010
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May 25, 2010
SANDERSON FARMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
| | | | | | | | | |
| | | April 30, | | | October 31, | |
| | | 2010 | | | 2009 | |
| | | (Unaudited) | | | | | |
| ASSETS | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 97,202 | | | $ | 8,194 | |
| Accounts receivable, net | | | 75,766 | | | | 68,461 | |
| Inventories | | | 144,889 | | | | 140,521 | |
| Refundable income taxes | | | 0 | | | | 1,567 | |
| Deferred tax asset | | | 2,930 | | | | 2,866 | |
| Prepaid expenses and other current assets | | | 19,364 | | | | 18,428 | |
| | | | | | | |
| Total current assets | | | 340,151 | | | | 240,037 | |
| | | | | | | | | |
| Property, plant and equipment | | | 794,449 | | | | 740,587 | |
| Less accumulated depreciation | | | (367,634 | ) | | | (347,459 | ) |
| | | | | | | |
| | | | 426,815 | | | | 393,128 | |
| Other assets | | | 2,727 | | | | 3,011 | |
| | | | | | | |
| Total assets | | $ | 769,693 | | | $ | 636,176 | |
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| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 87,651 | | | $ | 76,352 | |
| Current maturities of long-term debt | | | 991 | | | | 1,022 | |
| | | | | | | |
| Total current liabilities | | | 88,642 | | | | 77,374 | |
| | | | | | | | | |
| Long-term debt, less current maturities | | | 62,807 | | | | 103,123 | |
| Claims payable | | | 2,000 | | | | 2,600 | |
| Deferred income taxes | | | 22,365 | | | | 22,371 | |
| Stockholders’ equity: | | | | | | | | |
| Common stock | | | 22,721 | | | | 20,334 | |
| Paid-in capital | | | 151,491 | | | | 35,143 | |
| Retained earnings | | | 419,667 | | | | 375,231 | |
| | | | | | | |
| Total stockholders’ equity | | | 593,879 | | | | 430,708 | |
| | | | | | | |
| Total liabilities and stockholder’s equity | | $ | 769,693 | | | $ | 636,176 | |
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